September 15, 2016
At first, today's BrokeAndBroker.com Blog case may strike you as boring. It's about a 71-year-old financial principal of a broker-dealer and his settlement of regulatory charges with the Financial Industry Regulatory Authority. What folks love about BrokeAndBroker, however, is that we do the dumpster diving and pick through the garbage. By way of shameless titillation and enticement, how about I throw into the mix of facts about this case the following: missing money, a girl friend, heroin for sex, and a number of funny checks. Not so ho hum anymore, is it?
Case In Point
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, James Michael Griegel submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of James Michael Griegel, Respondent (AWC 20160484704-01, August 31, 2016).
According to the AWC, Griegel entered the securities industry in 1977 but only first became registered in 2002, when he became a Financial and Operations Principal ("FINOP"). In March 2014, Griegel joined FINRA member firm Melvin Securities, LLC. The AWC asserts that Griegel had no prior relevant disciplinary history.
The Village Treasurer
From May 2013 through January 2016, Griegel served as the Treasurer of the town of Sauk Village, Illinois. As Treasurer, Griegel had access to the Sauk Village Police Department Pension Fund's bank accounts. As alleged in the AWC:
During his tenure as treasurer, Griegel forged the signatures of Sauk Village officials on police pension fund checks made payable to himself over the course of 10 months between April 2015 and January 2016. In total, Griegel converted approximately 33 checks totaling $21,206 from the Sauk Village Police Department Pension Fund.
The Village Idiot?
FINRA deemed Greigel's cited conduct to constitute his conversion of $21,206 in violation of FINRA Rule 2010. In accordance with the terms of the AWC, FINRA imposed upon Griegel a Bar from associating with any FINRA member firm in any capacity.
Bill Singer's Comment
And so, folks, that's pretty much the story you would get if you only read FINRA's AWC. Admittedly, an AWC is not intended as a potboiler of a story. And just as admittedly, my job here as the unseen voice of BrokeAndBroker is to put a spark in otherwise dull stories. I like to turn prose into poetry. I like to shake things up and surprise you. So . . . let's see what I've uncovered.
Illegal Sandwich Operation?
Online FINRA BrokerCheck records as of September 15, 2016, disclose under the heading "Criminal - Pending Charge" that Greigel was charged on January 3, 2016, in the Will County Circuit Court, Joliet, Illinois (Case # 2016CF000015) with the Felony of:
POSS AMT CON SUB EXCEPT (A)/(D)
SIDE BAR: You'd sort of think that a Wall Street regulator would have some standard for online disclosures that would not accept the above series of abbreviations give the seriousness of the matter as a felony.
All of which means Greigel may have been charged with a possible criminal act involving not paying the alternative minimum tax to a convict with attention deficit disorder who was in an illegal sandwich business.
- POSS as in "Possible?"
- AMT as in "Alternative Minimum Tax?"
- CON as in "Convict?"
- SUB as in "Submarine Sandwich?"
- A/D as in "Attention Deficit?"
On the other hand, and this is just GROSS speculation on my part, Greigel may have been charged with the possession of a statutorily-defined amount of a controlled substance but not pursuant to sections A and/or D of some uncited section of Illinois penal code.
BrokerCheck further discloses that Greigel pleaded "Not Guilty" to the felony charge and that:
Preliminary Hearing scheduled for 1/25/2016; Release on $10,000 Bond
IRS Tax Lien
Under the BrokerCheck heading of "Judgment/Lien" we are informed that on August 26, 2011, the Internal Revenue Service filed a $54,496 taxi lien against Griegel, and that his responsive statement to this item asserts:
FEDERAL TAX LIEN FOR AMOUNT THAT WAS DUE FOR LATE FILING OF TAX RETURNS. THE BALANCE IS BEING PAID OFF MONTHLY AND AS OF 4/1/12015 [sic] THE CURRENT BALANCE IS $30,400.00
As of the August 26, 2011, IRS tax lien filing, Griegel was serving as a FINOP for a FINRA member firm; and, within two years, would be appointed as a town Treasurer. You'd sort of think that being financially responsible for your own affairs would be an important consideration for any employer hiring (or retaining) either a FINOP or Treasurer. Amazingly, despite the warning signs of the 2011 tax lien and its ongoing balance, Griegel continued in FINOP and Treasurer roles for some five years until he was arrested and, thereafter, dismissed from both jobs.
Makes you wonder what kind of oversight exists at brokerage firms and over those handling the finances of many local governments -- of course, as most of us know, there ain't much. We're talking about someone doing the books and records, writing out the checks, and watching over the money: And the regulatory lynchpin to the oversight of such an individual is self reporting? Be it a broker-dealer or a town, you'd think that there would be some random background checks involving folks handling the money from time to time. In reality, the explanations typically advanced by victimized employers is that he or she never told us and, as such, we never knew. All of which raises the question as to why there isn't a regimen in place to retain a third-party to conduct random background checks over folks in such sensitive roles as FINOP or Treasurer.
Live, On Video
8. On or about January 8, 2016, the FBI interviewed the Chief of Police for Sauk Village. According to the police chief, GRIEGEL was arrested on or about January 3, 2016 by a neighboring police department for possession of heroin. Following the arrest, the police chief requested a review of the Village's bank accounts, and a preliminary review of the police pension fund account revealed several checks written directly to GRIEGEL.
9. On or about January 5, 2016, GRIEGEL reported to the Village for work, where he was informed by the police chief that he was suspended. The police chief also informed GRIEGEL that there were some issues with some checks. According to the police chief, GRIEGEL told him he took the money. GRIEGEL also stated that no one else was involved with the theft, and the he had forged signatures on the checks.