The Securities and Exchange Commission said it’s fined Morgan Stanley & Co. $7.5 million for allegedly using trades involving customer cash to lower the firm’s borrowing costs. The SEC order said from March 2013 to May 2015, Morgan Stanley’s U.S. broker-dealer used transactions with an affiliate to reduce the amount it was required to deposit in its customer reserve account. The affiliate used margin loans from the U.S. broker-dealer to finance the costs of hedging swap trades with customers, the SEC said. Morgan Stanley didn’t admit or deny the findings.
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