Morgan Stanley Faces NASD Action on Fixed-Fee Accounts

Securities regulators are on the verge of sanctioning Morgan Stanley (MWD Quote) for potential violations in the marketing of its popular fee-based brokerage accounts.

The big Wall Street investment firm disclosed the possible regulatory action by the NASD in its 2004 annual report filed early Friday. Morgan Stanley said the NASD informed it in November that its regulatory staff has made a "preliminary determination to recommend disciplinary action" over the brokerage's "Choice" accounts program.

The looming threat to Morgan Stanley is the first of what could become a wave of regulatory actions against Wall Street firms over fee-based accounts. Last year, regulators from the NASD, the Securities and Exchange Commission and the New York Stock Exchange all said they are looking into potential abuses in fee-based accounts. ...