MARKET REFORM MOVEMENT-NSS/FTDS&RELATED ISSUES

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NEW YORK: Morgan Stanley Inc. was fined $500,000 (€391,359) by the New York Stock Exchange for failure to file accurate short-interest sales reports to several U.S. stock exchanges.

The Big Board said Wednesday the brokerage failed to "establish and maintain appropriate procedures" to disclose its short selling. The inaccurate reports were filed during an "unknown but significant" number of years, according to the NYSE.

The fine will be split between the NYSE, National Association of Securities Dealers, and the American Stock Exchange. The NASD is the regulatory body responsible for the Nasdaq Stock Market.

Morgan Stanley agreed to the fine, and neither admitted or denied wrongdoing. The fine was given to the New York-based financial company through NYSE Regulation Inc.

Short-interest transactions involves the sale of a security at the current price, which is then settled with shares lent to the seller by a third party. The seller hopes to make money off the trade by betting the price of the security will go down.

Brokerages are required to report their short positions on a monthly basis.

Morgan Stanley fell 36 cents to $75.54.