The portfolio manager, Sheila Huang, agreed to be barred from the industry and pay a $125,000 penalty, according to the settlement between the SEC, Morgan Stanley and Huang.

“While we regret the actions of the former employee, we are pleased to have resolved this matter. We cooperated with the SEC throughout their investigation and took appropriate compensatory action with respect to clients harmed by the misconduct," a Morgan Stanley spokesman said in a statement.

(Reporting by Suzanne Barlyn; Editing by Dan Grebler)