The Securities and Exchange Commission has obtained a final judgment of more than $5 million and barred a former Morgan Stanley advisor who previously pleaded guilty and served prison time for misappropriating client funds.
According to the SEC, Barry F. Connell, while employed with Morgan Stanley from about December 2015 through November 2016, misappropriated more than $5 million from investment advisory clients primarily by moving funds between certain client accounts and issuing more than $2 million in wire transfers and checks from the accounts to third parties for his benefit in more than 100 unauthorized transactions.
Connell, 54, of Chester, NJ, allegedly directed the funds to cover his personal expenses and fund his lavish lifestyle, the complaint said.
In a parallel criminal action, Connell pleaded guilty in December 2018 to Investment advisor fraud, embezzlement, wire fraud, bank fraud and aggravated identity theft before the United States District Court for the Southern District of New York. He was sentenced to a prison term of approximately 36 months and ordered to pay forfeiture and restitution.
The SEC’s final judgment enjoins Connell from violating the Investment Advisers Act of 1940 and finds him liable for disgorgement in the amount of $5,148,651. Additionally, Connell consented to the SEC’s order permanently barring him from association with any broker, dealer, investment advisor, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, as well as permanently barring him from participating in any penny stock offering.