By the end of the day, Morgan Stanley may have more regulators than just the SEC looking into how its sells funds.

Both Eliot Spitzer, New York State's attorney general, and William Galvin, secretary of state of Massachusetts, are reportedly ready to start an investigation of fund sales practices at the broker-dealer. The pair is expected to hold a press conference on the topic later today.

Galvin is also expected to announce an enforcement action against Morgan Stanley, although no details of the action could be learned by this morning. The press conference on the matter is set for 12:30 p.m. EDT at the Massachusetts State House in Boston.

While Galvin is expected to announce an enforcement action, Spitzer is reportedly ready to launch a broader probe into how the broker-dealer sells funds. Fund sales are not to be the only topic of the news conference. The pair of state officials is also expected to announce their opposition to a congressional amendment to the Securities Fraud Deterrence and Restitution Act that would effectively prevent state regulators from pursuing securities fraud cases.

Today's events come as the Securities and Exchange Commission (SEC) has been looking into sales practices at Morgan Stanley since April 29. That probe was revealed in the firms 10Q filing made last week.

Galvin has been leading an investigation into Morgan Stanley's mutual fund practices and plans to announce a major enforcement action, according to a person familiar with the situation. The nature of the enforcement action could not be determined. It is thought that all of the probes relate to sales of B shares at the broker-dealer. 

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE