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Morgan Stanley Capital Group Inc. Clean Air Act Settlement

(Washington, D.C. – December 14, 2017) - Morgan Stanley Capital Group Inc. (MSCG) has agreed to pay a civil penalty of $1,119,000 to resolve alleged violations of the Clean Air Act (CAA) stemming from the production of gasoline that did not did not meet fuel standards. 

Overview of Company

MSCG provides commodities trading services and operates as a subsidiary of Morgan Stanley. MSCG produced gasoline by blending components in leased tanks at terminals owned and operated by third parties. MSCG represented that, as of November 2015, it closed its fuel blending business.

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This settlement resolves claims related to MSCG’s production of approximately 97.3 million gallons of gasoline by blending previously certified gasoline (PCG) with blendstocks at the Kinder Morgan terminal in Pasadena, Texas in 2013 and 2014. The fuel MSCG produced did not meet the CAA reformulated gasoline volatile organic compound (VOC) emissions performance reduction standards that apply to gasoline produced by adding blendstocks to PCG. MSCG self-disclosed these violations to the EPA under the EPA’s Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations. 

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Environmental Benefits and Pollutant Reductions

In this case, non-compliance with the CAA fuel standards resulted in additional emissions of VOCs from the non-compliant gasoline. VOCs are a precursor to the formation of ground-level ozone. Ground-level ozone causes a wide variety of health and environmental impacts, including temporary breathing difficulty for people with asthma, respiratory illness, and aggravation of existing heart disease.

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Civil Penalty

MSCG will pay a $1,119,000 civil penalty to the United States. This amount represents the economic benefit MSCG derived from the alleged violations.

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Contact Information

Melissa Schefski, Attorney-Adviser
Air Enforcement Division
Office of Civil Enforcement
U. S. Environmental Protection Agency
1595 Wynkoop Street (8MSU)
Denver, CO 80202
(303) 312-6842

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