SEC-PR-2412-193

According to the SEC’s order, MSSB failed to adopt and implement policies and procedures reasonably designed to prevent its financial advisors from using two forms of unauthorized third-party disbursements, Automated Clearing House (ACH) payments and certain patterns of cash wire transfers, to misappropriate funds from advisory client accounts and brokerage customer accounts. The order finds that MSSB financial advisors made hundreds of unauthorized transfers from customers’ or clients’ accounts to themselves or for their own benefit.

“Safeguarding investor assets is a fundamental duty of every financial services firm, but MSSB’s supervisory and compliance policy failures let its financial advisors make hundreds of unauthorized transfers from their customer and client accounts and put many other such accounts at significant risk of harm,” said Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement. “However, today’s resolution also takes into account the firm’s several self-reports to, and substantial cooperation with, the Commission staff and its remedial efforts, including compensating the financial advisors’ victims and retaining a compliance consultant to conduct a comprehensive review of the relevant policies and procedures.”