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Morgan Stanley shares slid as a lot as 6.5% after a report {that a} cadre of US regulators are scrutinizing the agency’s efforts to forestall potential cash laundering by rich shoppers.
The Securities and Trade Fee, the Workplace of the Comptroller of the Foreign money and different Treasury Division places of work are digging into whether or not the New York-based financial institution has executed sufficient to analyze the identities of dangerous shoppers, the Wall Road Journal wrote, citing unidentified individuals conversant in the matter. The Federal Reserve was already recognized to be trying into these controls final yr.
The SEC and the Treasury’s Monetary Crimes Enforcement Community have sought info on sure shoppers exterior the US who’ve raised crimson flags and the financial institution’s insurance policies to handle it. Particularly, the SEC pressed Morgan Stanley’s unit serving prosperous individuals about why it did enterprise with some who had been minimize off by E*Commerce, the digital-trading platform the corporate acquired.
The inventory was down 5.5% to $86.61 at 2:45 p.m. in New York. A Morgan Stanley spokesperson declined to remark.
The financial institution has informed regulators it’s enhancing controls and procedures and met with Federal Reserve officers to allay issues final yr. The wealth enterprise has grown into the agency’s largest unit, and has expanded in recent times after acquisitions.
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