Morgan Stanley was fined $280,000 for ignoring “numerous red flags” in opening an account tied to a multimillion-dollar Ponzi scheme, a U.S. regulator said.

The bank’s Smith Barney unit was cited for improper supervision and records violations, the Commodity Futures Trading Commission said yesterday in a statement. The New York-based company also failed to enforce trading limits it assigned to the account and adequately respond to regulators’ requests for documents, the CFTC said.

The accounts were used by Benjamin Wilson, the owner of SureInvestment, to continue a $35 million Ponzi scheme based in the U.K., according to the statement. Wilson was sentenced to seven years in prison this year after pleading guilty to charges brought by that country’s Financial Conduct Authority, the CFTC said.

Morgan Stanley ignored “warning signs” even as the account should have received special scrutiny because two SureInvestment entities were based in the British Virgin Islands.

The warning signs included documents that showed SureInvestment had returns of 2,850 percent from 2003 to 2009 and 45 consecutive profitable months, according to the CFTC’s order. SureInvestment also submitted an audit that included numerous typographical errors, the regulator said.

‘Fully Cooperated’

“A simple Internet search would have revealed that neither the SureInvestment entity that was the subject of the audits nor the purported B.V.I. auditing firm and its principals actually existed,” the CFTC said in the order.

Morgan Stanley didn’t admit or deny the charges, while consenting to the entry of the CFTC’s findings.

“Morgan Stanley takes its regulatory responsibilities seriously,” Christine Jockle, a company spokeswoman, said in an e-mailed statement. “The firm fully cooperated with the CFTC’s investigation. The events described in the settlement involve a single account that traded for less than three months. CFTC did not conclude that the firm’s conduct in this matter was willful, intentional or fraudulent.”