Morgan Stanley faces a new investigation by top Wall Street regulators on how banks screen customers’ money laundering risks, exacerbating company compliance challenges.

Morgan Stanley

FINRA According to the Wall Street Journal, Morgan Stanley’s client review process, risk ranking and related practices across October 2021 to September 2024 are being studied. The survey covers the bank’s large-scale wealth management department, which includes Deal with *and its institutional securities units that handle transactions.

Regulators have been asking these departments about extensive documents about our and international clients. FINRA also wants to organize charts, report structures, and details about Morgan Stanley’s internal customer risk scoring system.

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Data quality issues surface

The investigation had some bumps early on. Bank employees marked concerns that the initial data sent to FINRA was incomplete or contained errors. This forced Morgan Stanley to submit additional information after regulators pointed out the gap.

Morgan Stanley has received at least six data requests from FINRA, including data requests in recent weeks. The amount of information sought indicates that regulators are fully understanding the bank’s obey system.

Banks defend their progress

A spokesman for Morgan Stanley told WSJ that the bank “has made a lot of investments in it”Money laundering Browse plans with customers. “This regulatory scrutiny is not unique to the bank and does not indicate any issues with its business or control,” he added. ”

The bank has been working to address the Fed’s long-term problems with risk management controls on its wealth management division. These problems have been on the radar of regulators for many years.

Related: Morgan Stanley is fined more than client fund theft fine with $15 million

History of compliance issues

This is not Morgan Stanley’s first run in anti-money laundering enforcement. Finra hits the bank A fine of $10 million in December 2018 For five years of compliance failure.

The bank is also dealing with other federal investigations into potential penalties for its anti-money laundering practices. Earlier this year, Swiss prosecutors fined Morgan Stanley local units $1.1 million instead of money laundering controls related to the Greek bribery scandal.

The latest FINRA detectors add regulatory pressure as Morgan Stanley is committed to cleaning up its compliance actions. Neither Finra nor Morgan Stanley immediately responded to requests for other comments other than the Wall Street Journal reported.

This article was written by Damian Chmiel on www.financemagnates.com.



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