Ex-Morgan Stanley broker sentenced to 5 years over $6 million fraud

Rick Steves

U.S. District Judge Paul W. Grimm ordered Mr. Carter to pay $4,355,110.39 as he had already returned $1,794,052.38 to the victims even before being discovered.


Michael Barry Carter, a 47-year-old former financial advisor at Morgan Stanley, was sentenced to five years in federal prison, followed by three years of supervised release.

He was found guilty of wire fraud and investment adviser fraud related to a scheme to steal more than $6 million.
U.S. District Judge Paul W. Grimm ordered Mr. Carter to pay $4,355,110.39 as he had already returned $1,794,052.38 to the victims even before being discovered.

Acting U.S. Attorney Jonathan F. Lenzner said: “For more than 12 years, Michael Carter perpetrated a brazen scheme that defrauded victim account holders at a global bank of their life savings. When his fraud was discovered, Carter repaid some victims by stealing money from other victim accounts, and ultimately he stole close to $5 million.

“This case reflects the reality that large-scale fraud can still occur at a global institution with a robust compliance program, and it also reflects our commitment to holding bad actors accountable in order to provide restitution to victims and restore confidence in our system.

“The U.S. Attorney’s Office will continue to work closely with our federal law enforcement partners and the Securities and Exchange Commission to hold accountable financial advisors who defraud victims whose investments they are supposed to protect”, said Mr. Lenzner.

In July 2020, Mr. Carter pled guilty of making numerous unauthorized transactions from the victim accounts for his personal benefit, defrauding five customers of at least $5 million. The fraud lasted from at least October 2007 to at least July 2019, according to the statement of facts.

To go through with the wire fraud at Morgan Stanley, Mr. Carter submitted an internal bank authorization form that falsely stated that he had received verbal client instructions from each victim authorizing the transfer.

The transfers would then be sent to his personal accounts and the money was used to pay for his lifestyle expenses, including Carter’s mortgage, credit card bills, and country club membership fees.

The fraud was first discovered when one victim and her adult daughter attempted to obtain a loan from the bank only to find out that an $800,000 loan had already been obtained in the victim’s name without the victim’s knowledge.

Morgan Stanley then found the loan proceeds went to Mr. Carter’s personal bank account. Later, the bank discovered he had transferred approximately $5 million in unauthorized funds associated with clients of the financial institution, which then fired the fraudster.

According to the plea agreement, Mr. Carter made at least 53 unauthorized transfers from his clients’ accounts to his own accounts during the course of the scheme.

Read this next

Digital Assets

Bitcoin hits fresh record high amid massive short squeeze

Bitcoin has surged to record highs against both the euro and the pound, hitting €60,447 and £51,736 respectively on Coinbase. The primary cryptocurrency has seen an almost 7% increase in the past 24 hours.

Digital Assets

US court rules crypto trades as securities in Coinbase case

A US court ruled that trading crypto assets on platforms like Coinbase constitutes securities transactions.

Market News

Weekly Data: Oil and Gold: Brief Review before the NFP

This preview of weekly data looks at USOIL and XAUUSD where economic data coming up later this week are the main market drivers for the near short-term outlook.

Institutional FX

FXSpotStream reports lower volumes for February 2024

FXSpotStream’s trading venue, the aggregator service of LiquidityMatch LLC, reported its operational metrics for February 2024, which moved lower on a monthly basis.

Fundamental Analysis

Global FX Market Summary: EUR, USD, Gold March 4th,2024

US Dollar Weakness: The US Dollar (USD) is currently struggling to gain strength due to a combination of factors.

Technical Analysis

Bitcoin Technical Analysis Report 4 March, 2024

Bitcoin cryptocurrency can be expected to rise further toward the next resistance level 69000.00 (former multiyear high from January)


Finding Opportunity in Challenge: Why New Regulations Offer a Chance For Business to Get on Top of Data Management

The combination of CESOP, PSD3 and the PSR, has put businesses under new pressures. In this engaging article, André Casterman, Senior Advisor at Intix provides invaluable guidance on how companies can stay ahead of the curve.

Institutional FX

Finalto launches Prime of Prime offering on LSEG’s FX Matching venue

“By combining our expertise in Prime of Prime services with LSEG’s robust trading platform, we aim to empower clients with the tools and resources needed to navigate the FX market with confidence.”

Digital Assets

Tether’s USDT stablecoin nears 100 billion in circulating supply

USDT, the world’s largest stablecoin, has reached close to 100 billion in circulating supply, currently sitting at around 99.5 billion. Its market capitalization, which reached over $100 billion at one point, is calculated by multiplying the supply by the price.