Sunday, May 19, 2024

Polaris of Enlightenment

Sunday, May 19, 2024

Polaris of Enlightenment

Major bank under investigation for money laundering

The crisis of confidence in banks

Published 16 April 2024
- By Editorial Staff
Morgan Stanley has 600 offices in 33 countries.

US banking giant Morgan Stanley is now under investigation by several federal regulators.

This time, its wealth management division is under scrutiny. Authorities say the bank neither knows nor seems to care where its wealthy clients’ money comes from.

In February, the investment bank was implicated in a money-laundering scandal in Venezuela and was investigated by the U.S. Department of Justice and the U.S. Securities and Exchange Commission, which oversees securities trading.

Now, the SEC and several other U.S. agencies have begun investigating Morgan Stanley’s wealth management division, and the Federal Reserve has also become involved, the Wall Street Journal reports.

They say the bank does not know enough about where its wealthy clients’ money comes from – and does not appear to be doing much to control it.

The authorities point out that the investment bank has not mapped the financial activities and histories of its clients, including international clients who are considered to be involved in various forms of suspicious or illegal activities.

Relies on revenues

At the same time, it is emphasized that the bank is dependent on the high revenues of its wealth management department and has been since the financial crisis of 2008 – this is also believed to be the reason why it did not bother to sufficiently check where the money actually comes from.

“The division generates stable revenue streams that Morgan Stanley relies on to smooth out downturns in investment, banking and trading”, Swedish business magazine Dagens PS points out.

Morgan Stanley has previously stated that it intends to cooperate fully with the US authorities in all cases related to money laundering.

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