WASHINGTON, April 26 — A former Morgan Stanley executive settled with US securities regulators in connection with real estate investments in China and prosecutors have filed a related criminal case, the Securities and Exchange Commission said yesterday.
Garth Peterson, who was a managing director in Morgan Stanley’s real estate investment and fund advisory business, secretly acquired millions of dollars worth of real estate investments for himself and an influential Chinese official, the SEC said.
Peterson had a plea hearing before a federal judge in Brooklyn slated for later yesterday in the criminal case, however details were not immediately available.
The SEC charged Peterson with violating the Foreign Corrupt Practices Act, which bars bribes to officials of foreign governments, and with violating securities laws for investment advisers.
Peterson had a personal friendship with the former chairman of a Chinese state-owned entity, Yongye Enterprise (Group) Co, which had influence over the success of Morgan Stanley’s real estate business in Shanghai, the SEC said.
Peterson secretly arranged to have some US$1.8 million (RM5.4 million) paid to himself and the chairman, and disguised the money as finder’s fees that Morgan Stanley’s funds owed to third parties.
The SEC said Peterson agreed to settle the charges and give up US$250,000 in unlawful profits. Peterson also agreed to relinquish his interest in US$3.4 million of Shanghai real estate, and to a permanent bar from the securities industry.
A Morgan Stanley spokesman declined to comment. An attorney for Peterson did not immediately respond to a request for comment. — Reuters