Morgan Stanley & Co. LLC has agreed to a censure and a fine of $168,750 as a part of a settlement with Cboe Exchange, Inc.
On May 3, 2021, the firm effected an off-floor transfer of approximately 50,000 options contracts between two customer accounts of different Persons, Customer A, a limited liability company, and Customer B, a separate limited liability company which was also a member of Customer A.
The customers requested the transfer to facilitate Customer B’s withdrawal of its interest in Customer A. Although the ultimate beneficial ownership of the options contracts that were transferred remained unchanged, the direct ownership of the contracts changed from one legal entity to another and therefore the transaction did not constitute a transfer between the accounts of the same Person pursuant to Exchange Rule 6.7(a)(2).
