Ordering them to pay $188,000 in restitution and interest, the US securities watchdog accused the firms for not delivering a fair and reasonable price in certain customer transactions involving municipal bonds.
In 116 customer transactions, involving corporate and agency bonds, Morgan Stanley did not use rational diligence to ensure that the purchase or sale price to the customer was as favorable as possible under current market conditions.
Further, FINRA found that the firm failed to buy or sell bonds at prices reasonably related to the fair market value of the subject security in 165 transactions involving municipal bonds.
FINRA market regulation executive vice president Thomas Gira said, "Firms must ensure that customers who buy and sell securities – including corporate, agency, and municipal bonds – receive execution prices that are consistent with prices available in the marketplace.
"FINRA will continue to sanction firms that execute fixed income transactions for their customers at unfair prices, and will require firms that violate such standards to reimburse customers."
Without accepting or rejecting the regulators’ charges, Morgan Stanley agreed to enter into FINRA’s findings.
