December 22, 2015

Former Morgan Stanley Financial Adviser Sentenced in Manhattan Federal Court for Illegally Accessing Confidential Client Information

Preet Bharara, the United States Attorney for the Southern District of New York, announced that GALEN MARSH was sentenced to three years’ probation and ordered to pay $600,000 in restitution for obtaining confidential client information from his employer, Morgan Stanley, by gaining unauthorized access to certain of Morgan Stanley’s computer systems. MARSH pled guilty on September 21, 2015, to an Information charging him with exceeding his authorized access to Morgan Stanley’s computer systems and was sentenced today by United States District Judge Kevin Thomas Duffy.

According to the Information, other submissions filed in Manhattan federal court, and other statements made in open court:

MARSH was employed in the private wealth management division of Morgan Stanley, initially as a Customer Service Associate (“CSA”) and then as a Financial Advisor (“FA”). In that capacity, MARSH worked as part of a group of CSAs and FAs at Morgan Stanley’s Manhattan office (the “Group”) that provided financial and investment services to particular private wealth management clients. Other similarly structured groups within the private wealth management division provided the same services to Morgan Stanley’s other private wealth management clients (together with the Group’s clients, the “Clients”).

Morgan Stanley maintained certain computer systems to manage confidential account information regarding the Clients. Like other FAs and CSAs, MARSH was authorized to access the Client information maintained in Morgan Stanley’s computer systems only with respect to Clients of his own Group. From June 2011 through December 2014, MARSH used Morgan Stanley’s computer systems to access, without permission or authority, confidential information about certain Clients serviced by FAs and CSAs outside of his Group. In order to obtain this unauthorized access to confidential Client information, MARSH used the identification numbers of other Morgan Stanley branches, groups, and FAs in the computer systems. MARSH conducted a total of approximately 6,000 unauthorized searches in the computer systems, and thereby obtained confidential Client information, including names, addresses, telephone numbers, account numbers, fixed-income investment information, and account values, of approximately 730,000 Client accounts. Over a series of dates from June 2011 through December 2014, MARSH uploaded the confidential Client information from Morgan Stanley to a personal server at his home in New Jersey.

MARSH illegally accessed the Bank’s confidential client information in order to use it for his personal advantage as a private wealth management adviser at the Bank. From October 2013 through December 2014, MARSH was engaged in discussions regarding potential employment with two other financial institutions that are competitors of the Bank.

As part of the sentence imposed today by Judge Duffy, MARSH, 31, of Hoboken, New Jersey, was ordered to forfeit certain computer hardware that he used in the commission of the offense and to pay restitution to Morgan Stanley in the amount of $600,000.

Mr. Bharara praised the investigative work of the Federal Bureau of Investigation.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Christine Magdo is in charge of the prosecution.