NEW YORK (CNN/Money) - The Securities and Exchange Commission is threatening to fine Morgan Stanley more than $10 million for failing to keep e-mails related to several cases the regulatory agency brought against the Wall Street firm, a newspaper reported Tuesday.

The fine would be one of the biggest penalties against a Wall Street brokerage firm for failing to preserve records, the Wall Street Journal reported, citing sources familiar with the matter.

No immediate comment on the report was available from Morgan Stanley or the SEC, Reuters reported.

Morgan Stanley (Research) told the SEC it was working to rectify its problems and pleaded for leniency, the newspaper report said, with the firm arguing that any transgressions happened when former CEO Philip Purcell was running the New York-based firm.

Purcell stepped down in June after a contentious shareholder campaign for his ouster.

The newspaper said the SEC has been building its case against Morgan Stanley for some time, adding that a decision on penalties could be months away.

The firm and regulators from the SEC and other agencies met last week in Washington to discuss the matter and are haggling over document-retention issues, the report said.

In January, the SEC told Morgan Stanley it could be facing a fine as high as $10 million. But at the meeting, the agency told Morgan Stanley executives that it had continued to uncover problems and the fine could go higher, the Journal said.

The firm believes the matter should be settled for less than $5 million, the report added.

Morgan Stanley stock fell about 0.7 percent in New York Stock Exchange trading Monday.