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Morgan Stanley agreed to pay $1.5 million to the Securities and Exchange Commission to settle charges that it misrepresented its share class selection process made to certain retail retirement and charitable organization brokerage customers.

According to the SEC’s order, from at least July 2009 through December 2016, Morgan Stanley represented that, in the process of selecting the most economical share class, it used “share class limits and other tools,” including a share class selection calculator, designed to provide customers with the least costly mutual fund share class.

Morgan Stanley “failed to adequately test and validate its share class calculator, which experienced operating errors that caused it not to provide the most beneficial share class to customers in certain circumstances, and other share class selection tools employed by [Morgan Stanley Smith Barney] did not consistently provide the most beneficial share class to customers,” the SEC states.

As a result, the broker-dealer recommended and sold these customers more expensive share classes when less expensive share classes were available, contrary to MSSB’s representations to those customers.

(MSSB was renamed Morgan Stanley Wealth Management in 2012.)

Approximately 18,520 customer accounts paid more than $12.2 million in up-front sales charges, contingent deferred sales charges, and higher ongoing fees and expenses as a result of these failures, the SEC states.

According to the SEC, Morgan Stanley has remediated approximately 99% of the overcharges to those customers and is disgorging undistributed remediation for 226 former customers it was unable to locate or contact.

The brokerage firm has also offered conversion to all eligible customers to the mutual fund share class with the lowest expenses for which they are eligible, at no cost to the customers.

Without admitting or denying the SEC’s findings, Morgan Stanley consented to the $1.5 million civil penalty, as well as a cease-and-desist order, a censure, disgorgement of $42,398 and prejudgment interest of $3,370.

“We are pleased to have resolved this matter and have corrected the systems issues that were the cause,” Morgan Stanley said in a Friday statement.