Morgan Stanley is in a bit of hot water for selling the wrong funds to the wrong folk.

The New Jersey Bureau of Securities levied a $100,000 sanction against the broker-dealer after its employees were accused of breaking state laws for selling non-traditional exchange traded funds to state residents, The Star Ledger's Ed Beeson reports.

Beeson reports that Morgan Stanley allegedly sold New Jerseyans "complex investment products that weren’t appropriate for them."

He writes that the products at issue are non-traditional exchange-traded funds.

Regulators aren't fond of the complexity of these particular ETFs and argue it is difficult for the typical investor to understand them, especially if the investor is elderly, Beeson writes. Beeson reports that the activities Morgan Stanley has been sanctioned for happened between January 2007 and June 2009.

Morgan Stanley isn't the only company accused of tricking the elderly in recent news. A year ago, the Office of Comptroller of the Currency warned JP Morgan [profile] that it had wrongfully advised retirement plan participants to invest in in-house investment products.

To read more, click here.  

Edited by: Casey Quinlan


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