Morgan Stanley consented to the SEC's cease-and-desist order and agreed to the $13 million penalty, a censure, and undertakings related to its fee billing and books and records procedures.

The US Securities and Exchange Commission has said that Morgan Stanley has agreed to pay a $13 million fine to settle charges that it overcharged investment advisory clients due to coding and system errors, without admitting or denying the findings of the regulator's probe.

The financial watchdog's order found that the New York-headquartered bank overcharged more than 149,000 advisory clients as it failed to adopt and implement compliance policies and procedures designed to ensure clients are accurately billed according to the terms of their advisory agreements. According to the SEC, Morgan Stanley also failed to validate billing rates, fee billing histories and “other documentation”.

As a result, the firm received more than $16 million in excess fees due to billing errors that occurred between 2002 and 2016, the SEC said. Morgan Stanley has reimbursed affected clients this full amount plus interest, then regulator added.

''Investors must be able to trust that their investment advisers have put appropriate safeguards in place to ensure accurate billing. The long-running deficiencies in those safeguards at Morgan Stanley resulted in 36 different types of billing errors that caused overcharges to customers,'' said Andrew Calamari, director of the SEC's New York regional office.

Without admitting or denying the findings that it violated various provisions of the Investment Advisers Act of 1940 and related rules, Morgan Stanley consented to the SEC's cease-and-desist order and agreed to the $13 million penalty, a censure, and undertakings related to its fee billing and books and records procedures.