RegAlert2015-12-22
Added · Updated
SEC Division of Corporation Finance no-action letter: Morgan Stanley
The Division of Corporation Finance grants Morgan Stanley a waiver from being classified as an ineligible issuer under Rule 405 of the Securities Act, allowing it to retain its well-known seasoned issuer status despite a Commission Order against its subsidiary, Morgan Stanley Investment Management, Inc. The determination is based on a showing of good cause, noting that the underlying violations involved a single employee's misconduct, were non-scienter based, and did not impact the parent company's disclosure reliability. The waiver is contingent upon MSIM's compliance with the Order, which requires the payment of approximately $774,000 in disgorgement plus interest and an $8 million civil monetary penalty, along with cease-and-desist obligations. The Division reserves the right to revoke or further condition the waiver if facts differ from those represented or if compliance with the Order fails.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE
December 22, 2015
David Meister
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036
Re: In re Morgan Stanley Investment Management, Inc. and Sheila Huang (NY-09022) Morgan Stanley – Waiver Request of Ineligible Issuer Status under Rule 405 of the Securities Act Dear Mr. Meister:
This is in response to your letter dated December 14, 2015, written on behalf of Morgan Stanley (“Company”) and constituting an application for relief from the Company being considered an “ineligible issuer” under Clause (1)(vi) of the definition of ineligible issuer in Rule 405 of the Securities Act of 1933 (“Securities Act”). The Company requests relief from being considered an “ineligible issuer” under Rule 405, due to the entry on December 22, 2015, of a Commission Order (“Order”) pursuant to Section 8A of the Securities Act, Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 (“Advisers Act”), and Sections 9(b) and 9(f) of the Investment Company Act of 1940 (“Investment Company Act”) against Morgan Stanley Investment Management, Inc. (“MSIM”). The Order requires that, among other things, MSIM cease and desist from committing or causing any violations and any future violations of Section 17(a)(3) of the Securities Act, Sections 206(2) and 206(4) of the Advisers Act and Rule 206(4)-7 thereunder, and Section 17(a)(2) of the Investment Company Act. Based on the facts and representations in your letter, and assuming MSIM complies with the Order, the Commission, pursuant to delegated authority has determined that the Company has made a showing of good cause under Clause (2) of the definition of ineligible issuer in Rule 405 and that the Company will not be considered an ineligible issuer by reason of the entry of the Order. Accordingly, the relief described above from the Company being an ineligible issuer under Rule 405 of the Securities Act is hereby granted. Any different facts from those represented or failure to comply with the terms of the Order would require us to revisit our determination that good cause has been shown and could constitute grounds to revoke or further condition the waiver. The Commission reserves the right, in its sole discretion, to revoke or further condition the waiver under those circumstances. Sincerely, /s/ Elizabeth Murphy Associate Director Division of Corporation Finance
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Source: Securities and Exchange Commission — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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