SEC Alleges Michael Carter Falsified 60 Internal Forms to Transfer Funds From Brokerage Customers to His Personal Bank Account
Knoxville, TN resident and former McLean, VA Morgan Stanley broker Michael Barry Carter, aka Mike Carter, is currently the defendant in a recent case filed by Securities and Exchange Commission under review by broker misconduct lawyer Alan Rosca and his colleagues at Rosca Scarlato. The Commission alleges that Michael Carter misappropriated approximately $6 M in client funds by effecting 60 unauthorized cash wire transfers, and used those money to support his lifestyle. Broker misconduct lawyers at Rosca Scarlato often seek compensation for investors who lost money as a result of conversion of customer funds or broker theft, and are currently evaluating recovery options for customers who believe they lost money as a result of Michael Carter’s alleged misappropriation of customer funds. Michael Carter investors are encouraged to contact Alan Rosca or his colleagues Paul Scarlato and Chris Pfeiffer for a free, no-obligation discussion about potential recovery options. Call 888-998-0530 or email arosca@rscounsel.law to learn more.
Michael Carter Pleads Guilty to Wire Fraud and Investment Advisor Fraud
According to a July 20, 2020 press release by U.S. Attorney’s Office for the District of Maryland, financial advisor Michael Carter pleaded guilty to perpetrating a scheme to steal more than $6 million from his clients. Carter’s guilty plea, under the review by broker misconduct lawyer Alan Rosca, reveals that between 2007 and 2019, Carter made numerous unauthorized transactions from the victim accounts by submitting falsifying internal bank authorization forms to represent that Carter had obtained verbal instructions from clients.
“For over 12 years, Michael Carter perpetrated a brazen scheme that defrauded victim account holders whose investments he was supposed to protect,”
said U.S. Attorney Robert K. Hur.
Allegedly, Michael Carter’s fraud was discovered when one of the victims attempted to obtain a loan only to find out that a $800,000 loan was already obtained in his victims’ name, U.S. Attorney’s Office for the District of Maryland reports. After Carter was fired, a few days later he admitted to defrauding five victims, forging clients’ signatures, and fabricating financial statements.
Michael Carter Victim Alert: Former Morgan Stanley Broker Agrees to Repay Over $4.3 Million
The July 20, 2020 press release, under the review by broker misconduct attorney Alan Rosca, reports that Michael Carter stole at least $6,149,162.77. Allegedly, Carter managed to return close to $1.8 m to his victims, but according to USDA’s Office, of the total amount repaid $1.1 m was obtained from making transfers from other victim accounts. The alleged net proceeds obtained by Carter are $4,355,110.39, which Carter agreed to pay. He also faces up to 20 years in federal prison for wire fraud and up to five years in federal prison for investment adviser fraud. The sentencing is currently scheduled for November 9, 2020.
Morgan Stanley Terminated Carter’s Employment After Allegations of Client Funds Misappropriation
According to his FINRA Brokercheck Report, Michael Barry Carter was registered with Morgan Stanley in McLean, VA between late December 2011 and August 2019. On July 20, 2019, Morgan Stanley terminated his employment after the firm learned about the allegations that Carter misappropriated funds from his clients. Prior to his Morgan Stanley registration, Carter was employed by Ameriprise Financial Services for a short period between April and June 2011. Before that, Mike Carter was a broker with Morgan Stanley Smith Barney for almost two years between June 2009 and May 2011. Michael Carter was also registered with Morgan Stanley & Co Incorporated between April 2007 and June 2009. Other brokerage firms in Carter’s employment history are Merrill Lynch, Pierce, Fenner & Smith Incorporated, Financial Network Investment Corporation, and Dean Witter Reynolds Inc.
Michael Carter Barred by FINRA and Facing Pending Customer Dispute
In September 2019, Michael Carter submitted a Letter of Acceptance, Waiver and Consent (AWC) through which he agreed to being barred from associating with any FINRA member firm in any capacity. The bar followed Carter’s failure to provide documents and information requested by FINRA after it learned about the allegations that Carter misappropriated customer funds. The allegations of misappropriation of customer funds are also included in the latest customer dispute filed against Michael Carter in June 2020. Carter’s clients also allege that shares of stock were sold without authorization. The alleged damages amount to $73,458 and as of the date of this article, the complaint shows as pending.
Michael Carter Has Four Settled Customer Disputes Disclosed in 2019
On November 15, 2019, a customer complaint was filed alleging misappropriation of client funds. The customer requested over $6 m in damages, including punitive damages, as shown in Carter’s Brokercheck Report. The customer dispute was settled in February 2020 for $1.3 million. In October 2019, a customer filed a dispute requesting $4 million in alleged damages. The product type involved was “non-broker-dealer affiliate product”. The customer dispute was settled for a total of $3,193,500.00. On September 12, 2019, a customer filed a dispute alleging that the client was unaware of withdrawals in the account. The dispute settled for a total of $676,174.01. A few days prior, a customer’s POA alleged verbally that a Liquidity Access Line was opened without authorization and that certain withdrawals were unauthorized. This dispute was settled for $1,357,841.68. Finally, it is important to note that, as of the date of this article, there has not been a finding of liability as to the complaints or allegations mentioned in this article, unless otherwise indicated. Any reader should also read the original sources hyperlinked in this blog for accuracy, including any BrokerCheck report and/or record of any disciplinary or regulatory action. Those sources are incorporated by reference into the text of this blog, and are the governing materials in case of any inconsistencies or typos in this blog.
What Michael Carter Investors Can Do
Securities lawyers at Rosca Scarlato LLC have extensive experience in fighting for recovering losses on behalf of broker misconduct victims. Investor rights advocate Alan Rosca is currently investigating the allegations involving Michael Carter, and together with his colleagues is preparing to take action and seek compensation for harmed investors. Michael Carter investors are encouraged to contact Rosca Scarlato for an evaluation of their case, to learn about their rights, or to provide useful information. All consultations are free. The Rosca Scarlato attorneys typically take cases like this on a contingency fee basis, and only get paid for their fees and expenses if and when they recover money for their clients. If there is no recovery, no fees or expenses are charged. Investors who are concerned they may have lost money as a result of alleged misappropriation of funds involving Michael Carter, may contact attorney Alan Rosca or his colleagues at 888-998-0530, via email at arosca@rscounsel.law, or through the contact form on this webpage.
