Morgan Stanley wins $3.7M from ex-broker; advisor's widow to pay Ponzi victims

August 26, 2025 5:08 PM

For all the good the wealth management industry does for investors, there are always sad stories of clients falling prey to the scams and schemes of unscrupulous advisors.

We've rounded up some of the most notable cases from the past month below. Read on.

Andrea Verdelli/Bloomberg

Morgan Stanley wins $3.7M arb award against ex-broker

Morgan Stanley has wrung a more-than $3.7 million arbitration award from a now-barred broker over his failure to pay back money on an outstanding recruiting loan.

At the center of the case is Antoine Souma, who left Morgan Stanley in 2020 to start his own firm, Galliott Capital Advisors, in Beverly Hills, California. Morgan Stanley won an arbitration case against Souma nearly three years later alleging that he had departed with nearly $6.8 million in debt left outstanding on a recruiting loan used to entice him over from JPMorgan in 2016. Morgan Stanley and Souma later reached a settlement over that award, after arguing over how much of it Souma had actually paid.

Morgan Stanley's latest claim against Souma was over allegations that he had failed to live up to the terms of that settlement. A three-member Financial Industry Regulatory Authority arbitration panel ordered him on Aug. 22 to pay Morgan Stanley nearly $3.5 million in compensatory damages, along with interest and attorney's fees, after finding he had not cooperated with its investigation into the firm's complaints.

Souma has a chequered disciplinary history. FINRA's BrokerCheck database shows that JPMorgan — where he was for five years — paid $14 million in 2019 to settle allegations that he had recommended unsuitable investments and falsified performance reports for those investments, among other things. FINRA fined Souma $20,000 and suspended his industry license for two months in 2020 after finding he had furnished a client with inaccurate account reports.

FINRA barred him from the industry in 2023 for failing to cooperate with an investigation into his compliance with rules governing private securities transactions. Despite that ban, he remains registered as an investment advisor through the Securities and Exchange Commission.

A Morgan Stanley spokesperson declined to comment on the latest FINRA award.

Deceased advisor’s widow to pay $3.8M to Ponzi scheme victims

Wendy Swensen, the widow of a deceased advisor behind an alleged Ponzi scheme, has agreed to pay $3.8 million in compensation to victims.

The Securities and Exchange Commission announced the settlement earlier this month after accusing her husband, Stephen Romney Swensen, of scamming 50 investors out of roughly $29 million over an 11-year stretch. Swensen died by a suicide the same day he was discharged by a firm named Wealth Navigation Advisors over allegations that he had failed to disclose his outside business activities, a local TV station reported.

The SEC accused Stephen Swensen of misleadingly promising his clients a 5% return on their investments. Instead, though, he "misappropriated investor funds to make Ponzi-like payments to other investors and to pay for his, and his family's, personal expenses."

The SEC's settlement with Wendy Swensen says she is not suspected of taking part in his alleged Ponzi scheme. She has agreed to pay victims just over $3.6 million in disgorgement, $41,279 in prejudgment interest, and $171,592 in interest earned on investor funds while the case against her deceased husband was proceeding.

Frequent CNBC analyst gets 5 years for defrauding investors

A former investment advisor who made frequent guest TV appearances as an analyst was sentenced this month to five years in prison for securities fraud.

James Arthur MacDonald, the former CEO and chief investment officer of Los Angeles-based Hercules Investments and Index Strategy Advisors, was ordered on Aug. 4 to spend 60 months in prison for defrauding investors of millions of dollars. MacDonald, who had appeared frequently on CNBC to discuss investment opportunities, was believed to have cost clients between $30 million and $40 million in losses after recommending they bet the stock market would crash in 2020 following the outbreak of the COVID-19 pandemic and the presidential election that year.

The next year, according to prosecutors, MacDonald went to raise millions more from investors without properly disclosing his previous losses or accurately depicting how he would use the money. Prosecutors accused him of misappropriating the funds in various ways, including "spending $174,610 at a Porsche dealership and transferring $109,512 to the landlord of a home" he was renting.

He was eventually blamed for $3 million in losses. The Securities and Exchange Commission opened an inquiry, and MacDonald became a fugitive after failing to testify in 2021 at an investigative hearing.

When he was arrested three years later, he was found with a fake driver's license showing his photograph but a different name. He pleaded guilty to securities fraud in April. Dale Fischer, U.S. District Court Judge for the Central District California, plans to order restitution to the victims at a later date.

The SEC filed its civil complaint against MacDonald in 2022. He and Hercules Investments were found liable in that case last year and ordered to pay several million dollars to victims.

Former Fidelity advisor charged after obtaining loans from clients

An advisor fired by Fidelity Investments in 2021 for borrowing millions from clients has been charged with multiple accounts of fraud and money laundering.

Eric James Stone of St. Augustine, Florida, was accused of 10 counts of wire and mail fraud and five counts of money laundering related to his taking out loans from clients at Fidelity and using the money to pay for gambling, travel and settling personal debts. One investor purportedly lent him more than $2 million and was never paid back, according to prosecutors. Stone is alleged to have set up "fake email accounts, sent fake text messages, and pretended to hire attorneys to further defraud the victim."

FINRA's BrokerCheck database shows he began his career in 2008 at Fidelity. He was barred from the industry in 2023 for not cooperating with a FINRA investigation into his conduct.

His BrokerCheck page shows two customer complaints — one from a client who alleges she lent him just over $2.7 million, and another from a client who alleges she lent him $38,400.

The charges against Stone carry hefty penalties. He's faced with a maximum of 20 years in prison for each fraud count and a maximum of 10 years for each money-laundering count.