UNITED STATES OF AMERICA 

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES ACT OF 1933

Release No. 9618 / July 24, 2014

SECURITIES EXCHANGE ACT OF 1934

Release No. 72670 / July 24, 2014 

ADMINISTRATIVE PROCEEDING

 Release No. 3-15982

In the Matter of

MORGAN STANLEY AND CO. LLC;

MORGAN STANLEY ABS CAPITAL I INC.; and 

MORGAN STANLEY MORTGAGE CAPITAL 

HOLDINGS LLC

Respondents.

ORDER UNDER SECTION 27A(b) OF 

THE SECURITIES ACT OF 1933 AND 

SECTION 21E(b) OF THE 

SECURITIES EXCHANGE ACT OF 

1934, GRANTING WAIVERS OF THE 

DISQUALIFICATION PROVISIONS 

OF SECTION 27A(b)(1)(a)(ii) OF THE 

SECURITIES ACT OF 1933 AND 

SECTION 21E(b)(1)(A)(ii) OF THE 

SECURITIES EXCHANGE ACT OF 

1934

Morgan Stanley and Co. LLC, Morgan Stanley ABS Capital I, Inc., Morgan 

Stanley Mortgage Capital Holdings LLC (collectively “Morgan Stanley”) have submitted a 

letter on behalf of themselves and their affiliates, dated May 2, 2014, for a waiver of the 

disqualification provisions of Section 27A(b)(1)(A)(ii) of the Securities Act of 1933 (the 

“Securities Act”) and Section 21E(b)(1)(A)(ii) of the Securities Exchange Act of 1934 (the 

“Exchange Act”) arising from their settlement of cease-and-desist proceedings brought by 

the Commission.

On July 24, 2014, the Commission instituted cease-and-desist proceedings against 

Morgan Stanley. In the Order Instituting Proceedings (the “Order”), the Commission found 

that Morgan Stanley made misleading disclosures regarding the number of current and/or

historical loan delinquencies in two subprime residential mortgage-backed securities

transactions that Morgan Stanley sponsored, issued, and underwrote in 2007. Based on 

these allegations, the Commission concluded that Morgan Stanley violated Sections 

17(a)(2) and 17(a)(3) of the Securities Act. Without admitting or denying the findings,

Morgan Stanley consented to the entry of the Order requiring them to, among other things,

cease and desist from committing or causing any violations and any future violations of 

Sections 17(a)(2) and (3) of the Securities Act. 
2

The safe harbor provisions of Section 27A(c) of the Securities Act and Section 

21E(c) of the Exchange Act are not available for any forward looking statement that is 

“made with respect to the business or operations of an issuer, if the issuer ... during the 3-

year period preceding the date on which the statement was first made ... has been made the 

subject of a judicial or administrative decree or order arising out of a government action that 

... (II) requires that the issuer cease and desist from violating the antifraud provisions of the 

securities laws....” Section 27A(b)(1)(A)(ii) of the Securities Act and Section 

21E(b)(1)(A)(ii) of the Exchange Act. The disqualifications may be waived “to the extent 

otherwise specifically provided by rule, regulation, or order of the Commission.” Section 

27A(b) of the Securities Act and Section 21E(b) of the Exchange Act. 

Based on the representations set forth in Morgan Stanley’s letter, the Commission 

has determined that, under the circumstances, the request for a waiver of the 

disqualifications resulting from the issuance of the Commission’s Order instituting 

proceedings is appropriate and should be granted.

Accordingly, IT IS ORDERED, pursuant to Section 27A(b) of the Securities Act 

and Section 21E(b) of the Exchange Act, that a waiver from the disqualification provisions 

of Section 27A(b)(1)(A)(ii) of the Securities Act and Section 21E(b)(1)(A)(ii) of the 

Exchange Act as to Morgan Stanley and Co. LLC, Morgan Stanley ABS Capital I, Inc., 

Morgan Stanley Mortgage Capital Holdings LLC and their present and future affiliates 

resulting from the entry of the Order is hereby granted.

By the Commission.

Jill M. Peterson

Assistant Secretary