$280k fine for Morgan Stanley for ignoring red flags opening ponzi account

Morgan Stanley was fined $280,000 for ignoring 'numerous red flags' in opening an account tied to a multimillion-dollar Ponzi scheme, a U.S. regulator said.

Bloomberg News reports that the bank’s Smith Barney unit was cited for improper supervision and records violations, the Commodity Futures Trading Commission said Monday in a statement.

The New York-based company also failed to enforce trading limits it assigned to the account and adequately respond to regulators’ requests for documents, the CFTC said.

The accounts were used by Benjamin Wilson, the owner of SureInvestment, to continue a $35 million Ponzi scheme based in the U.K., according to the statement. Wilson was sentenced to seven years in prison this year after pleading guilty to charges brought by that country’s Financial Conduct Authority, the CFTC said.

Morgan Stanley ignored 'warning signs' even as the account should have received special scrutiny because two SureInvestment entities were based in the British Virgin Islands.

Hit the link below to access the complete Bloomberg News article:

Morgan Stanley Fined for Violations Tied to Ponzi Scheme

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