MS Morgan Stanley

By Justin Baer 

A former Morgan Stanley financial adviser pleaded guilty Monday to accessing client data and taking it home with him.

Federal prosecutors charged Galen Marsh, who was fired by the Wall Street firm in January after some of the information appeared online with an offer to sell a bigger cache, with one count of exceeding authorized access to a computer. The charge is a felony that carries a maximum of five years in prison.

According to court documents, Mr. Marsh allegedly made more than 5,000 unauthorized searches of confidential client information on the firm's computer systems using the identification numbers of other Morgan Stanley branches, groups and advisers, beginning in June 2011. He uploaded the data, which included client names, addresses, account numbers and investment information, to a personal server in his New Jersey home, the prosecutors alleged.

Prosecutors said the 31-year-old accessed the information "to use for his personal advantage as a private wealth management adviser," noting he had discussions about potential jobs with at least two Morgan Stanley competitors between October 2013 and last December.

The guilty plea didn't explain how details related to 1,200 clients appeared on Pastebin, a text-sharing website, in December--or why other details surfaced elsewhere online in early 2015, including the appearance of some client information on a public Twitter feed.

No other Morgan Stanley employee is under investigation in this matter, and investigators believe Mr. Marsh was acting alone, according to a person familiar with the probe. However, separate investigations into how the client information got from Mr. Marsh's computer onto the Internet are still ongoing, the person said.

Federal authorities began to explore earlier this year whether a hacker was behind the online publication of the data, The Wall Street Journal reported in February. The Journal also reported that federal investigators were seeking to determine whether Mr. Marsh brought the data home in anticipation of a move by the team of advisers with whom he had worked alongside for more than six years.

Mr. Marsh was a junior member of the 1211 Group, a successful wealth-advisory office in midtown Manhattan. The team had moved together from Bear Stearns Cos. in 2008. Mr. Marsh was promoted from trainee to full-fledged financial adviser last year.

"Mr. Marsh is an outstanding young man who made a mistake by accessing information from his firm's computers," Mr. Marsh's lawyer said on Monday. "His plea today, however, clearly shows and establishes that Mr. Marsh never sold, never disclosed and never posted any confidential information on the Internet. The truth is that the Internet disclosures were the result of outside hackers, and he had absolutely no knowledge of that, nor anything to do with that."

Mr. Marsh appeared in federal court Monday in downtown Manhattan, and was released on a $200,000 bond. His sentencing is scheduled for Dec. 7.

"Morgan Stanley appreciates the efforts by the U.S. Attorney's Office and FBI that have led to the guilty plea of Galen Marsh," Morgan Stanley said in a statement. "This action, which follows Morgan Stanley's initial investigation and reporting of his misconduct, makes clear that misuse of client account information will not be tolerated. "

Nicole Hong contributed to this article.

Write to Justin Baer at justin.baer@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

September 21, 2015 16:17 ET (20:17 GMT)

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