Michael Barry Carter (also known as Mike Carter) of McClean Virginia a stockbroker formerly registered with Morgan Stanley has been fined $220,000.00 and barred by the State of Maryland from being a stockbroker or investment adviser representative supported by allegations that he defrauded investors. Case No. 2019-0176 (Dec. 15, 2020).
According to the Consent Order, Carter was accused of misappropriating millions from his customers. Their funds were allegedly used for Carter’s own benefit. The State of Maryland also alleges that omissions and misrepresentations had been made by the stockbroker so that customers would be unaware of his activities. He allegedly falsified account statements that he furnished to customers.
This is not the first time that Carter has been sanctioned by a securities regulator. He has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based on findings that he neglected to provide information and documents to FINRA during the period that he was under investigation for allegedly misappropriating funds from his customers. Letter of Acceptance Waiver and Consent No. 2019063523501 (Sept. 9, 2019). Carter violated FINRA Rules 2010 and 8210.
Carter has also been charged by Securities and Exchange Commission (SEC) with misappropriating funds from customers between October of 2007 and May of 2019. SEC v. Michael Barry Carter Complaint No. 20 Civ. 2112 (July 20, 2020). According to the Complaint, approximately $6,000,000.00 in investor funds had been misused by Carter during the time that he was a stockbroker and investment adviser representative. SEC indicates that the victims of Carter’s misappropriation knew who he was and had trusted him.
The Complaint alleges that Carter initiated as many as 60 unauthorized transfers from customers’ accounts into a bank account that he held at another financial institution. False accounts statements were allegedly provided to investors by the stockbroker which allowed him to conceal his fraudulent actions.
The regulator also alleges that misrepresentations had been made to customers, and that Carter diverted correspondence so that they would not know about transactions. The Complaint alleges that he used victims’ money to pay for luxurious items among other things. The stockbroker is accused of violating Securities Exchange Act of 1934, SEC Rule 10b-5 and Investment Advisers Act of 1940 Section 206(1) and 206(2).
FINRA Public Disclosure reveals that Carter has been identified in five customer initiated investment related disputes regarding accusations of his misconduct while registered with securities broker dealers including Morgan Stanley Smith Barney. On September 3, 2019, a customer initiated investment related complaint concerning Carter’s conduct was resolved for $1,357,841.68 in damages based upon allegations that between December of 2017 and May of 2019, unauthorized transactions were executed by the stockbroker and that a Liquidity Access Line had been opened without the customer’s consent.
Carter is also the subject of a customer initiated investment related written complaint which was settled for $676,174.01 on September 12, 2019 supported by accusations that from June of 2015 and September of 2017, withdrawals were made by Carter without their consent during the period that he was associated with Morgan Stanley Smith Barney.
On October 18, 2019, another customer initiated investment related complaint regarding Carter’s conduct was resolved for $3,193,500.00 in damages founded on allegations that the customer did not permit him to effect withdrawals from their Morgan Stanley Smith Barney account. Carter is additionally referenced in a customer initiated investment related written complaint which was settled for $1,300,000.00 on February 28, 2020 based upon accusations of the customer’s funds being misappropriated by Carter between October 1, 2012 and July 31, 2019 during which time he was the customer’s financial advisor at Morgan Stanley Smith Barney.
On June 26, 2020, another customer initiated investment related complaint involving Carter’s conduct was resolved for $16,731.00 in damages supported by allegations that Carter misappropriated the customer’s assets. The complaint alleges that stocks were improperly sold from the Morgan Stanley customer’s account between 2015 and 2016.
Carter was registered with Morgan Stanley between December 22, 2011 and July 30, 2019. He was discharged founded on accusations of misappropriation.
