April 26, 2012- Prosecutors filed a criminal case against Garth Peterson in connection with Chinese real estate investments. He is accused of acquiring millions of U.S. dollars worth of investments for a Chinese official and himself, said the SEC.
On Wednesday, Peterson was to appear before a judge in federal court in Brooklyn for a plea hearing, in the criminal case. However, more details about the hearing were not available. Peterson was charged by the SEC for violating the Foreign Corrupt Practices Act. The Act bars the bribing of officials from foreign governments. He was also charged with the violation of securities laws.
Peterson was personal friends with a former chairperson of a state-owned entity in China. The entity, Yongye Enterprise Co., had an influence over Morgan Stanley’s real estate businesses’ success in Shanghai.
Peterson arranged to secretly have over $1.8 million given to the chairperson and himself. He disguised the payoff as a finder’s fee that was owed to another party buy Morgan Stanley.
Peterson, said the SEC, agreed to settle with the government for the charges and turned over unlawful profits of $250,000. He also agreed with relinquishing his stake of the real estate in Shanghai worth $3.4 million. He will also be barred from working again in the securities industry. A spokesperson from Morgan Stanley would not comment and Peterson’s attorney declined comment when asked by reporters.