Massachusetts regulators last Monday filed administrative proceedings against Morgan Stanley for providing its brokers with higher commissions and bonuses to sell in-house funds and funds of partner firms (see related story, page 1). The state believes these sales tactics earned Morgan $5 million to $8 million in commissions since January alone. In a statement, Secretary of the Commonwealth William Galvin compared Morgan Stanley's sales practices to those of used-car salesmen.

A regional director for the firm allegedly told managers in a number of e-mails not to put the $100,000 bonus contest in writing, but to coach brokers verbally. Brokers were also allegedly told not to disclose the contest to clients.

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