In the Matter of Morgan Stanley Smith Barney LLC
Admin. Proc. File No. 3-19793
On May 12, 2020, the Commission instituted and simultaneously settled administrative and cease-and-desist proceedings (the “Order”) against Morgan Stanley Smith Barney LLC (“Morgan Stanley”). In the Order, the Commission found that from at least October 2012 until June 2017, Morgan Stanley violated the federal securities laws by negligently providing incomplete and inaccurate information regarding the trade execution services provided by Morgan Stanley and the transactions-based execution costs incurred by clients in wrap fee program accounts, which was misleading to certain retail clients. The Commission ordered, and Morgan Stanley has paid, a $5 million civil money penalty to the Commission. The Commission also created a Fair Fund (the “Fair Fund”), pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalty can be distributed to investors harmed by the conduct described in the Order. See the Commission’s Order: Release No. 34-88856.
On May 28, 2020, the Commission issued an order appointing Miller Kaplan Arase LLP as the Tax Administrator of the Fair Fund. See the Commission’s Order: Release No. 34-88969.
On June 3, 2021, the Commission issued an order appointing Analytics, LLC, as the Fund Administrator to oversee the administration and distribution of the Fair Fund and, set the administrator’s bond amount. See the Commission’s Order: Release No. 34-92096.
For more information, please contact the Commission:
Office of Distributions