February 14, 2017
Morgan Stanley Smith Barney, LLC
SANCTION AMOUNT: $8,000,000
Defendants: Morgan Stanley Smith Barney, LLC
Respondent Morgan Stanley did not adequately implement its policies and procedures to ensure that advisory clients understood the risks involved with purchasing inverse ETFs. These investments were typically unsuitable for investors planning to hold them longer than one trading session unless used as part of a trading or hedging strategy. Morgan Stanley recommended them, including for retirement accounts, but did not ensure their suitability through adequate disclosure, monitoring, etc.
- Key Docs
- Official SEC press release