SecProbe.io

Mail Stop 3010
      May 4, 2010

VIA U.S. MAIL AND FAX (212) 507-3961

 Ruth Porat Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY  10036

Re: Morgan Stanley
Form 10-K for Fiscal Year Ended
  December 31, 2009   Filed February 26, 2010
Definitive Proxy Statement Filed April 12, 2010 Form 8-K Filed April 21, 2010
File No. 001-11758

Dear Ms. Porat:
We have reviewed your filing and have the following comments.  In our
comments, we may ask you to provide us w ith information so we may better understand
your disclosure.  After reviewing this inform ation, we may raise additional comments.
  Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our  comments or on any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Ruth Porat
Morgan Stanley May 4, 2010 Page 2   Form 10-K

 Item 7 Management’s Discussion and Analys is of Financial Condition and Results of
Operations
 General

1. We understand that you have entered into repurchase transactions accounted for
as collateralized financings.  To the exte nt there are significant variations between
the average level of these transacti ons and the amounts outstanding at each
quarter end, please explain to us why.  In  future periodic filings we believe the
inclusion of the information described a bove would be useful  to investors and
should be included.

Business Segments
 Global Wealth Management Group

 2009 Compared with Fiscal 2008

 Asset Management, Distribution a nd Administration Fees, page 56

2. We note your disclosure that beginning in  June 2009, fees related to the bank
deposit program are classified within  ‘Asset management, distribution and
administration fees’ prospectively.  Please te ll us the total fees generated from the
bank deposit program during 2009 and fiscal  year 2008.  Additionally, explain to
us how you determined it was not necessary  to reclassify prio r period amounts to
conform to your new presentation.

Other Matters
 Real Estate, page 66

3. Please tell us whether the company’s inve stments in consolidated real estate
subsidiaries are presente d net of non-controlling in terests in the company’s
consolidated financial statements.  To th e extent these investments are accounted
for on a gross basis, explain to us whethe r your presentation of consolidated real
estate assets in the schedule of real estate investments on page 67 represents a
non-GAAP measure in accordance with item  10(e) of Regulation S-K.  Please
provide the disclosures required by item 10( e) of Regulation S-K or explain to us
why these disclosures are not necessary.

Ruth Porat
Morgan Stanley May 4, 2010 Page 3   Liquidity and Capital Resources

 The Balance Sheet, page 74

4. We note your disclosure of Tier 1 levera ge ratios and Levera ge ratio.  Please
provide us with a discussion of the us es of these ratios beyond assessing
compliance with federal banking regula tors minimum guidelines.  In your
discussion, tell us the reasons for any si gnificant changes in these ratios from
period to period and the impact that these changes have had or are expected to
have on the company’s operations.  Consider  enhancing your disclosure in future
filings to include this discussion.

Liquidity Management Policies
 Liquidity Reserves, page 78

5. We note your disclosure of your liquidity re serves.  Please tell us and disclose in
future filings the following additional information concerning your liquidity reserve:
• total assets by type of investment;
• whether any portion of the assets have  been pledged as collateral by the
registrant on either a manda tory or voluntary basis;
• the ease with which the registrant could liquidate these assets; and
• any expected surplus or deficiency gene rated in your liquidity reserves after
meeting all funding and regulatory requi rements in a stressed environment.
 Item 8 Financial Statements and Supplementary Data

 Notes to Consolidated Financial Statements

 1. Introduction and Basis of Presentation

 Discontinued Operations, page 120

6. It appears that you have cl assified the results of your  Retail Asset Management
business as discontinued operations despite that fact that you will receive a 9.4%
ownership in the entity that will purchas e this business.  Explain to us how you
considered the guidance in paragraph 1 of ASC 205-20-45 in  determining the
appropriate classification of th e results of th is business.

Ruth Porat
Morgan Stanley May 4, 2010 Page 4   2. Summary of Significant Accounting Policies

Revenue Recognition
 Asset Management, Distribution a nd Administration Fees, page 122

7. To the extent your performance-based fees  are related to cont racts that do not
coincide with your fiscal year end, pl ease tell us how you have complied with
ASC 605-20-S99-1, or tell us why you believe  it was not necessary to disclose the
amount of revenue recognized that may be reversed in future periods if the fund
performance falls below the performance benchmark.
3. Morgan Stanley Smith Barney Holdings LLC

Smith Barney, page 131
8. Please tell us your basis in U.S. GAAP for recording a receivable of
approximately $1.1 billion related to the fa ir value of the Smith Barney delayed
contribution businesses, as well as presen ting the receivable as a reduction from
non-controlling interests.  Cite any releva nt accounting literature in your response.
9. Please tell us how you accounted for the ca ll and put rights related to Citi’s
interest in MSSB.  Please reference the authoritative accounting literature
management relied upon.
10. Please tell us how you determined  it was appropriate to use the fair value  of your
consideration transferred in your calculation of goodw ill, as it appears that you
retain control of the assets and liabilitie s transferred.  Please refer to paragraph 8
of ASC 805-30-30.
11. We note you have recorded a gain on the Morgan Stanley Smith Barney
transaction in your Consolidated Statements  of Changes in Total Equity.  Please
tell us the nature of this gain, and refe rence the authoritativ e accounting literature
management relied upon.

4. Fair Value Disclosures, page 135
12. Please provide us with further detail of  the investment line item by asset type
(private equity fund, real es tate funds, hedge funds, etc. ).  Additionally, tell us
whether the company has provided any gua rantees to these funds, has provided
voluntary financial assistance to these funds  or expects to provide any additional
financial support to these f unds on a voluntary basis.

Ruth Porat
Morgan Stanley May 4, 2010 Page 5   13. Tell us whether the company acts solely as fund manager for any off balance
sheet private equity or real estate funds.   To the extent the company has engaged
in this business, tell us the current financ ial status of these funds and whether the
company expects to provide any financia l support to these funds on a voluntary
basis.
14. We note that the company recorded approxi mately $4.3 billion in losses to level 3
net derivative and other cont racts and $1.4 billion in losses to level 3 investments.
Please describe for us in detail the cha nges in circumstances and assumptions that
led to recording these losses in the cu rrent period, any signi ficant changes in
assumptions or valuation methodology from the previous period, and the
performance of these assets subsequent to year end.
15. With respect to those commercial and residential loans the company has
originated, explain to us how your credit review pro cess factored into your
original decision to extend, and the subsequent valuation of the loans.  In your
response, provide us with sufficient detail  of the credit review process, and the
degree to which the credit quality of the bo rrowers of these loans is used as an
assumption in determining fair value.  Fi nally, clarify for us where these loans are
classified within the fair value hierarc hy, or if they are classified elsewhere on
your Consolidated Statements  of Financia l Condition.
15. Interest and Dividends and Interest Expense, page 198

16. We note your net ‘other’ intere st expense item has a nega tive balance as of year
end.  Please tell us the composition of th is item, and your basis in U.S. GAAP for
classifying any revenue net with in this expense line item.
Definitive Proxy Statement filed April 12, 2010
Consideration of Risk Matters in  Determining Compensation, page 17
17. We are aware of the Federal Reserve’ s “horizontal review” of compensation
practices at large, complex banking organi zations.  Taking into consideration any
discussions you have had with other regul ators, please confirm that you continue
to believe that risks arising from you r compensation policies and practices for
employees are not reasonably likely to have a material adverse effect on you.

Ruth Porat
Morgan Stanley May 4, 2010 Page 6   Form 8-K Filed April 21, 2010

General
18. Please tell us how you accounted for your i nvestment in Revel prior to the first
quarter 2010.  In your response, te ll us whether you accounted for your
investment as an equity method investme nt in a real estate partnership or a
consolidated real esta te asset.  In addition, explain to us whether this investment
was carried at fair value or historical cost basis prior to the company’s decision to
sell.  To the extent the investment was car ried at cost basis, explain to us the
company’s policy for periodical ly testing the investment for impairment.  To the
extent the investment was carried at fair value, tell us the significant assumptions
used in determining the fair value as of December 31, 2009, and how these
assumptions changed during the first quarter 2010.
19. We understand from news reports that the company held a 94.5% equity
investment in Revel that it was attempting to reduce by selling equity interests to
others.  Please clarify whether this wa s the case.  If so, tell us when the
investment was made and when the co mpany began attempting to reduce its
ownership interest.  In addition, tell us the level of success the company had with
those efforts and when the company first realized difficulties in selling the interests.  Your response should also di scuss the timing of the downturn in the
Atlantic City market and how that downturn  affected the company’s efforts to sell
the interests in Revel to others.  Finally, tell us why these adverse market developments did not lead to impair ment recognition prior to March 31, 2010.
20. In light of the impairment charge reco rded for Revel during the quarterly period
ended March 31, 2010, please tell us what c onsideration you gave to disclosing a
potential impairment within the Mana gement’s Discussion and Analysis of
Financial Condition and Results of Opera tions of your Form 10-K for the year
ended December 31, 2009.

*    *    *    *

Ruth Porat
Morgan Stanley May 4, 2010 Page 7
Please respond to our comments within 10 business days or tell us when you will
provide us with a response.  Please s ubmit your response letter on EDGAR.  Please
understand that we may have additional comm ents after reviewing your response to our
comments.

 We urge all persons who are responsible  for the accuracy and adequacy of the
disclosure in the filings reviewed by the sta ff to be certain that they have provided all
information investors require for an info rmed decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
  In connection with responding to our comments, please provide, in writing, a
statement from the company acknowledging that:
• the company is responsible for the adequacy  and accuracy of the disclosure in the
filings;

• staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filings; and

• the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filings or in response to our comments on your filings.
You may contact Jennifer M onick, Senior Staff Account ant, at (202) 551-3295, or
the undersigned at (202) 551-3438 if you have questions.

         S i n c e r e l y ,
Robert Telewicz   Senior Staff Accountant