Morgan Stanley’s James Polese Dealt Prison Sentence For Fraud

James Polese (CRD#: 2636427, Boston, Massachusetts), who is a prior Morgan Stanley investment advisor, is going to prison for committing fraud. Polese pleaded guilty to eight counts of felony bank fraud, one count of felony conspiracy, one count of investment adviser fraud, and one count of aggravated identify theft, pursuant to Criminal Matter #18-cr-10028, filed in the United States District Court for the District of Massachusetts by the United States Attorney’s Office for the District of Massachusetts. On November 27, 2018, the United States Senior District Court Judge Mark L. Wolf sentenced Polese to a five-year prison term and three years of supervised release. Judge Wolf also ordered Polese to pay $462,000.00 in restitution and pay a $30,000.00 fine.

James Polese To Be Imprisoned For 5 Years For Fraud

On January 31, 2018 – the same day that criminal charges were filed against Polese – the Securities and Exchange Commission (“SEC”) lodged Civil Matter #18-cv-10186 against him for defrauding his investor clients, stealing their money, and breaching fiduciary duties to them. Apparently, in 2014, Polese stole about $450,000.00 from a Morgan Stanley client who held accounts with the firm for years. Polese was alleged in the SEC’s Complaint to have misappropriated $350,000.00. The majority of those funds, estimated at $250,000.00, were directed to Polese’s bank account when they should have been used for the client’s investments.

The SEC claimed that Polese breached a fiduciary duty to Morgan Stanley clients by placing their funds at risk. Allegedly, Polese used the customer’s money as collateral so he could finance a private entity that he had a financial interest in. Polese also seemingly put the customer’s money in investments without disclosing conflicts of interest. Polese was then alleged to have taken a loan from a client on terms that were bad for the client. He also charged an advisory client fifty percent more on fees than he promised. Because of this, SEC claimed Polese violated the anti-fraud provisions of both the Securities Exchange Act and Investment Advisers Act. SEC’s Complaint is pending a resolution.

James Polese Barred From The Securities Industry By FINRA

The Financial industry Regulatory Authority (“FINRA”) also barred Polese on December 4, 2017. Apparently, FINRA requested information from Polese but Polese declined or otherwise ignored the request. FINRA was probably inquiring into why Morgan Stanley disaffiliated with Polese on June 26, 2017. After all, Morgan Stanley informed FINRA just a few months prior that it discharged Polese due to Polese allegedly misappropriating Morgan Stanley clients’ assets (the subject of the SEC and United States Attorney’s Office complaints).

Four customers have brought claims against Polese between May 26, 2017 and May 21, 2018. Those complaints all come from Morgan Stanley clients. Two of the complaints allege that Polese misrepresented managed account fees from 2015 to 2017. The third complaint alleged that Polese misappropriated the client’s funds, and the fourth claimed that Polese made unauthorized trades. At least two of the clients have been collectively paid $55,482.22 to settle the claims; the other two complaints are pending.

James Polese worked for Prudential Securities from 1995 to 2003; Wachovia Securities from 2003 to 2004; UBS Financial Services from 2004 to 2010; and Morgan Stanley from 2010 to 2017.

Lars Soreide Highest Ethical Standard Award 2018

Lars Soreide Highest Ethical Standard Award 2018

If you experienced losses from James Polese or another registered representative who has misrepresented investments, sold you unsuitable securities, or misused your investable assets, contact Soreide Law Group at (888) 760-6552 and speak with our qualified counsel about a possible recovery of your losses. Soreide Law Group represents clients nationwide and only charges a fee upon recovery of losses.