Morgan Stanley Faces Probe Over Anti-Money Laundering Practices

Core Viewpoint - Morgan Stanley is under investigation by the Financial Industry Regulatory Authority (FINRA) regarding its money laundering prevention measures and client vetting practices [2][3]. Investigation Details - The investigation focuses on Morgan Stanley's client risk ranking and practices from October 2021 to September 2024 [3]. - FINRA is seeking information on both U.S. and international clients within Morgan Stanley's wealth management and trading desks, including details on senior foreign political figures and their associates [4]. Regulatory Context - FINRA, while not a government agency, has the authority to impose fines on broker-dealers that violate its regulations [5]. - Morgan Stanley is also facing scrutiny from multiple federal agencies, including the SEC, OCC, and FinCEN, regarding its client vetting processes [6]. Related Regulatory Developments - The investigation coincides with the Treasury Department's announcement of a two-year delay on a new anti-money laundering rule for investment advisers, now set to take effect in 2028 [7][8]. - The delay aims to balance regulatory costs and benefits while addressing risks posed by illicit finance [8].