WASHINGTON — The Financial Industry Regulatory Authority announced Thursday that Morgan Stanley & Co. LLC and a subsidiary have agreed to pay $1.19 million in fines and restitution for unfair pricing of muni and corporate bonds in transactions with customers.

FINRA found that in 165 municipal bond transactions, Morgan Stanley and Morgan Stanley Smith Barney, a joint venture of the firm and Citigroup, failed to purchase or sell bonds at prices reasonably related to fair market value.

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