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July 09, 2020 at 03:24 PM
Morgan Stanley’s New York headquarters (Photo: Bloomberg)
Morgan Stanley has agreed to pay an $875,000 fine for providing inaccurate securities trading information, known as “blue sheet data,” as part of a settlement with the Financial Industry Regulatory Authority, according to the regulator.
“From February 2014 through April 2017, Morgan Stanley submitted at least 869 inaccurate blue sheets” to FINRA and the Securities and Exchange Commission, “misreporting information on at least 156,678 options transactions,” FINRA alleged.
In the process, Morgan Stanley violated the Securities Exchange Act and FINRA Rules 8211, 8213 and 2010, according to FINRA.
Without admitting or denying the findings, Allison Patton, Morgan Stanley managing director and head of retail litigation, on June 25 signed a FINRA letter of acceptance, waiver and consent, agreeing to pay the fine. FINRA accepted the offer Wednesday.
“We are pleased to have resolved this matter and have corrected these historical issues,” a Morgan Stanley spokeswoman said Thursday.
“FINRA first discovered Morgan Stanley’s blue sheet errors in late 2016, when blue sheet information submitted by Morgan Stanley proved to be inconsistent with information reflected in customer account statements,” FINRA said in the AWC letter.
In the case of two purchase and two sales transactions, the blue sheet submission indicated that a customer closed his options position (they were marked “buy close” and “sell close”), when in fact the transactions opened his options position (and should have been marked “buy open” and “sell open”), according to the regulator.
