WV Subpoenas Morgan Stanley Over Fund Trades

February 25, 2004 (PLANSPONSOR.com) - Morgan Stanley has received subpoenas from the Office of the State Auditor and the Attorney General of West Virginia requesting information about the firm's mutual fund trading practices.

The revelation was made in Morgan Stanley’s annual report filing with the US Securities and Exchange Commission (SEC).   It was also revealed by the company that documents were provided to Italian and British regulators about the firm’s involvement with ParmalatFinanziaria, according to a Dow Jones report.

Morgan Stanley is no stranger to probes into the firm’s mutual fund trading practices.   In an October SEC filing, the firm said it had received a subpoena from New York State Attorney General Eliot Spitzer concerned possible late trading and market-timing activities.  As with the earlier charges, regarding West Virginia’s investigations,the New York-based investment manager said it is cooperating with the investigations.

Spitzer has been conducting a wide-ranging investigation about late-trading and market-timing practices in the mutual fund industry. He has subpoenaed several dozen mutual fund companies, including giants Fidelity Investments and Franklin Resources, and a smaller number of hedge funds, as part of an investigation into illegal trading he believes may have cost investors billions (See  Spitzer Fund Abuse Probe Pumps Out More Subpoenas ).