The New York Times reports that Morgan Stanley has confirmed that US regulator The Securities and Exchange Commission (SEC) is considering an enforcement action against the firm for allegedly using 'forbidden' incentives to sell in-house mutual funds. That's not all, though.
According to its most recent quarterly regulatory filing, Morgan Stanley has also received a subpoena from New York State Attorney General Eliot Spitzer in connection with his probe into mutual fund trading practices. A subpoena doesn't necessarily mean much, however, as it could be just a fishing expedition on Spitzer's part.
The firm remains under the microscope in Massachusetts as state regulators consider making administrative charges in connection with the sale of mutual funds there. Morgan Stanley already faces two sets of civil charges over the sales practices in the state.