SEC Obtains Final Judgement Against Former Morgan Stanley Adviser Who Stole $6 Million
The Securities and Exchange Commission has obtained a final judgement against former Morgan Stanley advisor, Michael B. Carter, who stole more than $6 million from elderly and other investors.
The Securities and Exchange Commission has obtained a final judgement against former Morgan Stanley advisor, Michael B. Carter, who stole more than $6 million from elderly and other investors, primarily by making unauthorized cash wire transfers from their accounts.
In the parallel criminal case, Carter plead guilty to securities fraud and investment adviser fraud, was sentenced to 60 months in prison, and ordered to pay $4.4 million in restitution.
According to his BrokerCheck profile, Carter spent seven years with Morgan Stanley and was terminated in July 2019 following allegations that he misappropriated client funds. He was barred by FINRA shortly thereafter for failing to provide documents and information to the regulators during their investigation.
The SEC said that Carter falsified internal documents to effect dozens of unauthorized wire transfers totaling millions of dollars from customer accounts to his personal bank account. He was also accused of selling securities without customer authorization.
Carter used the money to support his lifestyle, including payments for a large home mortgage and a luxury car, and to fund cash withdrawal requests made by customers whose accounts he had previously depleted, the SEC said.
“For more than 12 years, Michael Carter perpetrated a brazen scheme that defrauded victim account holders at a global bank of their life savings…,” said acting U.S. Attorney Jonathan F. Lenzner. “This case reflects the reality that large-scale fraud can still occur at a global institution with a robust compliance program, and it also reflects our commitment to holding bad actors accountable in order to provide restitution to victims and restore confidence in our system.”
In the SEC’s civil case, Carter was enjoined from violating the antifraud provisions of various federal securities laws. He was ordered to pay more than $4.2 million in disgorgement and prejudgment interest, which was deemed satisfied by the restitution ordered against him in the parallel criminal action. He as permanently barred from the industry by the SEC.
