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Regulation and Compliance > Federal Regulation > SEC

Barred Broker Owes Morgan Stanley $6M

By Janet Levaux

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A regulatory panel has ruled that an ex-advisor must pay Morgan Stanley more than $6 million.

Barry Connell, who was barred from the industry a year ago, worked for Morgan Stanley from 2008 to 2016, when he was fired.

In early 2017, the Securities and Exchange Commission charged Connell with moving about $5 million from client accounts to third parties for his benefit. He has 13 other disclosures on his BrokerCheck record.

A Financial Industry Regulatory Authority panel said on Friday that Connell failed to appear at pre-hearing conferences in January and April and that “this matter would proceed without said respondent present.”

The arbitrators decided that documents submitted by Morgan Stanley were “sufficient to grant the relief requested in the absence of any responses by [Connell].”

Morgan Stanley declined to comment on the matter.

In November 2016, a settlement was reached for $3.5 million regarding allegations that Connell removed and/or transferred funds from client accounts without their authorization.

A pending claim again Connell from December 2017 says he misappropriated some $2.2 million in a client’s accounts from 2009 to 2014.

According to the SEC, Connell purportedly used money from client accounts to rent a home in suburban Las Vegas and pay for a country club membership and private jet service.

“As alleged in our complaint, Connell stole funds from clients who entrusted him their finances, choosing to fund his own lavish lifestyle rather than fulfill the fiduciary duty he owed them,” said Andrew M. Calamari, director of the SEC’s New York Regional Office, in a statement a year ago.

While the SEC conducted its investigation, the U.S. Attorney’s Office for the Southern District of New York filed criminal charges against Connell.

Janet Levaux

@Think_JanetL

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