According to the Financial Industry Regulatory Authority (FINRA), the investment bank failed to make research showing relationships it and its advisors had with other companies available.
The information is expected to be made public as part of rules governing conflicts of interest within the sector.
FINRA also found the bank to have failed to inform customers that independent research was available in their statements.
James S Shorris, FINRA executive vice-president and acting chief of enforcement, said: âThis case strikes at the heart of FINRA's research disclosure requirements, which were written in response to scandals involving research analyst conflicts of interest.
âHere, thousands of Morgan Stanley research reports did not include accurate information about the firm's relationships with the companies it covered, depriving potential investors of important information.â
As part of FINRAâs recommendations, the bank must now review its research reports between every six months and every two years.
Morgan Stanley neither admitted nor denied the allegations.
By Jim Ottewill