Fund Probe Subpoenas Sent to Morgan Stanley

Morgan Stanley, the second-largest U.S. securities firm, said Wednesday that it had been subpoenaed by U.S. and state regulators as part of a probe into trading abuses in the mutual fund industry.

The Office of the State Auditor and the attorney general of West Virginia sent subpoenas to the firm early this month, Morgan Stanley said in its annual filing with the Securities and Exchange Commission.

The firm has already received subpoenas from the SEC and from the U.S. attorney’s office in Massachusetts, it said.

“Morgan Stanley is cooperating with these and other regulatory investigations,” the firm said in the filing.

Also Wednesday, Strong Capital Management Inc., one of the first companies named in the mutual fund trading scandal, said it received a subpoena from the West Virginia attorney general for documents related to market-timing and late-trading practices.

State and federal regulators are investigating more than 20 firms for allowing frequent trading in mutual funds that wasn’t permitted by fund prospectuses.

Other Wall Street firms that have received subpoenas related to mutual fund trades include Goldman Sachs Group Inc., the No. 3 U.S. securities firm, which said in a filing Tuesday that it received the demands from “various regulators including the SEC as part of the industrywide investigation.”