An irreverent Wall Street Blog
by Bill Singer
 
Join BrokeAndBroker blog on Facebook  Follow the BrokeAndBroker blog on Twitter  Connect with BrokeAndBroker on LinkedIn  Join Bill Singer on Google+  Subscribe to RSS Feed

Relationship Manager Barred Over Allegations Of Stealing Bank Customer's Funds
Written: May 17, 2012


Vector magnifying glass

It took 8 months to figure out what happened here

For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority (“FINRA”), without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Thomas Martin Rosen submitted a Letter of Acceptance, Waiver and Consent (“AWC”), which FINRA accepted. In the Matter of Thomas Martin Rosen, Respondent (AWC 20110305780-01, May 15, 2012).

Between the relevant time of approximately May 2007 and February 2011, Rosen served as a registered representative of a FINRA member firm and “relationship manager” for accounts of the member firm’s non-FINRA member bank affiliate.  Although not identified by name in the AWC, online FINRA records as of May 17, 2012, indicate that the member firm was Franklin Templeton Financial Services Corp. (“FTFSC”) and its bank affiliate was Fiduciary Trust Co. International.

The AWC alleged that during the relevant time, without a customer’s knowledge, Rosen effectuated unauthorized wire transfers from, and checks drawn off, the customer’s bank account to a business entity Rosen initially had formed to manufacture fire safety masks.  Rosen used some $789,000 in  misappropriated funds from the victimized customer to pay his business and other personal expenses.

On April 12,2011, FTFSC  terminated Rosen’s employment, and on April 18, 2011, filed a Form U5 terminating his registration based on “unsatisfactory performance” that was not “security related.” Some eight months after Rosen’s termination, FTFSC amended Rosen’s Form U5 on December 12, 2011, to disclose that he was the subject of an internal review by an affiliated non-FINRA member bank as a result of the misconduct that was purportedly identified by the bank following his termination.

FINRA alleged that by converting and making improper use of money transferred to his business from the banking customer, Rosen failed to observe high standards of commercial honor and just and equitable principles of trade in violation of NASD Rule 2110 (for his misconduct prior to December 15, 2008) and FINRA Rule 2010 (for his misconduct occurring on or after December 15,2008).  According to the AWC, FINRA imposed upon Rosen a bar in all capacities from associating with any FINRA member.

Bill Singer’s Comment,

Not a particularly complicated or profound case — more of a garden variety bit of nastiness to the tune of nearly $800,000.  The scary part is how relatively simple  it was to pull off this theft and how long it took for anyone to uncover it. Just what the hell were they looking at for some eight months after Rosen was fired?

It is comforting for many customers to think that banks are banks and stock brokerage firms are stock brokerage firms and the money of one is kept apart from the funds of the other and there are rigorous anti-fraud protocols in place.  Although such a belief may be technically correct, in reality, the barriers among financial services affiliates are often blurred and sometimes it’s not all that difficult for employees wearing multiple hats with roles at multiple affiliates to engage misconduct at more than one entity.

On modern day Wall Street, there’s lots of what they call cross-selling: the guy at the bank is trying to sell you insurance and stocks; the gal at the brokerage firm is trying to get you to buy annuities and open a bank account at their affiliate.  Then there’s the whole thing with all those confusing job titles.  I mean, after all, just what exactly do they mean when they tell us that someone is a “relationship manager?”

So — be careful out there.  When you walk by Citigroup, JP Morgan, Wells Fargo, Bank of America, Morgan Stanley Smith Barney, what you see may not always be what you get.  There are lots of strings and entanglements.  For starters, that relationship manager you deal with may be dipping into your bank accounts and no one seems to have a clue. As evidenced in Rosen, it could take a bank or brokerage firm eight months to figure out who did what to whom and for how much — assuming that they even track down all the problems.


 
[^top^]

Previous Entries
July 22, 2014
Stockbroker, Compliance, Legal, and Regulatory JobsEmployment Page BrokeAndBroker.com Jobs#wallstreetjobs @brokeandbrokerNOTICE TO EMPLOYERS... Read On
July 21, 2014
The customer says: Listen, I'm on the road and can't do it. Go ahead and sign my name. It's okay. The stockbroker is uneasy and asks: You su... Read On
July 19, 2014
Stockbroker Whiffs On Three Email StrikesJuly 18, 2014How nice. How convenient. Customers can actually send emails to their brokerage firms and ask fo... Read On
July 18, 2014
How nice. How convenient. Customers can actually send emails to their brokerage firms and ask for all sorts of things. Gone are the days of voicemail ... Read On
July 18, 2014
It's not always about the fireworks at trial.  Sometimes, the pyrotechnics of the motion practice leading up to the first day of testimony determ... Read On
July 17, 2014
Some registered persons have trouble making ends meet, even with a full-time job as a stockbroker. Other folks just want more -- and they seek outside... Read On
July 16, 2014
This stockbroker wasn't named in the public customer's FINRA Arbitration Statement of Claim caption.  The brokerage firm settled for less than 3%... Read On
July 15, 2014
Stockbroker, Compliance, Legal, and Regulatory JobsEmployment Page BrokeAndBroker.com Jobs#wallstreetjobs @brokeandbrokerNOTICE TO EMPLOYERS... Read On
BrokeAndBroker.com Job Search
Related Topics
Tag Cloud
Internet FINRA Bear Stearns Bloomberg SEC NASD NYSE Money Laundering Due Diligence Waiver Forbes China Chepucavage Broy Woody Allen Madoff NAC NPR Marketplace Stanford UBS Ketchum Antitrust NASDAQ RRBDLAW Schapiro Bill Singer BrokerAndBroker USERRA Brokeandbroker.com Morgan Keegan Arbitration BrokeAndBroker.com Khuzami BrokeAndBroker Aleynikov Goldman Sachs brokeandbroker Promissory Note U4 Bill SInger EFL CFTC Huffington Post Flash Crash arbitration RBC RRBDLAW.com Ponzi Affinity Fraud Wachovia Raymond James BrokeandBroker.com Expungement Fraud Securities Fraud Outside Business Activity Registered Rep Magazine FOREX BrokerAndBroker.com FBI Banc of America Pro Se Supreme Court Morgan Stanley Smith Barney E*Trade Margin email Galleon Penson U5 Defamation Protocol Wells Fargo Punitive Damages Citigroup Merrill Lynch ARS Employee Forgivable Loan Street Legal Morgan Stanley AWC Fidelity Bankruptcy Broke And Broker HFT David Sobel Day Trading Ameriprise Commissions Spouse Schwab Commission CRD Kenneth Starr IRS CNBC Complaint ATM Skimming Hacking Phishing Malware Naskovets Poteroba Koval Lincoln Financial Selling Away Outside Business Activities Rakoff 2nd Circuit Second Circuit IRA 401k Forgery Tax RRBDlaw.com Email Netschi Moore Whistleblower Street Sweeper Tran Bharara Facebook Online Bonus Eligibility Rule TD Ameritrade Hedge Fund SAC 1099 Smith Barney Lehman Brothers IC3 Scottrade Lehman JPMorgan Chase Hertz Insider Trading Bank of America Department of Justice Elles Bribe Auction Rate Securities Raiding Spam Edward Jones Medicare Diabetes Dow Schumer Walter Bid Rigging Real Estate Discrimination Wall Street Statutory Disqualification Form U4 Form U5 Indictment Boyland DOJ Corruption bill singer FTC Do Not Call FINRA Arbitration Costa Rica Settlement LIBOR Varney Plea Rule 8210 RRBDlaw Appeal Fowler LPL Johnson US Airways Reg D MSSB Vault Loan SunTrust Discovery Employment Rosenthal Recruiting Lawyer Trading Platform JP Morgan Employment Tuesday Wrongful Termination Bank Guarantee WaMu Solicitation REIT Martin Credit Cards Away Account Credit Repair PN Advisor Placement Group Forex Mortgage Private Placement Moon Merrill Anderson Exam Lee Borrowing Tax Lien Conversion Oppenheimer Wedbush Felony Misdemeanor Expenses ING Lien OTR Estate Jobs Florida Credit Card Elderly Flash Drive Annuity FNMA BrokeAndBroke TIC DWI Promissory Notes Suitability Will POA Power of Attorney Casino NSF MF Global Counterfeit Preet Bharara Corzine Hacker RIA Prison Disclosure NASAA Aguilar FCPA Subway Identity Theft Gold Dell Bar Injunction Bank Deutsche Bank God HSBC Private Placements Eric Stein Wire Fraud CCO Joshua Brown Backstage Wall Street Obstruction of Justice Retaliation Variable Annuity Outside Account Options Telephone Wine Social Media ADA Pacifico Non-Prosecution Agreement Confirm Tax Fraud Retirement OBA Equity Indexed Annuities EIA MetLife Continuing Education OIP Tax Liens Willful CE Unregistered Impersonation Annuities BBVA Business Expenses ETF JOBS Act Mail Fraud Parking Variable Annuities Signatures BitTorrent Impersonator Wire Transfer Wire Crowdfunding Nasdaq Away Accounts WSP Laptop Dodd Frank Checks RMBS PST Solicited Unsolicited Congress SRO Wife Discretion Non-Solicitation Restaurant Commodities Private Securities Transaction Offer of Settlement employment jobs Great Recession Chase Investment Services Arrest Barclays Liens Failure To Supervise Apple Time And Price T&P Husband Letter of Authorization LOA Sexism Knight Test Practice Sale Unfair Competition Signature Judgments Undisclosed Settlement Trainee Fee Trust Laser Side Bar Mattera Female Sales Assistant Kennedy Charge Sexist NML Argentina Embezzlement Silver Judgment Bank Fraud Deceased TSSB Trustee Frumento Conspiracy 6th Circuit Proctor Rule 3040 Class Action Beneficiary NYAG Schneiderman Gallagher White Compromise Website TRO Supervision SDNY Piwowar Rule 1122 Article V signature VA Rule 3270 OWB
 
Email Bill Singer Connect with Bill Singer on Facebook Follow Bill Singer on Twitter Link up with Bill Singer on LinkedIn Join Bill Singer on Google+