The SEC Has Filed An Enforcement Action Against Former Morgan Stanley Broker, Michael B. Carter, For Allegedly Stealing $6 Million In Client Assets
Michael Barry Carter (CRD # 3232017) is a former Financial Advisor at Morgan Stanely in McLean, VA. Michael Carter has been in the securities industry since 1999 and previously worked at Ameriprise, Merril Lynch, Financial Network Investment Corporation and Dean Witter Reynolds.On July 20, 2020, the Securities and Exchange Commission (SEC) filed a complaint in the United States District Court, District of Maryland, alleging that Michael Carter, while employed at Morgan Stanley, misappropriated $6 million in client assets. The complaint alleges “From approximately October 2007 through May 2019, Carter misappropriated approximately $6 million from brokerage customers and an elderly investment advisory client while he served as their financial advisor at a large financial institution registered with the Commission as broker-dealer and investment adviser (“Financial Institution A”). Of that sum, Carter misappropriated approximately $2.5 million in the last five years. Carter’s victims include people close to him who knew and trusted him through familial ties and friendship.” For the a copy of the complaint, click https://www.sec.gov/litigation/complaints/2020/comp-pr2020-158.pdf In addition, according to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in September 2019, FINRA barred Michael Carter from “acting as a broker or otherwise associating with a broker-dealer firm” for failing “to provide documents and information requested by FINRA during the course of an investigation initiated after FINRA received an external tip relating to allegations of misconduct that were ultimately contained in a Form U5 filed by his member firm.” This misconduct is alleged to have been related to the misappropriation, which gave rise to the SEC action.
For a copy of the FINRA sanction, click https://www.finra.org/sites/default/files/fda_documents/2019063523501%20Michael%20Barry%20Carter%20CRD%203232017%20AWC%20va.pdf.
In July 2019, Michael Carter was terminated from Morgan Stanley “after allegations he misappropriated client funds.”In the wake of the employment terminations, FINRA sanctions and now the SEC action, Michael Carter has been the subjuect of five customer complaints, alleging damages of more than $11 million. All of the disputes have been settled by Morgan Stanley, including settlements of $1.3 million, $3.19 million and $1.35 million.
For a copy of Michael Carter’s CRD, click https://brokercheck.finra.org/individual/summary/3232017.
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
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