BOSTON (Reuters) - Two former Morgan Stanley (NYSE:MS) advisers have agreed to plead guilty to U.S. charges that they misused client funds to make their own investments in a wind farm project, federal prosecutors said on Wednesday.
Federal prosecutors in Boston said James Polese, 51, and Cornelius Peterson, 28, misappropriated $500,000 to invest in and support the wind farm project. Polese also used funds from a client's account to pay for personal expenses, prosecutors said.
The conduct took place from 2014 to 2017, prosecutors said. Court papers did not identify Morgan Stanley by name, but records maintained by the Financial Industry Regulatory Authority show the bank terminated both men in June.
Lawyers for the two Massachusetts residents did not respond to request for comment. Morgan Stanley also did not immediately respond to a request for comment.
Polese and Peterson were each charged with one count conspiracy and investment adviser fraud and several counts of bank fraud, prosecutors said. Polese also was charged with aggravated identity theft.
The U.S. Securities and Exchange Commission also filed a related civil lawsuit on Wednesday against Polese and Peterson.