Morgan Stanley is being probed by the Financial Industry Regulatory Authority over its vetting of clients for the risk of money laundering, the Wall Street Journal reported.
The scrutiny focuses on the U.S. bank’s clients, risk ranking and other practices from October 2021 through September 2024, the report said, citing unidentified people familiar with the matter.
Morgan Stanley is already facing potential fines from federal investigations into its anti-money laundering practices, the report said.
Morgan Stanley has been working on fixing its client-screening practices after the Federal Reserve for years raised concerns about risk-management controls in the firm’s wealth-management unit.
A Morgan Stanley spokesperson said the company has made substantial investments in its anti-money-laundering and other client-vetting programs over the past several years that are benefiting its business, according to the WSJ report.
Within the probe, FINRA has asked for information on U.S. and international customers in the firm’s wealth-management division, as well as in the unit that houses its trading desks, the report said.
Morgan Stanley received at least six requests from FINRA for large amounts of data, including one in recent weeks, the WSJ said.
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