In a dramatic turn of events, U.S. District Judge William P. Dimitrouleas issued a final judgment on Monday, compelling Filoramo to disgorge around $760,000, part of the funds the SEC claims he illicitly took from his clients. The judge further levied nearly $200,000 in prejudgment interest and slapped a civil penalty of $190,000 on Filoramo, who neither admitted nor denied the SEC’s allegations.
Ex-Morgan Stanley Broker Pays $1.2M In Client Fraud Case : Deceptive Investment Scheme Unveiled
The SEC’s September complaint unraveled a convoluted narrative of deception. Filoramo allegedly assured his clients that their funds would be invested in securities endorsed by a supposed client. However, rather than fulfilling this commitment, he diverted the funds for personal indulgences, including extravagant gambling at casinos.
Covert Money Trail and SEC’s Findings
Adding a layer of perplexity to the case, Filoramo instructed clients to directly transfer money to the purported client. Unbeknownst to the clients, the funds were diverted to bank accounts controlled by Filoramo’s confidante. Shortly thereafter, the friend would transfer the money to Filoramo’s account. The SEC, in its findings, detailed at least 11 more fraudulent transactions that unfolded in the wake of the initial misappropriation.
Ex-Morgan Stanley Broker Pays $1.2M In Client Fraud Case: Termination and Regulatory Action
The alleged scheme came to light in 2023 when Filoramo’s wife alerted Morgan Stanley about his whereabouts. In response, Morgan Stanley conducted an internal investigation into Filoramo’s dealings with clients, subsequently terminating him.
