* SEC charges Garth Peterson with FCPA violations
* Also charges Peterson with investment adviser fraud
* Peterson faces parallel criminal case
* Peterson settles SEC charges
WASHINGTON, April 25 (Reuters) – A former Morgan Stanley
executive settled with U.S. securities regulators in
connection with real estate investments in China and prosecutors
have filed a related criminal case, the Securities and Exchange
Commission said on Wednesday.
Garth Peterson, who was a managing director in Morgan
Stanley’s real estate investment and fund advisory business,
secretly acquired millions of dollars worth of real estate
investments for himself and an influential Chinese official, the
SEC said.
Peterson had a plea hearing before a federal judge in
Brooklyn slated for later on Wednesday in the criminal case,
however details were not immediately available.
The SEC charged Peterson with violating the Foreign Corrupt
Practices Act, which bars bribes to officials of foreign
governments, and with violating securities laws for investment
advisers.
Peterson had a personal friendship with the former chairman
of a Chinese state-owned entity, Yongye Enterprise (Group) Co,
which had influence over the success of Morgan Stanley’s real
estate business in Shanghai, the SEC said.
Peterson secretly arranged to have some $1.8 million paid to
himself and the chairman, and disguised the money as finder’s
fees that Morgan Stanley’s funds owed to third parties.
The SEC said Peterson agreed to settle the charges and give
up $250,000 in unlawful profits. Peterson also agreed to
relinquish his interest in $3.4 million of Shanghai real estate,
and to a permanent bar from the securities industry.
A Morgan Stanley spokesman declined to comment. An attorney
for Peterson did not immediately respond to a request for
comment.
