[ Breaking News ] SEC charges former Morgan exec.

[pappy]

From the SEC

Quote:SEC Charges Former Morgan Stanley Executive with FCPA Violations and Investment Adviser Fraud

FOR IMMEDIATE RELEASE
2012-78

Washington, D.C., April 25, 2012 — The Securities and Exchange Commission today charged a former executive at Morgan Stanley with violating the Foreign Corrupt Practices Act (FCPA) as well as securities laws for investment advisers by secretly acquiring millions of dollars worth of real estate investments for himself and an influential Chinese official who in turn steered business to Morgan Stanley’s funds.


SEC Charges Former Morgan Stanley Executive with FCPA Violations and Investment Adviser Fraud

FOR IMMEDIATE RELEASE
2012-78

Washington, D.C., April 25, 2012 — The Securities and Exchange Commission today charged a former executive at Morgan Stanley with violating the Foreign Corrupt Practices Act (FCPA) as well as securities laws for investment advisers by secretly acquiring millions of dollars worth of real estate investments for himself and an influential Chinese official who in turn steered business to Morgan Stanley’s funds.
Additional Materials

SEC Complaint

The SEC alleges that Garth R. Peterson, who was a managing director in Morgan Stanley’s real estate investment and fund advisory business, had a personal friendship and secret business relationship with the former Chairman of Yongye Enterprise (Group) Co. – a Chinese state-owned entity with influence over the success of Morgan Stanley’s real estate business in Shanghai. Peterson secretly arranged to have at least $1.8 million paid to himself and the Chinese official that he disguised as finder’s fees that Morgan Stanley’s funds owed to third parties. Peterson also secretly arranged for him, the Chinese official, and an attorney to acquire a valuable Shanghai real estate interest from a Morgan Stanley fund. Peterson was acquiring an interest from the fund but negotiated both sides of the transaction. In exchange for offers and payments from Peterson, the Chinese official helped Peterson and Morgan Stanley obtain business while personally benefitting from some of these same investments. Peterson’s deception, self-dealing, and misappropriation breached the fiduciary duties he owed to Morgan Stanley’s funds as their representative.

[jaxx]

Wow, good job ferreting that out. I hope there will be more charged.

[pappy]

(04-25-2012 07:52 PM)jaxx Wrote:  Wow, good job ferreting that out. I hope there will be more charged.

No ferreting involved. The SEC (believe it or not) Tweets.

This is the first one I've managed to see while online so it was just good fortune to find out the SEC Tweets and that I was online to see this one.

[Brainwreck]

I hope it is just a beginning. I would be great to see the jails filled with some of those cheating executives for a change.

[pappy]

(04-25-2012 08:41 PM)Brainwreck Wrote:  I hope it is just a beginning. I would be great to see the jails filled with some of those cheating executives for a change.

This guy may be the foot in the door at Morgan Stanley. The lawyers for the SEC and Peterson have obviously been talking for sometime prior to this announcement which also contained a plea agreement. From the report;

Quote:Peterson agreed to a settlement of the SEC’s charges in which he will be permanently barred from the securities industry, pay more than $250,000 in disgorgement, and relinquish his interest in the valuable Shanghai real estate (currently valued at approximately $3.4 million) that he secretly acquired through his misconduct. The U.S. Department of Justice has filed a related criminal case against Peterson.

Notice no mention of jail time and the seeming "throw away" comment of a related DOJ criminal case.

I smell cooperation in the air with the investigators in exchange for lenient sentencing for Peterson.