Introduction

Morgan Stanley > Stock Research > New York AG Probe > Assurance of Discontinuance > Introduction

Morgan Stanley and New York: Introduction

ATTORNEY GENERAL OF THE STATE OF NEW YORK

BUREAU OF INVESTMENT PROTECTION

In the Matter of

MORGAN STANLEY & Co. INCORPORATED

ASSURANCE OF DISCONTINUANCE PURSUANT TO EXECUTIVE LAW 63(15)

WHEREAS, pursuant to the provisions of the Martin Act (Article 23-A of the General Business Law), Eliot Spitzer, Attorney General of the State of New York, commenced in March 2002 an investigation into the practices, procedures and conduct of Morgan Stanley & Co. Incorporated ("Morgan Stanley") respecting the preparation and issuance of Morgan Stanley's U.S. equity research analysts ("research analysts" or "analysts") of research, analysis, ratings, recommendations and communications concerning common stocks of publicly traded companies covered by such analysts ("research coverage"), during the period 1999 through 2001, including without limitation, commencement and discontinuance of research coverage, actual or potential conflicts of interests affecting research coverage, research analysts or termination of research analysts, and statements, opinions, representations and non-disclosure of material facts in research coverage (the "investigation");

WHEREAS, the Investigation was conducted in connection with a multi-sate task force and a joint task force of the U.S. Securities and Exchange Commission, the New York Stock Exchange, Inc. and NASD, Inc.;

WHEREAS, in the course of the Investigation, numerous witnesses were interviewed and/or deposed and extensive documentary evidence was reviewed;

WHEREAS, Morgan Stanley has cooperated in the Investigation by producing documentary evidence and witnesses;

WHEREAS, the Investigation finds that certain practices by Morgan Stanley have violated the Martin Act;

WHEREAS, Morgan Stanley has advised regulators of its agreement to resolve the Investigation;

WHEREAS, Morgan Stanley agrees to implement certain changes with respect to research and stock allocation practices, and to make certain payments; and

WHEREAS, the Attorney General and Morgan Stanley now desire to settle and resolve the Investigation, and Morgan Stanley agrees to the sanctions provided herein;

NOW THEREFORE, the Attorney General, based upon the Investigation, makes the following findings: