(Reuters) -The U.S. Securities and Exchange Commission has ended its investigation into Morgan Stanley’s cash sweep program for advisory accounts and will not pursue enforcement action, the Wall Street bank said in a filing dated Monday. The bank had been in talks with the regulator since April last year. Cash sweeps allow clients to earn […]
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US SEC ends inquiry into Morgan Stanley’s cash sweep program with no enforcement action
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(Reuters) -The U.S. Securities and Exchange Commission has ended its investigation into Morgan Stanley’s cash sweep program for advisory accounts and will not pursue enforcement action, the Wall Street bank said in a filing dated Monday.
The bank had been in talks with the regulator since April last year.
Cash sweeps allow clients to earn a return on uninvested cash balances. Idle cash is automatically moved to an interest-bearing account or a money market fund, unless the account holder chooses to opt out.
Such programs of several banks came under the scrutiny of the SEC, threatening their high-margin wealth management businesses.
In January, Merrill Lynch and two Wells Fargo advisory firms agreed to pay a combined $60 million in civil penalties to settle SEC charges over compliance failures tied to their cash sweep programs. The companies did not admit or deny the regulator’s findings.
(Reporting by Niket Nishant in Bengaluru; Editing by Shilpi Majumdar)