Morgan Stanley’s vetting of wealth-management clients under investigation – report

The Financial Industry Regulatory Authority, known as Finra, is investigating Morgan Stanley (NYSE:MS) to see if the bank is properly assessing its clients for money laundering risks, according to a media report.

The probe focuses on the company’s customers, risk ranking, and other practices from October 2021 through September 2024, the Wall Street Journal reported, citing people familiar with the matter.

Finra, a self-regulatory organization for broker-dealers, is seeking information on international and U.S. clients in Morgan Stanley’s wealth management business and the unit that includes its trading desks, the people said.

The investigation is focused on risk profiles of clients for whom Morgan Stanley (NYSE:MS) handled or traded securities, and spanning its E*trade platform, private bank, and institutional group, the WSJ report said.

In April 2024, the WSJ reported that multiple federal regulators were investigating how the banks vets wealth management clients who are at risk for money laundering.

Morgan Stanley (MS) stock rose 0.3% in midday trading on Wednesday, amid rising U.S. equity markets.