The Financial Industry Regulatory Authority on Tuesday said it ordered Morgan Stanley to pay $800,000 for failing to disclose conflicts of interests in thousands of stock-research reports since 2006.
The group said that Morgan Stanley & Co., a subsidiary of the investment bank, failed to disclose accurate information about the firm's relationships with those companies it covered in more than 6,500 equity research reports. In addition, relevant disclosures weren't made for 84 public appearances of its research analysts.
The deficient disclosures include failing to reveal the personal securities holdings of an analyst or a member of the analyst's household. Finra is continuing its investigation into the trading behavior of one former analyst involved in the case, according to people familiar with the matter. The names of the analysts weren't disclosed.
Morgan Stanley's infractions took place in an area that regulators targeted a decade ago when it became clear that research recommendations were often driven by Wall Street's desire to keep banking clients happy.
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