Date:

February 16, 2021

Type of alert:

Fraud  

On December 30, 2020, the U.S. District Court for the Southern District of New York entered a final consent judgment against former Morgan Stanley broker Barry Connell who pleaded guilty to investment adviser fraud, embezzlement, wire fraud, bank fraud, and aggravated identity theft. Connell was previously associated with Morgan Stanley in Ridgewood, New Jersey from June 2009 to December 2016.

According to the Securities and Exchange Commission’s (SEC) complaint filed on February 3, 2017, Connell misappropriated millions of dollars from clients in more than 100 unauthorized transactions between December 2015 and November 2016. He operated the scheme primarily by creating internal forms that falsely represented that he had received verbal client authorization to execute the transactions, moving funds between certain client accounts, and issuing falsified third-party wire transfer forms and checks. Within this eleven-month period, Connell initiated more than $2 million in transfers between client accounts and approximately $5 million in unauthorized third-party payments in wire transfers and checks. The SEC asserts that Connell used his clients’ funds to fund his lavish lifestyle.

The final judgement enjoins Connell from violating Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 and orders him to pay $5,148,651.43 to disgorge the funds he misappropriated. Prior to this final judgment, Connell consented to a FINRA and SEC order that permanently barred him from association with any broker, dealer, investment adviser, or other entity related to securities business, as well as a participation in any penny stock offering.

Connell has numerous customer dispute disclosures on his FINRA BrokerCheck report that alleged removal or transfer of funds from customer accounts without authorization, unsuitable investments, and—most recently related to this regulatory action—misappropriation of customer funds. Settlements ranged from $45,000 to nearly $3.5 million.

If you lost money due to Barry Connell’s scheme, you may be able to recover from him or his associated brokerage firm at the time of the misconduct, Morgan Stanley. Since 1998, the experienced attorneys at ChapmanAlbin LLC have been fighting for victims of investment fraud and broker misconduct. Call us today at 1-877-410-8172 for a free consultation.

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