D&G Law

SEC Charges Morgan Stanley with Securities Law Violations for Improper Fees

Consumers of financial products and financial services get gouged by excessive and sometimes improper fees every day, many times without the consumer’s knowledge or consent. Last week, the Securities and Exchange Commission (SEC) charged Morgan Stanley’s investment management division with securities law violations involving fees improperly charged to some investment fund clients. According to the SEC’s cease-and-desist order, Morgan Stanley allegedly instituted a fee arrangement in which customers of its Malaysia Fund were charged repeatedly for third party advisory services that they were not receiving, and Morgan Stanley failed to properly report those fees to the Fund’s board of directors and shareholders.

In another victory for the SEC’s Asset Management Unit, which scrutinizes investment advisor contracts and advisory fees, Morgan Stanley has agreed to pay more than $3.3 million to both settle the charges alleged by the SEC and provide restitution to investors.

To learn more about this ongoing investigation, see the SEC’s website at:

http://www.sec.gov/news/press/2011/2011-244.htm

http://www.sec.gov/litigation/admin/2011/ia-3315.pdf