CFTC v. Morgan Stanley Smith Barney (2014)

Judgment entered

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In September 2014 the CFTC settled charges that Morgan Stanley Smith Barney failed to supervise account opening and to keep adequate records, ordering a $280,000 civil monetary penalty and disgorgement of the commissions earned on the accounts of a customer later found to be running a Ponzi scheme.

The record

Structured fields for this action, as recorded in our case library.
Agency	CFTC
Release number	6998-14
Date filed	2014-09-15
Date resolved	2014-09-15
Status	judgment
Criminal parallel	Yes: sentenced (Benjamin Wilson, owner of the customer SureInvestment (seven years, UK prosecution); not Morgan Stanley), UK court (not named in the release)
Defendants	Morgan Stanley Smith Barney, LLC (entity)
Techniques

What was ordered

Civil penalty: $280k
Disgorgement: —
Prejudgment interest: —
Total relief: $280k
Alleged gain: —

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars.

What is alleged to have happened

The order finds that Morgan Stanley opened accounts for SureInvestment, a purported British Virgin Islands hedge fund, despite audits full of typos and other red flags for an entity that did not exist, and that the accounts were then used by its owner to continue a $35 million Ponzi scheme in the United Kingdom. It also finds failures to enforce trading limits, to answer a CFTC document request on time and accurately, and to keep adequate customer records.

The firm is not charged with running or paying into the scheme; the violations are supervision and recordkeeping failures. The record had tagged the matter as a Ponzi scheme on the strength of the customer's conduct.

No technique tag is applied; this taxonomy has no slug for know-your-customer and supervision failures.

Timeline

2014-09-15 CFTC release published

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

CFTC release

The linked release is a work of the United States government and is not subject to copyright. Our summary and narrative above are our own writing.

Record added September 10, 2026. submit a correction.