Morgan Stanley Pays $8M, Admits Wrongdoing Over ETFs

Law360, New York (February 14, 2017, 2:44 PM EST) -- Morgan Stanley’s brokerage arm agreed to pay an $8 million penalty and admit wrongdoing to settle allegations that it failed to ensure clients understood the risks associated with purchasing single inverse exchange-traded funds, the U.S. Securities and Exchange Commission said Tuesday.

Morgan Stanley Smith Barney LLC admitted that it failed to adequately ensure clients understood the risks of investing in single inverse ETFs, funds designed to profit from the decline in a benchmark that reset daily. The SEC said the firm failed to obtain signed disclosure...
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