July 22 (Reuters) - The U.S. Financial Industry

Regulatory Authority (FINRA) is investigating Morgan Stanley ( MS )

over how the firm screened clients for money-laundering

risks, the Wall Street Journal reported on Tuesday, citing

people familiar with the matter.

The probe examines client vetting, risk rankings and related

practices across the Wall Street bank's wealth-management and

trading operations from October 2021 through September 2024, the

report said.

FINRA, a non-governmental self-regulatory organisation that

oversees U.S. broker-dealers under federal law, is seeking

information on U.S. and international clients across Morgan

Stanley's ( MS ) wealth unit, including E*Trade, and its institutional

securities division, according to the Journal.

The regulator has also requested organisational charts,

reporting lines and details on the firm's client risk-scoring

tool, the report added.

Some employees raised concerns that the initial data sent to

FINRA was incomplete or inaccurate, prompting the bank to

provide additional information after the regulator flagged gaps,

the Journal said.

A Morgan Stanley ( MS ) spokesperson told the Wall Street Journal

the bank has made significant investments in its

anti-money-laundering and client-vetting programmes, adding that

such regulatory reviews are not unique to the bank and do not

indicate problems with its business or controls.

Reuters could not independently verify the report. FINRA

declined to comment, while Morgan Stanley ( MS ) did not immediately

respond to a request for comment.

FINRA fined Morgan Stanley ( MS ) $10 million in December 2018 for

anti-money laundering compliance failures over a five-year

period.