Top state regulator to probe Morgan Stanley loan sales

James Gorman is about to feel some pain in Massachusetts.

William Galvin, the Bay State’s top securities regulator, has launched an investigation of Gorman’s Morgan Stanley and its alleged loan sales contests,which posed apparent conflicts of interest with clients, The Post has learned.

Gorman’s bank created a pilot program that divided financial advisers into “teams” and offered them financial incentives for selling securities-based loans — an apparent regulatory no-no because it could benefit the broker more than the client, The Post first reported in March.

Read on.

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