SEC Fines Ex-Morgan Stanley Manager Over Bribery Charges

First Published Wednesday, 25th April 2012 10:01 pm - © 2012 Dow Jones


Dow Jones NEWSWIRES

A former managing director at Morgan Stanley (MS) agreed to pay more than $250,000 to settle U.S. allegations he bribed Chinese officials to advance his real-estate investments in Shanghai.

The U.S. Securities and Exchange Commission said Garth R. Peterson secretly bribed the chairman of Yongye Enterprise (Group) Co., a Chinese state-owned entity that influenced the success of Morgan Stanley's real estate business in Shanghai, while paying himself and the official $1.8 million for so-called finders fees in the process.

The civil charges settled Wednesday come in addition to an ongoing criminal case against Peterson brought by the U.S. Department of Justice.

A Morgan Stanley spokesman was not immediately available for comment. Contact information for Peterson was also not immediately available.

Morgan Stanley fired Peterson in 2008 after he allegedly violated the Foreign Corrupt Practices Act, a U.S. law that prohibits kickbacks to foreign officials. The banking giant later reorganized its Asian real-estate operations.

A Morgan Stanley compliance officer told Peterson in 2004 that employees of Yongye, a Chinese state-owned entity, are considered government officials under the U.S. law.

Peterson, under his deal with the agency, was also permanently barred from the securities industry and forced to relinquish his interest in Shanghai real estate, valued at about $3.4 million.

-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com

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