On October 3, 2016, Morgan Stanley was charged with “dishonest and unethical conduct” by a top Massachusetts securities regulator.
Morgan Stanley is accused of facilitating high-pressured sales contests in Massachusetts and Rhode Island, where brokers had the opportunity to earn thousands of dollars for selling high volumes of securities based loans. Securities based loans allow clients to borrow money against the value of their investment accounts, but are known to involve a non-negligible risk including the bank’s ability to sell securities to repay the loan.