NEW YORK, Fri Aug 17, 2012 – A former Morgan Stanley real estate dealmaker was sentenced to nine months in prison on Thursday for skirting the bank’s internal controls in an effort to enrich himself and a Chinese government official.
Garth Peterson, 43, had pleaded guilty in April to conspiring to evade internal accounting controls that Morgan Stanley was required to maintain under the U.S. Foreign Corrupt Practices Act, an anti-bribery law.
Peterson, a managing director in Morgan Stanley’s real estate investment and fund advisory business in Shanghai, was fired in 2008 amid a probe into a suspect real estate deal, court records showed.
While federal investigators have increased efforts in recent years to enforce the FCPA, which is intended to thwart illicit payments to foreign officials, Peterson’s case is among the first related to the financial services industry.
The sentence, imposed by U.S. District Judge Jack Weinstein in Brooklyn, New York, was much shorter than the 51- to 60-month term sought by prosecutors.
A spokesman for U.S. Attorney Loretta Lynch in Brooklyn declined to comment.
During Thursday’s sentencing hearing, Peterson apologized to his family and his former employer, saying he went down “the wrong track” when he entered a suspect real estate deal with an unnamed official from Yongye, a state-owned real estate investment corporation in Shanghai.
Prosecutors accused Peterson of helping the official and a Canadian lawyer they did not identify secretly buy a stake, at a discounted price, in a valuable Shanghai property owned by a Morgan Stanley fund.