FINRA Probes Morgan Stanley Over AML Controls for High-Net-Worth Clients

Morgan Stanley faces scrutiny from the Financial Industry Regulatory Authority (FINRA) regarding potential anti-money laundering (AML) control failures tied to its wealth management and institutional clients. The investigation spans domestic and international accounts managed between October 2021 and September 2024, with particular focus on politically exposed persons (PEPs).

Units under review include Morgan Stanley Wealth Management, its institutional securities division, and E*Trade—the digital trading platform acquired in 2020. This follows FINRA's August 2023 charge against the bank for failing to report over 535,000 municipal and debt securities transactions from 2018 to 2022.

The probe highlights systemic challenges in monitoring high-risk clients across traditional and digital finance ecosystems. While no cryptocurrencies are directly implicated, the case underscores tightening regulatory crosshairs on wealth management platforms that bridge fiat and digital asset flows.