Morgan Stanley Fined $300,000 in Civil Monetary Penalty

The U.S. Commodity Futures Trading Commission (CFTC) issued an Order required Morgan Stanley to pay a $300,000 civil monetary penalty for failing to hold insufficient U.S. Dollars in accounts to meet all obligations to its cleared swaps customers. Morgan Stanley also failed to implement adequate procedures. The CFTC also required the firm to cease and desist from violating any other CFTC Regulations. This comes on the heels of the CFTC implementing rules to protect swaps customers and market participants including rules for protection of cleared swaps after the passage of the Dodd-Frank Wall Street Reform rule and Consumer Protection Act.

Morgan Stanley is accused of failing to hold sufficient U.S. Dollars in segregated U.S. accounts to meet obligations to the firm’s cleared swap customers for the time period of March 12, 2013 until March 7, 2014. During this time period, Morgan Stanley held dollar deficits in Euros and other currencies, rather than in U.S. dollars. The deficit ranged from $5 million to $265 million, sometimes representing more than 10% of the amount that the firm was obligated to maintain for its customers. It also did not have proper procedures in place to supervise its personnel, and did not train its personnel accordingly to comply with CFTC rules and regulations.

If you would like to sue Morgan Stanley, you may be able to do so by calling our securities law firm at 312-332-4200 and speaking to one of our attorneys. We sue firms such as Morgan Stanley in order to recover investment losses for customers. The call is free with no obligation. You may have a case against Morgan Stanley for investment losses.