2016-06-08 SEC Press pdf 178 KB 5,287 chars

In re Galen J. Marsh

Exhibit of SEC: Morgan Stanley Failed to Safeguard Customer Data
Source PDF JSON
summary

Galen J. Marsh, a former Morgan Stanley financial advisor, was criminally convicted and permanently barred by the SEC for exceeding authorized access to confidential customer data valued over $5,000 between 2011 and 2014, resulting in 36 months’ probation and $600,000 in restitution.

paragraph

Between 2011 and December 2014, Galen J. Marsh, while employed as a financial advisor at Morgan Stanley Smith Barney, illegally accessed the firm’s computer system beyond his authorized permissions to obtain confidential customer information valued at more than $5,000. He pled guilty in September 2015 to a federal charge under 18 U.S.C. § 1030(a)(2)(A) and was sentenced in December 2015 to 36 months’ probation and ordered to pay $600,000 in restitution. The SEC found his actions violated securities laws and fiduciary duties, resulting in a permanent bar from association with any broker-dealer, investment adviser, or related entities, and a separate prohibition from participating in penny stock offerings.

narrative

Galen J. Marsh, a former Client Service Associate and later Financial Advisor at Morgan Stanley Smith Barney LLC (MSSB), intentionally exceeded his authorized access to the firm’s computer system between June 2011 and December 2014 to obtain confidential customer information. The stolen data, which had a value exceeding $5,000, consisted of sensitive financial records of hundreds of high-net-worth clients, violating both MSSB’s internal policies and federal computer fraud statutes. In September 2015, Marsh pled guilty to one count of exceeding authorized access under 18 U.S.C. § 1030(a)(2)(A), and in December 2015, he was sentenced to 36 months’ probation and ordered to pay $600,000 in restitution. The SEC, in its administrative proceeding, found that Marsh’s conduct breached his fiduciary duties and securities laws, rendering him unfit for industry participation. As a result, the Commission permanently barred him from association with any broker-dealer, investment adviser, municipal securities dealer, transfer agent, or nationally recognized statistical rating organization. Additionally, Marsh was barred from participating in any penny stock offering, including as a promoter, finder, or consultant, with eligibility to apply for reentry only after five years, subject to conditions including full satisfaction of restitution and arbitration obligations.

Enriched metadata

Scheme
cyber-fraud (90%)
Court
Southern District of New York
Outcome
pleaded · 2015-09-21
Restitution
$600,000
Victim loss
$5,000
Classified cyber-fraud(confidence 90%). No EDGAR filing fingerprint (criminal/DOJ-side scheme). detection rule →
Statutes
18 U.S.C. § 1030(a)SECTION 15(b) OF THE SECURITIES EXCHANGE ACTSECTION 203(f) OF THE INVESTMENT ADVISERS ACT
Parties
Securities and Exchange CommissionGALEN MARSH
Keywords
commissionmarshrespondentsecurities exchangeexchangegalen marshinvestmentordersecuritiesproceedingsinvestment advisersadvisersadministrative proceedingsexchange investmentinvestment adviser

Extracted insights

Dollar amounts 2
  • $600K $600,000 $100K–$1M
  • $5K $5,000 <$10K
Entities 2
  • person galen j. marsh
  • agency Securities and Exchange Commission
Triples 15
  • Galen J. Marsh was employed as Client Service Associate and Financial Advisor at Morgan Stanley Smith Barney LLC
  • Galen J. Marsh pled guilty to exceeding authorized access to computer and obtaining financial record information
  • Galen J. Marsh was sentenced to 36 months probation
  • Galen J. Marsh ordered to pay $600,000 restitution
  • Galen J. Marsh accessed without authorization Morgan Stanley Smith Barney LLC computer system
  • Galen J. Marsh obtained confidential customer information valued at more than $5,000
  • SEC barred from association Galen J. Marsh with any broker, dealer, investment adviser, or municipal securities dealer
  • SEC barred from participating in Galen J. Marsh in any penny stock offering
  • Galen J. Marsh was resident of Hoboken, New Jersey
  • Galen J. Marsh was age 32 years old
  • United States v. Galen Marsh case number 15 Cr. 641 (KTD) (S.D.N.Y.)
  • Galen J. Marsh pled guilty on September 21, 2015
  • Galen J. Marsh judgment entered on December 22, 2015
  • Galen J. Marsh began unauthorized access in approximately June 2011
  • Galen J. Marsh was employed between 2011 and December 2014
PDF
In re Galen J. Marsh · Source
Text layers
Extracted body text (5,287c) 

 
 
 
UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 78020 / June 8, 2016 
 
INVESTMENT ADVISERS ACT OF 1940 
Release No. 4414 / June 8, 2016 
 
ADMINISTRATIVE PROCEEDING  
File No. 3-17279 
 
ORDER 
INSTITUTING 
ADMINISTRATIVE PROCEEDINGS 
PURSUANT TO SECTION 15(b) OF THE 
SECURITIES EXCHANGE ACT OF 1934 
AND 
SECTION 203(f) OF THE 
INVESTMENT ADVISERS ACT OF 1940, 
MAKING FINDINGS, AND IMPOSING 
REMEDIAL SANCTIONS  
 
 
 
I. 
 
The Securities and Exchange Commission (the “Commission”) deems it appropriate and 
in the public interest that public administrative proceedings be, and hereby are, instituted 
pursuant to Sections 15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and 
Section 
203(f) of the Investment Advisers Act of 1940 (the “Advisers Act”) against Galen J. 
Marsh (“Marsh” or “Respondent”). 
 
II. 
 
In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, Respondent admits the Commission’s 
jurisdiction over him and the subject matter of these proceedings, and the findings contained in 
Paragraph III.2 
below, and consents to the entry of this Order Instituting Administrative 
Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) 
of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions 
(“Order”), as set forth below.
 
In the Matter of  
Galen J. Marsh,  
Respondent. 
 

 
2
 
 
III. 
 
On the basis of this Order and Respondent’s Offer, the Commission finds that: 
 
1.
 Between 2011 and December 2014, Marsh was first a Client Service Associate 
and then a Financial Advisor at Morgan Stanley Smith Barney LLC (“MSSB”), a broker-dealer 
and investment adviser registered with the Commission, where he provided brokerage and 
investment advisory services to several hundred MSSB customers, primarily high net worth 
individuals.  During this time, Marsh was a registered investment adviser representative and a 
registered representative associated with MSSB.  Marsh, 32
 years old, is a resident of Hoboken, 
New Jersey. 
2. On September 21, 2015, Marsh pled guilty to a criminal information in United 
States v. Galen Marsh, No. 15 Cr. 641 (KTD) (S.D.N.Y.) that charged him with one count of 
exceeding his authorized access to a computer and thereby obtaining information contained in a 
financial record of a financial institution, in violation of 18 U.S.C. § 1030(a)(2)(A).  On 
December 22, 2015, a judgment in the criminal case was entered against Marsh.  The court 
sentenced Marsh to 36 months’ probation and ordered him to pay restitution in the amount of 
$600,000.
 
3. In connection with his plea, Respondent admitted that: 
(a) beginning in approximately June 2011, he intentionally accessed MSSB’s 
computer system, exceeding his authorized access, and thereby obtained 
confidential customer information; and 
(b) this confidential customer information had a value of more than $5,000. 
IV. 
 
In view of the foregoing, the Commission deems it appropriate and in the public interest 
to impose the sanctions agreed to in Respondent’s Offer. 
 
Accordingly, it is hereby ORDERED: 
 
A. Pursuant to Section 15(b)(6) 
of the Exchange Act and Section 203(f) of the Advisers 
Act, 
that Respondent Marsh be, and hereby is barred from association with any 
broker, dealer, investment adviser, municipal securities dealer, municipal advisor, 
transfer agent, or nationally recognized statistical rating organization; and 
 
B. Pursuant to Section 15(b)(6) of the Exchange Act, that Respondent Marsh be, and 
hereby is barred from participating in any offering of a penny stock, including: acting 
as a promoter, finder, consultant, agent or other person who engages in activities with 
a broker, dealer or issuer for purposes of the issuance or trading in any penny stock, 
or inducing or attempting to induce the purchase or sale of any penny stock; 
 
 
with the right to apply for reentry after five years to the appropriate self-regulatory organization, or 

 
3
 
 
if there is none, to the Commission. 
 
Any reapplication for association by the Respondent will be subject to the applicable 
laws and regulations governing the reentry process, and reentry may be conditioned upon a 
number of factors, including, but not limited to, the satisfaction of any or all of the following:  
(a) any disgorgement ordered against the Respondent, whether or not the Commission has fully 
or partially waived payment of such disgorgement; (b) any arbitration award related to the 
conduct that served 
as the basis for the Commission order; (c) any self-regulatory organization 
arbitration award to a customer, whether or not related to the conduct that served as the basis for 
the Commission order; and (d) any restitution order by a self-regulatory organization, whether 
or not related to the conduct that served as the basis for the Commission order. 
 
By 
the Commission. 
 
 
Brent J. Fields  
Secretary
OCR text (5,373c · tika · 95% conf) 
UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 78020 / June 8, 2016 

 

INVESTMENT ADVISERS ACT OF 1940 

Release No. 4414 / June 8, 2016 

 

ADMINISTRATIVE PROCEEDING  

File No. 3-17279 

 

ORDER INSTITUTING 

ADMINISTRATIVE PROCEEDINGS 

PURSUANT TO SECTION 15(b) OF THE 

SECURITIES EXCHANGE ACT OF 1934 

AND SECTION 203(f) OF THE 

INVESTMENT ADVISERS ACT OF 1940, 

MAKING FINDINGS, AND IMPOSING 

REMEDIAL SANCTIONS  

 

 

 

I. 

 

The Securities and Exchange Commission (the “Commission”) deems it appropriate and 

in the public interest that public administrative proceedings be, and hereby are, instituted 

pursuant to Sections 15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and 

Section 203(f) of the Investment Advisers Act of 1940 (the “Advisers Act”) against Galen J. 

Marsh (“Marsh” or “Respondent”). 

 

II. 

 

In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, Respondent admits the Commission’s 

jurisdiction over him and the subject matter of these proceedings, and the findings contained in 

Paragraph III.2 below, and consents to the entry of this Order Instituting Administrative 

Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) 

of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions 

(“Order”), as set forth below.

 

In the Matter of  

Galen J. Marsh,  

Respondent. 
 



 

2  

III. 

 

On the basis of this Order and Respondent’s Offer, the Commission finds that: 

 

1. Between 2011 and December 2014, Marsh was first a Client Service Associate 

and then a Financial Advisor at Morgan Stanley Smith Barney LLC (“MSSB”), a broker-dealer 

and investment adviser registered with the Commission, where he provided brokerage and 

investment advisory services to several hundred MSSB customers, primarily high net worth 

individuals.  During this time, Marsh was a registered investment adviser representative and a 

registered representative associated with MSSB.  Marsh, 32 years old, is a resident of Hoboken, 

New Jersey. 

2. On September 21, 2015, Marsh pled guilty to a criminal information in United 

States v. Galen Marsh, No. 15 Cr. 641 (KTD) (S.D.N.Y.) that charged him with one count of 

exceeding his authorized access to a computer and thereby obtaining information contained in a 

financial record of a financial institution, in violation of 18 U.S.C. § 1030(a)(2)(A).  On 

December 22, 2015, a judgment in the criminal case was entered against Marsh.  The court 

sentenced Marsh to 36 months’ probation and ordered him to pay restitution in the amount of 

$600,000. 

3. In connection with his plea, Respondent admitted that: 

(a) beginning in approximately June 2011, he intentionally accessed MSSB’s 

computer system, exceeding his authorized access, and thereby obtained 

confidential customer information; and 

(b) this confidential customer information had a value of more than $5,000. 

IV. 

 

In view of the foregoing, the Commission deems it appropriate and in the public interest 

to impose the sanctions agreed to in Respondent’s Offer. 

 

Accordingly, it is hereby ORDERED: 

 

A. Pursuant to Section 15(b)(6) of the Exchange Act and Section 203(f) of the Advisers 

Act, that Respondent Marsh be, and hereby is barred from association with any 

broker, dealer, investment adviser, municipal securities dealer, municipal advisor, 

transfer agent, or nationally recognized statistical rating organization; and 

 

B. Pursuant to Section 15(b)(6) of the Exchange Act, that Respondent Marsh be, and 

hereby is barred from participating in any offering of a penny stock, including: acting 

as a promoter, finder, consultant, agent or other person who engages in activities with 

a broker, dealer or issuer for purposes of the issuance or trading in any penny stock, 

or inducing or attempting to induce the purchase or sale of any penny stock;  
 

with the right to apply for reentry after five years to the appropriate self-regulatory organization, or 



 

3  

if there is none, to the Commission. 

 

Any reapplication for association by the Respondent will be subject to the applicable 

laws and regulations governing the reentry process, and reentry may be conditioned upon a 

number of factors, including, but not limited to, the satisfaction of any or all of the following:  

(a) any disgorgement ordered against the Respondent, whether or not the Commission has fully 

or partially waived payment of such disgorgement; (b) any arbitration award related to the 

conduct that served as the basis for the Commission order; (c) any self-regulatory organization 

arbitration award to a customer, whether or not related to the conduct that served as the basis for 

the Commission order; and (d) any restitution order by a self-regulatory organization, whether 

or not related to the conduct that served as the basis for the Commission order. 

 

By the Commission. 

 

 

Brent J. Fields  

Secretary