A Morgan Stanley unit has agreed to pay $3.3 million in sanctions to resolve SEC charges over an improper fee arrangement. According to the SEC, the unit, Morgan Stanley Investment Management, charged a fund and its investors for advisory services they didn't receive. Morgan Stanley told the client, the Malaysia Fund, that it had contracted with an outfit in Malaysia to provide advice to benefit the fund, but the contractor never provided the purported services, the SEC said.   Investors were charged $1.845 million for the services over the decade the contracts were renewed, the SEC said. The SEC’s Asset Management Unit has an initiative inquiring into the investment advisory contract renewal process and fee arrangements in the fund industry. “We want to take the advisory fee setting process out of the shadows by scrutinizing the role of investment advisers and fund board members in vetting fee arrangements with registered funds,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. The Morgan Stanley unit neither admitted nor denied the charges, but agreed to repay the fund for the fees and pay a $1.5 million penalty. "The settlement fully resolves the SEC's investigation into MSIM," a company spokesman said. "We are pleased to put the matter behind us." Morgan Stanley terminated the sub-adviser in 2008, the spokesman added.  [SEC]