Morgan Stanley says SEC seeking details on advisory account cash balances
Adds background on advisory accounts and OW Bunker in paragraphs 3-6, 9-10
Aug 5 (Reuters) -Morgan Stanley MS.N said on Monday it had received requests from the enforcement division of the U.S. securities regulator regarding advisory account cash balances swept to affiliate bank deposit programs.
The company said it was in talks with the U.S. Securities and Exchange Commission since April over the matter and compliance with the Investment Advisers Act of 1940.
The law, which regulates investment advisers, requires firms compensated for advising others about securities investments to conform to regulations designed to protect investors.
Advisory accounts offer investment advisory services to clients for a fee, wherein they can choose from a variety of investment strategies managed by the adviser.
Such accounts may include stocks, bonds, mutual funds, money market funds, exchange-traded funds and cash.
A cash sweep in investment advisory accounts allow clients to earn a return on uninvested cash balances.
Morgan Stanley also disclosed that it had reached a conditional settlement agreement last month to resolve a 2017 lawsuit related to the initial public offering of Danish marine fuel oil supplier OW Bunker.
The company was among the defendants named in the lawsuit, which alleged the underwriters had misled institutional investors about the 2014 listing of OW Bunker.
OW Bunker had filed for bankruptcy within a few months of going public, after it suffered hedging losses of almost $300 million.
The agreement is subject to approval of the settlement by a Danish court, Morgan Stanley disclosed.
Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shilpi Majumdar
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
