Morgan Stanley’s stock fell 5% on reports that federal regulators are investigating its wealth management unit.
The investigation concerns a risk of money laundering among Morgan Stanley’s wealthy clients, according to media reports.
The U.S. Securities and Exchange Commission (SEC), the Office of the Comptroller of the Currency, and the U.S. Treasury Department are each involved in the investigation.
Regulators are apparently concerned that Morgan Stanley hasn’t sufficiently vetted the identities and backgrounds of its wealth management clients and the source of their money.
Morgan Stanley is also being investigated over how it monitors its clients’ financial activities. Last year, it was revealed that the U.S. Federal Reserve was looking into the investment bank’s wealth management division over similar issues.
Morgan Stanley’s wealth management unit is one of the largest of its kind in the world with $5.1 trillion U.S. in client assets.
Morgan Stanley’s stock has declined 8% so far in 2024 and currently trades at $86.84 U.S. per share.