SEC.gov | Garth R. Peterson
!function(){var e=navigator.userAgent,a=document.documentElement,n=a.className;n=n.replace("no-js","js"),/iPad|iPhone|iPod/.test(e)&&!window.MSStream&&(n+=" ua-ios"),a.className=n}();
{"path":{"baseUrl":"\/","pathPrefix":"","currentPath":"node\/512271","currentPathIsAdmin":false,"isFront":false,"currentLanguage":"en"},"pluralDelimiter":"\u0003","suppressDeprecationErrors":true,"gtag":{"tagId":"","consentMode":false,"otherIds":[],"events":[],"additionalConfigInfo":[]},"ajaxPageState":{"libraries":"eJxdT0GOwzAI_JBdn_oei2DkeINNZLC22devlaZS2wtiBhhmcKNUTPo97jxyaXEH3GJpiZrFhQW38A4cMqgeYQGlV19JFTKpQ-kUmvQKXP7I0cO4tC2kPnbg2wVdFslM0SCHPMs3vsEPPD7J6hgOGdPCKJyoRxxqUuePHjLLAuzVjimenRJGSLW08NoBK9LUn6SHlrytVOlcpJShB63QLSpBx_WkOzHNePol4fRQo_qMPvQ36ZXsAmd99lMNr2t_GUR9n60EyX9a_wePd5ns","theme":"uswds_sec","theme_token":null},"ajaxTrustedUrl":[],"gtm":{"tagId":null,"settings":{"data_layer":"dataLayer","include_classes":false,"allowlist_classes":"","blocklist_classes":"","include_environment":false,"environment_id":"","environment_token":""},"tagIds":["GTM-TD3BKV"]},"data":{"extlink":{"extTarget":false,"extTargetAppendNewWindowDisplay":true,"extTargetAppendNewWindowLabel":"(opens in a new window)","extTargetNoOverride":false,"extNofollow":false,"extTitleNoOverride":false,"extNoreferrer":false,"extFollowNoOverride":false,"extClass":"0","extLabel":"(link is external)","extImgClass":false,"extSubdomains":true,"extExclude":".*\\.gov|http:\/\/www.xbrl.org\/utr\/2013-05-17\/utr.xml|http:\/\/www.xbrl.org\/dtr\/type\/numeric-2009-12-16.xsd|http:\/\/www.xbrl.org\/dtr\/type\/nonNumeric-2009-12-16.xsd|https:\/\/secir.secure.force.com\/ombudsman\/OMMSForm","extInclude":"","extCssExclude":".data-exempt","extCssInclude":"","extCssExplicit":"","extAlert":true,"extAlertText":"You are now leaving the SEC Website. The link you have selected is located on another server. Please click on the OK button below to proceed to the selected site. The SEC does not endorse this web site, its sponsor, or any of the policies, activities, products, or services offered on the site or by any advertiser on the site.","extHideIcons":false,"mailtoClass":"0","telClass":"","mailtoLabel":"(link sends email)","telLabel":"(link is a phone number)","extUseFontAwesome":false,"extIconPlacement":"append","extPreventOrphan":false,"extFaLinkClasses":"fa fa-external-link","extFaMailtoClasses":"fa fa-envelope-o","extAdditionalLinkClasses":"","extAdditionalMailtoClasses":"","extAdditionalTelClasses":"","extFaTelClasses":"fa fa-phone","allowedDomains":null,"extExcludeNoreferrer":""}},"field_group":{"html_element":{"mode":"default","context":"view","settings":{"classes":"rightrail-list","show_empty_fields":false,"id":"","element":"div","show_label":true,"label_element":"h2","label_element_classes":"","attributes":"","effect":"none","speed":"fast"}}},"user":{"uid":0,"permissionsHash":"e506dfd1572f94bd1f339f1a7483bfbded31d4a9d2bdfdca3fdbc235153380ee"}}
Skip to search field
Skip to main content
An official website of the United States government
Here’s how you know
Here’s how you know
Official websites use .gov
A .gov website belongs to an official government organization in the United States.
Secure .gov websites use HTTPS
A lock
( Lock A locked padlock )
or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.
SEC homepage
Menu
Close
Search SEC.gov & EDGAR
Search
Search Filings
Search Filings
Full Text Search
Latest Filings
Mutual Fund Search
Variable Insurance Products Search
SIC Codes
CIK Lookup
Public Dissemination Service (PDS)
Search Assistance
Submit Filings
Submit Filings
EDGAR Filer Management Portal
EDGAR Filing Portal
Online Forms Management Portal
EDGAR Next
Forms Index
Filer Support & Resources
Data & Research
Data & Research
Data Library
Statistics & Data Visualizations
Structured Data
Investment Management Data
Open Data at the SEC
Rules, Enforcement, & Compliance
Rules & Regulations
Rulemaking Activity
Submit Public Comments
Staff Guidance
No-Action, Interpretive, and Exemptive Letters
Self-Regulatory Organization Rulemaking
Public Petitions for Rulemaking
Enforcement & Litigation
Litigation Releases
Administrative Proceedings
Administrative Law Judge Orders and Initial Decisions
Trading Suspensions
Distributions to Harmed Investors
Receiverships
Compliance
Examination Priorities
Risk Alerts
Compliance Outreach Program
Proposed Rules
What's New
Whistleblower Program
Featured Topics
Featured Topics
Crypto Task Force
Cybersecurity
Market Structure Analytics
Saving and Investing for Military Personnel
Saving and Investing for Teachers
SEC-CFTC Harmonization Initiative
Treasury Clearing Implementation
About
About
Mission
Commissioners
Divisions & Offices
Division & Office Directors
Advisory Committees
Budget & Performance
Reports & Publications
Commission Votes
Contact the SEC
Careers
Submit a Tip or Complaint
Newsroom
|
Investors
Small Businesses
Whistleblowers
Newsroom
|
Investors
Small Businesses
Whistleblowers
Search SEC.gov & EDGAR
Search
More in this Section
Enforcement & Litigation
Litigation Releases
Administrative Proceedings
Administrative Law Judge Orders and Initial Decisions
Trading Suspensions
Distributions to Harmed Investors
Receiverships
Electronic Filings in Administrative Proceedings (eFAP)
Rules of Practice
Applications for Reentry
Reports of Investigations
Whistleblower Program
Public Alert: Unregistered Soliciting Entities (PAUSE)
SEC Action Lookup - Individuals (SALI)
Enforcement Data Delivery Standards
Small Businesses
Appellate Briefs
Amicus / Friend of the Court Briefs
Enforcement & Litigation
Litigation Releases
Administrative Proceedings
Administrative Law Judge Orders and Initial Decisions
Trading Suspensions
Distributions to Harmed Investors
Receiverships
Electronic Filings in Administrative Proceedings (eFAP)
Rules of Practice
Applications for Reentry
Reports of Investigations
Whistleblower Program
Public Alert: Unregistered Soliciting Entities (PAUSE)
SEC Action Lookup - Individuals (SALI)
Enforcement Data Delivery Standards
Small Businesses
Appellate Briefs
Amicus / Friend of the Court Briefs
Home
Enforcement and Litigation
Litigation Releases
Garth R. Peterson
Garth R. Peterson
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22346 / April 25, 2012
Accounting and Auditing Enforcement Release No. 3384 / April 25, 2012
Securities and Exchange Commission v. Garth R. Peterson , Case No. CV 12-2033 (E.D.N.Y)(JBW) (filed April 25, 2012)
SEC CHARGES FORMER MORGAN STANLEY EXECUTIVE WITH FCPA VIOLATIONS AND INVESTMENT ADVISER FRAUD
The Securities and Exchange Commission today charged a former executive at Morgan Stanley with violating the Foreign Corrupt Practices Act (FCPA) as well as securities laws for investment advisers by secretly acquiring millions of dollars worth of real estate investments for himself and an influential Chinese official who in turn steered business to Morgan Stanley's funds.
The SEC alleges that Garth R. Peterson, who was a managing director in Morgan Stanley's real estate investment and fund advisory business, had a personal friendship and secret business relationship with the former Chairman of Yongye Enterprise (Group) Co. â" a Chinese state-owned entity with influence over the success of Morgan Stanley's real estate business in Shanghai. Peterson secretly arranged to have at least $1.8 million paid to himself and the Chinese official that he disguised as finder's fees that Morgan Stanley's funds owed to third parties. Peterson also secretly arranged for him, the Chinese official, and an attorney to acquire a valuable Shanghai real estate interest from a Morgan Stanley fund. Peterson was acquiring an interest from the fund but negotiated both sides of the transaction. In exchange for offers and payments from Peterson, the Chinese official helped Peterson and Morgan Stanley obtain business while personally benefitting from some of these same investments. Peterson's deception, self-dealing, and misappropriation breached the fiduciary duties he owed to Morgan Stanley's funds as their representative.
Peterson agreed to a settlement of the SEC's charges in which he will be permanently barred from the securities industry, pay more than $250,000 in disgorgement, and relinquish his interest in the valuable Shanghai real estate (currently valued at approximately $3.4 million) that he secretly acquired through his misconduct. The U.S. Department of Justice has filed a related criminal case against Peterson.
According to the SEC's complaint filed in U.S. District Court for the Eastern District of New York, Peterson's violations occurred from at least 2004 to 2007. His principal responsibility at Morgan Stanley was to evaluate, negotiate, acquire, manage and sell real estate investments on behalf of Morgan Stanley's advisers and funds. He was terminated in 2008 due to his FCPA misconduct.
The SEC alleges that Peterson led Morgan Stanley's effort to build a Chinese real estate investment portfolio for its real estate funds by cultivating a relationship with the Chinese official and taking advantage of his ability to steer opportunities to Morgan Stanley and his influence in helping with needed governmental approvals. Morgan Stanley thus partnered with Yongye on a number of significant Chinese real estate investments. At the same time, Peterson and the Chinese official expanded their personal business dealings both in a real estate interest secretly acquired from Morgan Stanley as well as by investing together in Chinese franchises of well-known U.S. fast food restaurants. Peterson failed to disclose these investments in annual disclosures that Morgan Stanley required him to make as part of his employment.
According to the SEC's complaint, Peterson openly credited the Chinese official with helping obtain approvals required from other Chinese government entities for a deal to close. He wrote to several Morgan Stanley employees in response to an e-mail discussing the terms of one of Yongye's purported investments, "Everyone pls keep in mind the big picture here. YY gave us this deal. ... So we owe them a favor relating to this deal. ... This should be very easy and friendly." In another e-mail a week later, Peterson described "YYI" as "our friends who are coming in because WE OWE THEM A FAVOR."
The SEC alleges that a Morgan Stanley compliance officer specifically informed Peterson in 2004 that employees of Yongye, a Chinese state-owned entity, were government officials for purposes of the FCPA. Peterson also received at least 35 FCPA compliance reminders from Morgan Stanley, but nonetheless committed the FCPA violations.
The SEC's complaint charges Peterson with violations of the anti-bribery, books and records and internal control provisions of the FCPA, and with aiding and abetting violations of the anti-fraud provisions of the Investment Advisers Act of 1940.
Peterson has consented to a court order (i) permanently enjoining him from violating Sections 30A and 13(b)(5) of the Securities Exchange Act of 1934 and Sections 206(1) and (2) of the Investment Advisers Act, (ii) requiring him to disgorge $254,589, and (iii) requiring him to relinquish to a court-appointed receiver the interest he secretly acquired from Morgan Stanley's fund in the Jin Lin Tiandi Serviced Apartments, which has a current estimated value of approximately $3.4 million. The proposed settlement is subject to court approval. Peterson has also consented to permanent industry bars based on the anticipated entry of the injunction against him and his criminal conviction.
The SEC acknowledges the assistance of the Fraud Section of DOJ's Criminal Division, the U.S. Attorney's Office for the Eastern District of New York, and the Federal Bureau of Investigation. Morgan Stanley, which is not charged in the matter, cooperated with the SEC's inquiry and conducted a thorough internal investigation to determine the scope of the improper payments and other misconduct involved.
SEC Complaint in this matter
Resources
SEC Complaint
Return to top
SEC homepage
About the SEC
Budget & Performance
Careers
Commission Votes
Contact
Contracts
Transparency
Accessibility & Disability
Super Intelligence
FOIA
Inspector General
No FEAR Act Data
Ombuds
SEC Excess Personal Property Guidance
Websites
Investor.gov
Related Sites
USA.gov
Site Information
Plain Writing
Privacy & Security
Site Map
Stay connected. Sign up for email updates.
Your email address
Sign Up
X
Facebook
Instagram
RSS
YouTube
Email Updates
SEC.gov | Garth R. Peterson
!function(){var e=navigator.userAgent,a=document.documentElement,n=a.className;n=n.replace("no-js","js"),/iPad|iPhone|iPod/.test(e)&&!window.MSStream&&(n+=" ua-ios"),a.className=n}();
{"path":{"baseUrl":"\/","pathPrefix":"","currentPath":"node\/512271","currentPathIsAdmin":false,"isFront":false,"currentLanguage":"en"},"pluralDelimiter":"\u0003","suppressDeprecationErrors":true,"gtag":{"tagId":"","consentMode":false,"otherIds":[],"events":[],"additionalConfigInfo":[]},"ajaxPageState":{"libraries":"eJxdT0GOwzAI_JBdn_oei2DkeINNZLC22devlaZS2wtiBhhmcKNUTPo97jxyaXEH3GJpiZrFhQW38A4cMqgeYQGlV19JFTKpQ-kUmvQKXP7I0cO4tC2kPnbg2wVdFslM0SCHPMs3vsEPPD7J6hgOGdPCKJyoRxxqUuePHjLLAuzVjimenRJGSLW08NoBK9LUn6SHlrytVOlcpJShB63QLSpBx_WkOzHNePol4fRQo_qMPvQ36ZXsAmd99lMNr2t_GUR9n60EyX9a_wePd5ns","theme":"uswds_sec","theme_token":null},"ajaxTrustedUrl":[],"gtm":{"tagId":null,"settings":{"data_layer":"dataLayer","include_classes":false,"allowlist_classes":"","blocklist_classes":"","include_environment":false,"environment_id":"","environment_token":""},"tagIds":["GTM-TD3BKV"]},"data":{"extlink":{"extTarget":false,"extTargetAppendNewWindowDisplay":true,"extTargetAppendNewWindowLabel":"(opens in a new window)","extTargetNoOverride":false,"extNofollow":false,"extTitleNoOverride":false,"extNoreferrer":false,"extFollowNoOverride":false,"extClass":"0","extLabel":"(link is external)","extImgClass":false,"extSubdomains":true,"extExclude":".*\\.gov|http:\/\/www.xbrl.org\/utr\/2013-05-17\/utr.xml|http:\/\/www.xbrl.org\/dtr\/type\/numeric-2009-12-16.xsd|http:\/\/www.xbrl.org\/dtr\/type\/nonNumeric-2009-12-16.xsd|https:\/\/secir.secure.force.com\/ombudsman\/OMMSForm","extInclude":"","extCssExclude":".data-exempt","extCssInclude":"","extCssExplicit":"","extAlert":true,"extAlertText":"You are now leaving the SEC Website. The link you have selected is located on another server. Please click on the OK button below to proceed to the selected site. The SEC does not endorse this web site, its sponsor, or any of the policies, activities, products, or services offered on the site or by any advertiser on the site.","extHideIcons":false,"mailtoClass":"0","telClass":"","mailtoLabel":"(link sends email)","telLabel":"(link is a phone number)","extUseFontAwesome":false,"extIconPlacement":"append","extPreventOrphan":false,"extFaLinkClasses":"fa fa-external-link","extFaMailtoClasses":"fa fa-envelope-o","extAdditionalLinkClasses":"","extAdditionalMailtoClasses":"","extAdditionalTelClasses":"","extFaTelClasses":"fa fa-phone","allowedDomains":null,"extExcludeNoreferrer":""}},"field_group":{"html_element":{"mode":"default","context":"view","settings":{"classes":"rightrail-list","show_empty_fields":false,"id":"","element":"div","show_label":true,"label_element":"h2","label_element_classes":"","attributes":"","effect":"none","speed":"fast"}}},"user":{"uid":0,"permissionsHash":"e506dfd1572f94bd1f339f1a7483bfbded31d4a9d2bdfdca3fdbc235153380ee"}}
Skip to search field
Skip to main content
An official website of the United States government
Here’s how you know
Here’s how you know
Official websites use .gov
A .gov website belongs to an official government organization in the United States.
Secure .gov websites use HTTPS
A lock
( Lock A locked padlock )
or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.