Securities Exchange Act of 1934
Release No. 34-60160 / June 23, 2009

Administrative Proceeding File No. 3-12631

In the Matter of

Morgan Stanley & Co. Incorporated

Respondent.


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NOTICE OF PROPOSED PLAN OF DISGORGEMENT AND OPPORTUNITY FOR COMMENT

Notice is hereby given, pursuant to Rule 1103 of the Securities and Exchange Commission's ("Commission") Rules on Fair Fund and Disgorgement Plans, 17 C.F.R. § 201.1103, that the Division of Enforcement has filed with the Commission a proposed plan ("Distribution Plan") for the distribution of monies in the Matter of Morgan Stanley & Co. Incorporated. The Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 in this matter on May 9, 2007 (Rel. No. 34-55726).

OPPORTUNITY TO COMMENT

Pursuant to this Notice, all interested parties are advised that they may obtain a copy of the Distribution Plan from the Commission's public website, http://www.sec.gov, or by submitting a written request to Elaine C. Greenberg, Associate Regional Director, United States Securities and Exchange Commission, 701 Market Street, Suite 2000, Philadelphia, PA 19106. Further, all persons desiring to comment on the Distribution Plan may submit their comments, in writing, no later than July 23, 2009:

  1. to the Office of the Secretary, United States Securities and Exchange Commission, 100 F Street, NW, Washington, DC 20549-1090;

  2. by using the Commission's Internet comment form (http://sec.gov/litigation/admin.shtml); or

  3. by sending an e-mail to rule-comments@sec.gov.

Comments submitted by e-mail or via the Commission's website should include "Administrative Proceeding File Number 3-12631" in the subject line. Comments received will be available to the public. Persons should only submit information that they wish to make publicly available.

THE DISTRIBUTION PLAN

The Distribution Plan provides for distribution of the disgorgement and prejudgment interest of $6,457,200 paid by Morgan Stanley & Co. Incorporated ("MS & Co."), plus any accumulated interest, less any federal, state or local taxes on the interest. The Distribution Plan provides that the calculation of amounts to be distributed to investors will be based on records of MS & Co., its affiliated broker-dealer and certain other third-party entities. Accordingly, the funds are not being distributed according to a claims-made process. The Distribution Plan provides for the distribution of the monies to Eligible Investors who were harmed by MS & Co.'s best execution violations. Eligible Investors include those investors whose order(s): (1) were handled by MS & Co's automated order-handling programs from October 24, 2001, through December 8, 2003; (2) were executed on a riskless principal basis; (3) were subject to certain automated programming features of the order-handling programs; and (4) received execution prices that were inferior to the execution prices MS & Co. received on the transactions. Each Eligible Investor shall receive the difference between the execution price MS & Co. received and the execution price MS & Co. reported to the Eligible Investor. Pursuant to the Distribution Plan, MS & Co. is responsible for all costs and expenses of the distribution.

For the Commission, by its Secretary, pursuant to delegated authority.

Elizabeth M. Murphy
Secretary

See also Proposed Distribution Plan