Shares of Morgan Stanley fell as much as 6.5% after a report that a cadre of US regulators is looking into the firm's efforts to prevent possible money laundering by wealthy clients.

The Securities and Exchange Commission, the Office of the Comptroller of the Currency and other Treasury Department offices are probing whether the New York-based bank did enough to investigate the identities of risky customers, the Wall Street Journal reported, citing people unidentified known. with the case. The Federal Reserve was already known to be considering those controls last year.

The SEC and the Treasury's Financial Crimes Enforcement Network have requested information about some customers outside the US that raised red flags and the bank's policies to address it. Specifically, the SEC pressed Morgan Stanley's unit that serves wealthy people about why it did business with some who had been terminated by E*Trade, the digital trading platform the company bought.

The stock fell 5.5% to $86.61 at 2:45 p.m. in New York. A Morgan Stanley spokesman declined to comment.

The bank has told regulators it is improving controls and procedures and met with Federal Reserve officials to alleviated last year's concerns. The property business has grown into the firm's largest unit and has expanded in recent years following acquisitions.