Morgan Stanley Settles SEC Charges For $7.9M

Law360, New York (May 9, 2007, 12:00 AM EDT) -- Morgan Stanley will hand over $7.9 million to settle claims by the U.S. Securities and Exchange Commission that its automated trading system was programmed to defraud customers.

In an order released Wednesday, the SEC said the broker dealer’s software charged secret “mark-ups” and kept profits meant for retail customers trading in so-called over-the-counter securities.

The Commission said Morgan Stanley failed to provide “best execution” on retail orders to buy and sell stock, thereby violating the Securities Exchange Act. The firm, without admitting or denying the claims,...
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