UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
Securities Exchange Act of 1934
Release No. 34-61598 / February 26, 2010
Administrative Proceeding File No. 3-12907
In the Matter of
Morgan Stanley & Co. Incorporated
NOTICE OF PROPOSED PLAN OF DISTRIBUTION AND OPPORTUNITY FOR COMMENT
Notice is hereby given, pursuant to Rule 1103 of the U.S. Securities and Exchange Commission's ("Commission") Rules on Fair Fund and Disgorgement Plans, 17 C.F.R. § 201.1103, that the Division of Enforcement has filed with the Commission a proposed plan for the distribution of the Fair Fund in this matter ("Distribution Plan"). On December 18, 2007, the Commission instituted settled administrative and cease-and-desist proceedings against Morgan Stanley & Co. Incorporated ("MS&Co.") for violations of Sections 15(b)(4) and 17(a)(1) of the Securities Exchange Act of 1934 ("Exchange Act"), Exchange Act Rule 17a-3, and Rule 22c-1(a) under the Investment Company Act of 1940 (Rel. No. 34-56980) (the "Order"). Pursuant to the Order, a Fair Fund was established, comprised of $17,000,000.00 in disgorgement, prejudgment interest, and a civil penalty paid by MS&Co., for distribution to mutual funds affected by certain market-timing activity.
OPPORTUNITY FOR COMMENT
Pursuant to this Notice, all interested parties are advised that they may obtain a copy of the Distribution Plan from the Commission's public website, http://www.sec.gov, or by submitting a written request to Christopher R. Conte, Associate Director, United States Securities and Exchange Commission, 100 F Street, N.E., Washington, D.C. 20549. All persons who desire to comment on the Distribution Plan may submit their comments, in writing, within 30 days of the date of this Notice:
by sending a letter to the Office of the Secretary, United States Securities and Exchange Commission, 100 F Street, N.E., Washington, D.C. 20549-1090;
by using the Commission's Internet comment form (http://www.sec.gov/litigation/admin.shtml); or
by sending an e-mail to firstname.lastname@example.org.
Comments submitted by e-mail or via the Commission's website should include "Administrative Proceeding File Number 3-12907" on the subject line. Comments received will be publicly available. Persons should submit only information that they wish to make publicly available.
THE DISTRIBUTION PLAN
The Fair Fund is comprised of $17,000,000.00 paid by MS&Co., which consists of $4.4 million in disgorgement, $720,000 in prejudgment interest, and a civil penalty of $11.88 million. The Distribution Plan provides for distribution of the Fair Fund, plus any accumulated interest, less any taxes, to mutual funds affected by market-timing conduct between January 2002 and August 2003 ("affected mutual funds") as described in the Order. The Distribution Plan describes the procedures by which affected mutual funds are identified, the procedures used to calculate the amounts to be paid to these mutual funds, and how those amounts are to be distributed. Accordingly, the affected mutual funds need not go through a claims-made process. Pursuant to the Distribution Plan, MS&Co. is responsible for all costs and expenses associated with the distribution.
By the Commission.
Elizabeth M. Murphy
See Also: Proposed Distribution Plan