NASD Regulation Inc. said Tuesday that Morgan Stanley & Co. has been fined $35,000 and will pay over $80,000 in restitution after settling charges that it failed to provide three customers the best execution possible in the sale of common stock. The firm was also censured.

Morgan Stanley, which neither admitted nor denied NASD Regulation's findings, will pay restitution and interest to the three investors. In its settlement, Morgan Stanley was also cited for violating rules and regulations relating to trade reporting and record keeping in connection with these transactions.

According to findings, three customers placed their sell orders for 29,400 shares with Morgan Stanley before the market's opening on February 8, 1996. Had the three orders been executed promptly, the customers could have received a higher price for their shares than they did.

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