Morgan Stanley (MS) was sued by a Birmingham, Alabama, medical center over claims the bank received improper payments from ING Life Insurance and Annuity Co. in exchange for referral of retirement-investment business.
The bank placed retirement plans with so-called alliance partners, including ING, and received additional compensation from them based on the assets invested, according to the suit filed today in federal court in Manhattan. The compensation amounted to a “pay-to-play” fee, prohibited by U.S. law, according to the suit brought by Skin Pathology Associates Inc.
“The alliance partner program is structured to take advantage of a conflict of interest Morgan Stanley has created,” the skin-testing center said in the complaint.
The Skin Pathology alleged it hired New York-based Morgan Stanley, the sixth-largest institutional broker in the U.S., as a broker for the retirement plan that was placed with ING. The center is seeking damages on behalf itself and other companies subject to Morgan Stanley’s alliance partner program.
Morgan Stanley spokesman Akhilesh Raina declined to comment on the lawsuit. Dana Ripley, a spokesman for ING, said he couldn’t immediately comment.
The case is Skin Pathology Associates Inc. v. Morgan Stanley & Co., 13-cv-3299, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Christie Smythe in federal court in New York, at email@example.com
To contact the editor responsible for this story: Michael Hytha at firstname.lastname@example.org