Morgan Stanley's client-screening faces deeper FINRA probe, WSJ reports
The probe examines client vetting, risk rankings and related practices across the Wall Street bank's wealth-management and trading operations from October 2021 through September 2024, the report said.
FINRA, a non-governmental self-regulatory organisation that oversees U.S. broker-dealers under federal law, is seeking information on U.S. and international clients across Morgan Stanley's wealth unit, including E*Trade, and its institutional securities division, according to the Journal.
The regulator has also requested organisational charts, reporting lines and details on the firm's client risk-scoring tool, the report added.
Some employees raised concerns that the initial data sent to FINRA was incomplete or inaccurate, prompting the bank to provide additional information after the regulator flagged gaps, the Journal said.
A Morgan Stanley spokesperson told the Wall Street Journal the bank has made significant investments in its anti-money-laundering and client-vetting programmes, adding that such regulatory reviews are not unique to the bank and do not indicate problems with its business or controls.
Reuters could not independently verify the report. FINRA declined to comment, while Morgan Stanley did not immediately respond to a request for comment.
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