Morgan Stanley’s wealth business is under investigation by the Federal Reserve for how it vets potential customers who live abroad before taking them on, The Wall Street Journal reported Wednesday.

Regulators in 2020 found that the bank’s efforts toward client due diligence and money laundering prevention were lacking when it came to potential foreign wealth management clients, people familiar with the matter told the WSJ.

Following this discovery, which was made during an otherwise routine review, the Fed gave Morgan Stanley a list of issues to fix. A number of items on the list remained unfixed when the Fed checked back in 2021, and some also remained unfixed when the Fed returned in 2022.

Morgan Stanley’s wealth management chief, Andy Saperstein, has been meeting with the central bank to plan how his team will address issues found by the regulator, following private reproach by the Fed, the WSJ reported.

Saperstein had been one of three finalists in the race to succeed the bank’s outgoing CEO, James Gorman. The bank ultimately chose Ted Pick but gave Pick, Saperstein and fellow finalist Dan Simkowitz $20 million incentive packages to stay with Morgan Stanley beyond the leadership transition. Saperstein will remain a co-president of the bank and lead its asset management business in addition to his wealth management role.

Saperstein’s team has another 18 months before the plan to fix the problems at hand is complete, the WSJ reported.

Spokespeople for Morgan Stanley and the Fed both declined to comment to Banking Dive and other publications.

Morgan Stanley has been under separate investigation by the Justice Department, the Securities and Exchange Commission and other agencies since at least 2021 for how it handled funds tied to an alleged Venezuelan money-laundering scheme.

The agencies are investigating why Morgan Stanley managed approximately $100 million in investments for a businessman whose account was flagged for potential money laundering, the WSJ reported.