News Post

Morgan Stanley’s wealth arm probed by multiple federal regulators

Livemint · 6m

Multiple federal regulators, including the Securities and Exchange Commission (SEC) and the Office of the Comptroller of the Currency, are investigating Morgan Stanley over its client vetting processes in relation to money laundering risks. The investigation focuses on whether the bank adequately investigates the identities and wealth sources of prospective clients, as well as how it monitors their financial activities. Regulators have raised concerns about Morgan Stanley's international clients. The bank has been addressing these issues and has invested in compliance, technology, and artificial intelligence to enhance its understanding of money flows. The SEC previously sent Morgan Stanley a list of clients for clarification on their vetting process. The Treasury's Financial Crimes Enforcement Network and the Office of Foreign Assets Control have also been involved in the investigation. Morgan Stanley's wealth unit, which accounts for about half of the company's revenue, has seen flat revenues and a decline in net new assets.