Excerpts: “FINRA Fines Morgan Stanley $10 Million for AML Program and Supervisory Failures.”

  • FINRA also found that Morgan Stanley failed to establish and maintain a supervisory system reasonably designed to comply with Section 5 of the Securities Act of 1933, which generally prohibits the offer or sale of unregistered securities.
  • Instead, the firm primarily relied on its customers’ representations that the penny stock they sought to deposit was not restricted from sale, and the representations of issuers’ counsel that the customers’ sales complied with an exemption from the registration requirements.

Source: FINRA