Morgan Stanley Pays to Settle Fund Charges

Morgan Stanley Dean Witter & Co. agreed to pay $476,702 to settle charges the brokerage firm failed to detect and prevent unnecessary mutual fund switching fees. The Securities and Exchange Commission said the firm’s Atlanta office in the mid-1990s violated anti-fraud provisions of the federal securities laws by repeatedly taking customers’ money out of one mutual fund and putting it into another, charging fees for each transaction. Morgan Stanley, a broker-dealer registered with the SEC, NYSE and Nasdaq, consented to the order without admitting or denying the commission’s finding, which grew out of an administrative proceeding. The payment includes a $200,000 fine and $276,702 that must be returned to customers who were unnecessarily forced to pay $157,000 in sales charges, the SEC said. Interest and other expenses were tacked on to the repayment. Morgan Stanley did not immediately return a telephone call seeking comment. Its shares rose $1.63 to close at $102.88 on the NYSE.