The Securities and Exchange Commission has entered a final judgment against James S. Polese, a Boston-based former adviser with Morgan Stanley, who was charged with misappropriating client funds. The agency also barred him from the securities industry.
The SEC's complaint, filed in January, 2018, charged Mr. Polese and his former colleague Cornelius Peterson with securities fraud for engaging in various schemes to defraud their clients. The complaint charged the two with misappropriating $350,000 of one client's money, using $100,000 of those funds to make investments in their own names, and directing the remaining $250,000 to Mr. Polese's personal bank account.
In the final judgment, Mr. Polese agreed to disgorge $307,300 in ill-gotten gains and pay prejudgment interest of $35,276. However, the monetary judgment was deemed satisfied by the $355,000 Mr. Polese paid in restitution in connection with a parallel criminal action brought by the U.S. Attorney's Office for the District of Massachusetts, in which Mr. Polese pleaded guilty to conspiracy, securities fraud, aggravated identity theft, and bank fraud. He was sentenced to 60 months in prison.