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.
Copyright 2003 Thomson Media Inc. All Rights Reserved.
http://www.thomsonmedia.com http://www.mmexecutive.com
