SEC Obtains Judgment Against Adviser Who Stole Millions from Clients
The Securities and Exchange Commission has obtained a final judgment against former Morgan Stanley Smith Barney broker, Barry F. Connell, who was previously charged with investment adviser fraud for stealing millions from his clients.
The Securities and Exchange Commission has obtained a final judgment against former Morgan Stanley Smith Barney broker, Barry F. Connell, who was previously charged with investment adviser fraud for stealing millions from his clients.
According to the SEC’s February 2017 complaint, Connell misappropriated more than $5 million from clients primarily by moving funds between certain client accounts and issuing falsified third-party wire transfer forms and checks. Over the course of approximately 11 months, he made more than 100 unauthorized transactions through the creation of internal forms falsely representing that he had received verbal client authorizations for the transactions.
In a parallel criminal action, the U.S. Attorney’s Office for the Southern District of New York filed criminal charges against Connell. He pled guilty to fraud charges and was sentenced to 36 months in prison and ordered to pay forfeiture and restitution.
In addition to being barred by the SEC, the final judgment found Connell liable for $5.2 million in disgorgement that was deemed satisfied by the restitution ordered against him in the parallel criminal action.
In July 2018, the SEC fined Morgan Stanley $3.6 million for failing to supervise Connell.
