WASHINGTON (CN) - Morgan Stanley Investment Management will pay $3.3 million to settle SEC charges that it bilked investors by claiming it paid an adviser more than $1.8 million for advice, though the so-called "sub-adviser" did nothing of the kind.
Morgan Stanley Investment Management, as primary adviser to The Malaysia Fund, told investors and the fund's board of directors that it had hired "a Malaysian-based sub-adviser to provide advice, research and assistance to MSIM for the benefit of the fund, which invests in equity securities of Malaysian companies," the SEC said in announcing the settlement.
It added: "The sub-adviser did not provide these purported advisory services, yet the fund's board annually renewed the contract based on MSIM's representations for more than a decade at a total cost of $1.845 million to investors."
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