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March 12, 2020 at 01:12 PM
The Securities and Exchange Commission on Wednesday announced the entry of a final consent judgment against Elias Herbert Hafen, a former investment advisor at Morgan Stanley and Wells Fargo who was charged with misappropriating client funds. He is barred from the industry.
The SEC had filed a complaint Sept. 4, 2019, in U.S. District Court for the Southern District of New York in Manhattan, charging the Connecticut-based advisor with securities fraud for scamming his advisory clients out of more than $1.6 million by promoting a fraudulent investment opportunity.
Hafen had instructed his clients to withdraw their money, including liquidating stock holdings and personal retirement accounts, deposit that money into their personal bank accounts, and then transfer or wire the money to Hafen’s personal bank account, according to the SEC complaint. The SEC further alleged that, once Hafen received his clients’ money, he did not invest it as promised, but instead used it for his own personal purposes, including paying house, car and credit card expenses for himself and family members.
The court entered a final judgment against Hafen based upon his consent to resolve all claims, the SEC said Wednesday. The final judgment enjoins Hafen from violating the antifraud provisions of the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940, according to the SEC.
