The US Securities and Exchange Commission has charged Michael Barry Carter, 46, a former registered representative and investment advisor, with fraud for stealing from brokerage customers and an elderly advisory client.

Between October 2007 and May 2019, the SEC alleges that Carter - who hails from Knoxville in Tennessee but who worked in Virginia - misappropriated approximately US$6 million from these clients while he served as their financial advisor at a large but unnamed financial institution that the SEC had licensed as a broker-dealer and investment advisor. Of that sum, it says that he misappropriated approximately $2.5 million in the last five years. His victims included friends and family.

Carter allegedly carried out his scheme by falsifying internal forms to effect approximately 60 unauthorised cash wire transfers from the customers’ accounts to his personal bank account. He is thought to have concealed his fraud from the investors by providing them with fake account statements that he fabricated, diverting their real account statements and other correspondence to post office boxes that he controlled or to a false email address that he created, and by making misrepresentations to them concerning their investments in securities, then using the funds to support a lavish lifestyle.

The SEC believes that Carter broke s10(b) Securities Exchange Act 1934 (and Rule 10b-5 thereunder) and ss206(1) and (2) Investment Advisors Act 1940. The SEC wants the US District Court of Maryland to permanently enjoin Carter from breaking federal securities laws again, ordering him to "disgorge" his ill-gotten gains and pay civil money penalties.

At all relevant times, Carter was an investment advisor under s202(11) Advisors Act.