FINRA Fines Morgan Stanley (NYSE: MS) $800,000 for Failing to Disclose Conflicts of Interest

The Financial Industry Regulatory Authority fined Morgan Stanley (NYSE: MS) $800,000 for failing to adequately disclose conflicts of interests on the part of its research analysts.

The industry regulatory found that between 2006 and 2010, Morgan Stanley (NYSE: MS) did not disclose accurate information about the company’s or analysts’ relationships with the companies that that covered in their research report.

FINRA found that the disclosures violated the 2003 Research Analyst Settlement. The agreement followed a scandal on Wall Street a decade ago where analysts provided favorable ratings they covered without disclosing a conflict of interest to investors.

Morgan Stanley sent out about 128,000 statements between August 2007 and February 2008 which failed to disclose to customers that third-party, independent research was available.

The bank neither admitted or denied the charges, but the potential violations were first reported by Morgan Stanley to FINRA.

As part of the penalty, Morgan Stanley (NYSE: MS) must sample its research reports to ensure adequate disclosures for the next two years.

A spokeswoman for Morgan Stanley (NYSE: MS) said the company is pleased to settle the matter and has implemented measures to improve disclosure.

Morgan Stanley (NYSE: MS) traded down 1.61% hitting $26.89 during mid-day trading on Wednesday.