SEC Obtains Final Judgment Against Investment Adviser Who Misappropriated Over $5 Million from Clients

Litigation Release No. 25004 / January 5, 2021

Securities and Exchange Commission v. Barry F. Connell,

Civil Action No. 17-cv-00831 (S.D.N.Y.)

On December 30, 2020, the U.S. District Court for the Southern District of New York entered a final consent judgment against Barry F. Connell, who was previously charged with investment adviser fraud for having misappropriated client funds.

According to the SEC's complaint, filed on February 3, 2017, Connell, while employed at a major financial institution, misappropriated more than $5 million from clients primarily by moving funds between certain client accounts and issuing falsified third-party wire transfer forms and checks. Connell allegedly directed the funds to cover his personal expenses and fund his lavish lifestyle. In a parallel criminal action, the U.S. Attorney's Office for the Southern District of New York filed criminal charges against Connell. Connell pled guilty to those charges and was sentenced to a prison term of time served of approximately 36 months and ordered to pay forfeiture and restitution.

The final judgment enjoins Connell from violating Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 and finds Connell liable for disgorgement in the amount of $5,148,651 that is deemed satisfied by the restitution ordered against him in the parallel criminal action.

Connell also consented to a Commission order issued today permanently barring him from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, as well as permanently barring him from participating in any offering of penny stock.