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Morgan Stanley Queried by SEC Over Accounting Mistakes

The Securities and Exchange Commission asked Morgan Stanley about “multiple significant deficiencies” in its financial reporting after the firm corrected accounting errors involving loan cash flows, income taxes and derivatives contracts.

Morgan Stanley said that while its Sarbanes-Oxley program identified defects that affected risk assessment and monitoring controls, the “overall design and operation of its control framework” was effective, according to letters between the company and regulator that were released today.