Hong Kong's securities regulator has fined MORGAN STANLEY US$2.4m for internal control failures between 2013 and 2016 relating to disclosure of short-selling orders and documentation of electronic trading. The Securities and Futures Commission has been clamping down on control failures in banks' trading businesses in the last year and said the bank was cooperative and had agreed to a review of its internal controls by an outside firm. Morgan Stanley failed to establish adequate 'Chinese Walls' between dealers handling discretionary deals and principal accounts, causing conflicts of interest between principal and agency trading, according to the regulator.
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