The SEC has chastised Morgan Stanley's fund management unit for charging clients for advice, farming out the job to a Malaysian firm, and then never following up.
Morgan reportedly agreed to manage the Malaysia Fund back in 1996, only to hand the responsibility to a subsidiary of local institution AM Bank.
Malaysia is a tough market to crack, so getting local expertise onboard was a good idea.
Unfortunately, AM Bank appears to have only come up with two boilerplate reports and then nothing more.
Interestingly, the SEC says their investigation is continuing even though Morgan has already settled the case.