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 erroneous.

For more news involving securities issues, visit SEC Actions, a blog by Thomas Gorman

For more information about LexisNexis products and solutions connect with us through our corporate site.