Barred Stockbroker Charged With Embezzling PTA Funds

July 8, 2013

If you live long enough, you realize that few things in life are black and white. Human beings do all sorts of foolish things. Ya got yer good folks doing bad things for what they thought were the right reasons; and ya got yer bad folks doing good things for all the wrong reasons.  Consider this recent FINRA case as just another example of the challenging nature of modern-day morality.

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, John Rom submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of John Rom, Respondent (AWC 2013035729601, June 28, 2013).

Rom was first registered in 2008 with MetLife Securities Inc. in May 2008; and that association ended when the firm filed a Uniform Termination Notice for Securities Industry Registration ("Form U5") alleging that he had been terminated in February 2010 for "job abandonment." Thereafter, Rom was associated with Chase Investment Services Corp (March 2010-October 2012); and J.P. Morgan Securities LLC ("JPM Securities").  While with J.P. Morgan Securities, Rom was also affiliated with J.P. Morgan Chase Bank N.A.  On April 12, 2013, JPM Securities reported that he had been terminated by JP Morgan Chase Bank because he had been "unable to resolve his criminal charges during a discretionary leave of absence."

The AWC asserts that Rom had no prior formal disciplinary history.

PTA Treasurer

Between February 2009 and May 2011, Rom served a Treasurer of a parent teacher association ("PTA").  During that time, the AWC alleges that he wrote a series of checks (made payable to him or to cash) totaling at least $3,000 against the PTA account; and, thereafter, he converted those funds to his personal use.  At no time did Rom have the PTA's permission or was given authority to engage in the cited conduct. 

Grand Larceny Felony

Online FINRA records as of July 2, 2013 disclose that Rom had been charged on December 11, 2012, in Nassau First District Court, Hempstead, NY (Docket #2012NA027698) with the Felony of "Grand Larceny 3rd Degree."

NOTE: The criminal charges are merely allegations and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.


FINRA deemed Rom's conduct to be a violation of FINRA Rule 2010; and in accordance with the terms of the AWC, the self regulatory organization imposed upon Rom a Bar from associating with any FINRA member firm in any capacity.

Bill Singer's Comment

As many BrokeAndBroker readers know, I often prefer to present cases without initially disclosing certain facts -- facts that are often not presented by a regulator in its complaints or settlements,  or were not known at the outset of an investigation.  For some readers, these hidden disclosures come as a shock and often alter the manner in which the underlying events are interpreted.  In that spirit, please consider the following:


According to a press release from the Nassau County District Attorney's Office: "Roslyn Heights Man Charged With Embezzling $15K from School for Disabled Children / Rom used position as PTA treasurer to steal funds"(December 11, 2012), Rom, 57, had been arrested for embezzling $15,885 from the PTA, and was charged with Grand Larceny in the Third Degree, for which he faces up to seven years in prison if convicted. Press reports indicate that Rom pleaded not guilty and was released on his own recognizance.

SIDE BAR: I'm not exactly sure I understand why the DA's office charged Rom with embezzling over $15,000 but FINRA's AWC merely referenced some $3,000 in unauthorized checks.  Frankly, the variance between the prosecutor and the regulator is of a magnitude of five times -- not a minor difference.  

Special Ed

Then there is another fairly startling disclosure in the DA's press release that is lacking from FINRA's AWC: The victimized PTA was the Henry Viscardi School Special Education PTA. The school services children with severe physical and medical disabilities.  

SIDE BAR: As previously noted, I will leave it to your sensibilities as to whether it is a significant omission from the AWC that the victimized PTA involved a school for children with severe disabilities -- for me, it was a troubling revelation.

Curve Balls

The DA's release explains that Rom had "spent the money on personal living expenses after he had lost his job and his home to foreclosure." 

No -- that's not a justification or invitation to steal.  Many Americans lost their jobs during the Great Recession.  Many Americans lost their homes during the Great Recession.  Your hard luck does not entitle you to steal from others to pay your debts -- particularly when those others are, indirectly, severely disabled children.

Okay, but, one more thing:

Rom's daughter is a student at Henry Viscardi School.  

And so I ask:
  • you have a severely disabled daughter;
  • you have lost your job;
  • your home is in foreclosure; and 
  • you are 57-years-old (not exactly a spring chicken in a tight job market). 
How far would you go?  Rom has offered us one answer.  

Where we have ended this story is not exactly where most of you thought it was headed.  Now it's not so easy to sit in judgment and fashion the punishment.