Financial giant Morgan Stanley could face a serious investigation from U.S. regulators due to its decision to promote spot Bitcoin ETFs among its clients, according to former SEC Chairman John Reed Stark.
“By instructing its army of 15,000 brokers to actively promote spot BTC ETFs, Morgan Stanley has effectively opened the door to what could become the largest investigation in SEC and FINRA history,” Stark emphasized.
He also added that SEC and FINRA officials will gain full access to all internal company correspondence related to the sale of spot Bitcoin ETFs to retail investors. This will allow regulators to thoroughly scrutinize every aspect of Morgan Stanley’s activities in this area, and identifying potential violations could prove as easy as shooting fish in a barrel.
In Stark’s view, regulators will pay particularly close attention to how Morgan Stanley complies with all requirements for investor protection and the prevention of potential conflicts of interest. Any violations in this area could lead to serious consequences for the company, including possible fines and other sanctions.
