According to an investigation by the SEC, Morgan Stanley Investment Management (MSIM) claimed that it contracted a subsidiary of AM Bank Group to provide it with advice while working with The Malaysia Fund.
The fundâs contract with the sub-adviser was renewed annually for over a decade at a cost of $1.8 million to investors.
However, the investigation found that AMB only provided two monthly reports, which were based on publicly available information not requested or used by MSIM.
Bruce Karpati, co-chief of the SEC Enforcement Divisionâs Asset Management Unit, said: âMSIM failed in its duty to provide the fundâs board members with the information they needed to fulfill their significant responsibility of reviewing and approving the sub-adviserâs contract.
âMSIMâs failure undermined the integrity of the boardâs oversight process.â
Meanwhile, the SEC announced that the ex-chief executive officer and chairman of CSK Auto Corporation agreed to hand over $2.8 million in bonus payments and stock he received while the company was committing fraud.
By Jim Ottewill