Update: Morgan Stanley Advisor Cornelius Peterson – Fraud Charges
According to reports, Cornelius Peterson, 29, a former Morgan Stanley advisor, was sentenced to 20 months in prison on June 28 after he admitted that he misused client funds to invest in and support a wind farm project that a friend had decided to start.
Peterson along with his Morgan Stanley supervisor, James Polese, entered a guilty plea on fraud charges in January, after the pair was fired in June for allegations of misappropriating client funds.
Between 2014 and 2017, Peterson and Polese allegedly transferred $500,000 out of two client accounts without the clients’ knowledge or consent. Prosecutors allege that they used the money for a wind farm project, other investments and personal expenses.
According to the prosecutor, the brokers allegedly withdrew $100,000 from a client account in August 2014 to invest in the wind farm project without authorization by Morgan Stanley, and in May 2015 withdrew $400,000 from another client’s account to support a letter of credit for the project, prosecutors said.
According to FINRA Brokercheck, Peterson worked for Morgan Stanley since he began his career in the financial industry in 2011.
Peterson’s supervisor, James Polese, is scheduled to be sentenced in August. In addition to the prison sentence, Peterson must pay $462,000 in restitution jointly with Polese.
Failure to Supervise
Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
When brokers abuse client accounts and conduct transactions that violate securities laws, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.
If you have suffered losses investing with Cornelius Peterson or James Polese, the securities attorneys of The White Law Group may be able to help you. Please call 888-637-5510 for a free consultation with a securities attorney.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.
For more information on The White Law Group, visit www.WhiteSecuritiesLaw.com.