The Federal Reserve is currently assessing the effectiveness of measures implemented by Morgan Stanley's wealth management business to prevent potential money laundering by affluent clients from overseas. 

The bank's primary regulator in New York is urging Morgan Stanley to improve its controls and processes, having privately expressed dissatisfaction with the firm's implementation of requested changes. Andy Saperstein, overseeing the division, has engaged with Fed officials and committed to addressing any deficiencies. 

According to InvestmentNews, this heightened regulatory scrutiny is part of a broader trend of increased oversight from Washington, prompting financial institutions to bolster internal controls to avoid potential sanctions.

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