Boston, MA, 03/28/2014 (usastockreports)- Morgan Stanley (NYSE:MS) has been charged a fine of $490,000 because it has broken regulations that required it to segregate certain funds. The US regulatory body, Commodity Futures Trading Commission has charged the company with allegation that the company has not protected its customers’ interests and has wrongly transferred money in violation of CFTC rules.
Morgan Stanley pays up
Morgan Stanley (NYSE:MS) has been charged with failing to follow norms regarding the overseeing of certain type of funds. The banks’ brokerage firm Smith Barneys has allegedly transferred $16 million to a wrong type of account. CFTC has criticized the failure in internal controls for the company which has led to this lapse.
MS had earlier in 2012 been charged with a similar type of violation when it had mixed corporate and customer funds. It had also labeled four of the company’s accounts as that of private customers.
Morgan Stanley put quick fixes in place
The company has been charged with not following regulatory norms in a consistent manner. Since this is not the first time that Morgan Stanley (NYSE:MS) is being exposed of this type of operational inefficiency, the company could well stand to lose on its brand value .Even as the company reiterated that no customer has lost any money, investors have been skeptical about the future of this stock . The company has gone overboard in announcing that it will set up an independent auditor to review its processes and make changes where necessary.
One wonders if the steps are not a bit too late, especially as the company does not seem to learn from its past mistakes. Segregating funds is a big matter of concern for the regulatory board, CFTC and there are examples of large firms going down as a result of being pulled up by it for violations.
Morgan Stanley (NYSE:MS)’s stocks are trading at $30.90 currently.