Category Archives: U.K. Financial Conduct Authority

Failure to Heed “Red Flags” In Ponzi Scheme Results in $280,000 Fine For Morgan Stanley Smith Barney

September 15, 2014, Washington, DC

Morgan Stanley Smith Barney was fined  $280,000 and ordered to disgorge commissions in connection with a  $35 million Ponzi Scheme being operated in a purported  British Virgin Island hedgefund, SureInvestment.

Under Morgan Stanley’s compliance procedures, the British Virgin Islands is deemed a “high risk jurisdiction”. According to the release from the U.S. Commodity Trading Futures Commission (CFTC) , in Morgan Stanley Enhanced Due Diligence and Customer Identification Program procedures they are required to “know its customer” and to be alert for any “red flags” regarding suspicious activity.

Earlier this year, the owner of SureInvestment, Benjamin Wilson, was sentenced to seven years by the U.K. Financial Conduct Authority.

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