08/26/2011 08:57:00 AM EST
Financial Adviser Sentenced to Prison for Securities Fraud
A former Smith Barney financial adviser, Sanjeev Jayant
Kumar Shah, was sentenced to serve thirty-eight months in prison for securities
fraud in connection with the handling of two client accounts. Mr. Shah pleaded
guilty to one count of securities fraud and three counts of wire fraud. U.S.
v. Shah (S.D.N.Y.).
In 2008 Mr. Shah was the account executive for two
foreign banks that had accounts at Smith Barney. In the fall of 2008 Mr. Shah
executed unauthorized foreign currency transactions in the account of one
foreign bank, denominated Client - 1 in the papers. The transactions resulted
in millions of dollars in losses for Client -1.
Mr. Shah sought to conceal the losses by effectuating a
transfer of funds from another foreign bank, Client - 2. To transfer the funds
from the account of Client -2 to the account of Client -1 Mr. Shah fabricated
documents authorizing the brokerage to execute at least two electronic
transfers of funds totaling about $3.25 million. The documents were sent to Mr.
Shah's e-mail address at Smith Barney. They authorized the transfer of funds to
an account held by another entity at another foreign bank. Mr. Shah told Bank -
2 the transfers were to pay for bonds he recommended. When the bonds did not
appear in their account Mr. Shah told the bank that the statements were
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