Morgan Stanley Stock in Focus as Wealth Unit Probed by Regulators—Key Levels to Watch

Core Insights - Morgan Stanley shares dropped over 5% following reports of regulatory probes into its wealth management arm regarding client vetting processes related to money laundering risks [1][2][4] - The investigations involve multiple regulators, including the SEC and OCC, focusing on the bank's identity verification and tracking of high-risk clients, particularly international ones [2][3] - Morgan Stanley's wealth management division is crucial to its revenue, generating about half of the bank's total revenue and overseeing approximately $5 trillion in assets [3] Regulatory Scrutiny - The U.S. Securities and Exchange Commission (SEC) and the Office of the Comptroller of the Currency (OCC) are investigating the adequacy of Morgan Stanley's client screening processes [2] - Regulators are particularly interested in how the bank verifies the identity of high net worth individuals and the sources of their wealth [2] Financial Performance - Morgan Stanley's wealth management arm has been a key part of its strategy since the global financial crisis, with significant acquisitions like Smith Barney and E*Trade [3] - The bank is set to report its first quarter earnings soon, which may provide further insights into its financial health amid the ongoing scrutiny [3] Stock Performance - Following a recent sell-off, Morgan Stanley shares fell 5.3% to $86.84, with an additional drop in after-hours trading [4] - Investors are advised to monitor the stock's ability to maintain support between $83 and $85, as it has previously shown a V-shaped recovery from below $70 [4]