FINRA levied a $5 million fine against Morgan Stanley on Tuesday for alleged supervisory failures stemming from the sale of shares in over 80 initial public offerings, including Facebook and Yelp!.

According to FINRA, Morgan Stanley Smith Barney failed to provide its sales staff with adequate training, leading to its employees selling shares in 83 IPOs without distinguishing between "indications of interest" and "conditional offers" in the solicitation information provided to clients. Over 68,000 customers invested in the largest offering, according to FINRA.

“Indications of interest" and "conditional offers" have different requirements, according to FINRA’s letter. Sales staff are required to reconfirm indications of interest after the effectiveness of the registration order for the sale contract to become binding. But a conditional offer becomes binding once it is accepted unless revoked.  

Starting in February 2012, FINRA claims the firm put new policies in place in an effort to reconcile the different procedures followed Morgan Stanley and Citigroup Inc., which had created Morgan Stanley Smith Barney in a 2009 merger. The policies at issue allegedly used the terms "indications of interest" and "conditional offers" interchangeably. As a result of this approach, both the firm’s sales staff and customers may not have completely understood what type of commitment was being solicited, according to the regulator.

Morgan Stanley also allegedly failed to adequately monitor employees’ compliance and failed to enforce procedures that ensured conditional offers were being properly solicited.

"Customers must understand when they are entering a contract to buy shares in an IPO. This starts with the firm's duty to establish clear procedural guidelines for soliciting conditional offers to buy and to educate its sales force regarding this type of solicitation,” FINRA’s executive vice president and chief of enforcement, Brad Bennett, said in a statement Tuesday.

Morgan Stanley settled FINRA’s allegations Tuesday without admitting or denying the charges, but consented to the agency’s findings. "Morgan Stanley Wealth Management is committed to offering our clients participation in initial public offerings in accordance with applicable FINRA rules and we have enhanced our practices on this point," firm spokeswoman Christine Jockle said in a statement.