Morgan Stanley Smith Barney LLC has agreed to pay a fine of $400,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).

From May 2018 through July 2022, Morgan Stanley provided written trade confirmations to non-institutional customers that did not accurately disclose or did not disclose at all the firm’s mark-ups and mark-downs for approximately 19,000 municipal securities and corporate debt transactions.

In addition, the firm did not disclose the time of execution, and/or a security-specific URL (providing a hyperlink to a FINRA or MSRB-hosted web page with publicly available trading data for the security), for approximately 35,000 fixed price, primary market transactions involving municipal securities and approximately 500,000 fixed price primary market transactions involving corporate or agency debt securities.

As a result, Morgan Stanley violated MSRB Rule G-15 (with respect to the municipal securities transactions) and FINRA Rules 2232 and 2010 (with respect to the corporate or agency debt transactions).

Additionally, Morgan Stanley did not establish, maintain, and enforce a supervisory system, including written supervisory procedures (WSPs), reasonably designed to achieve compliance with MSRB Rule G-15 and FINRA Rule 2232. As a result, Morgan Stanley violated MSRB Rule G-27 and FINRA Rules 3110(a) and 2010.

On top of the $400,000 fine, the firm has agreed to a censure.