Massachusetts’ top securities regulator accused Morgan Stanley of paying bonuses to brokers to encourage them to push loans on their wealth-management clients.

A complaint filed Monday by the secretary of the commonwealth alleges that Morgan Stanley brokers in Massachusetts and Rhode Island promoted securities-backed loans, in which clients borrow against the value of their investment portfolios, to win an internal “sales contest” that rewarded them financially.

The complaint says the program tripled new loan originations and created a conflict of interest between the brokers and their clients. It alleges that Morgan Stanley played down the risks, including that the firm could liquidate their investments to repay the loans.

Read on.

Here is the complaint. Click here.