U.S. watchdog bars Florida broker who used foundation's money

Reuters News
Posted: Jun 18, 2014 5:03 PM

By Suzanne Barlyn

(Reuters) - A Florida broker who worked for Morgan Stanley and Oppenheimer & Co Inc was permanently barred from the securities industry for using money from a foundation he headed to fund personal expenses, Wall Street's industry-funded watchdog said in regulatory documents.

Stuart Siegel, who most recently worked at Oppenheimer & Co Inc, in Sarasota, Florida, agreed to the ban in a settlement with the Financial Industry Regulatory Authority, dated Tuesday. Siegel did not admit or deny FINRA's allegations, according to the FINRA document.

Prior to Oppenheimer, Siegel worked at Morgan Stanley in Venice, Florida. The firm fired him in 2012, citing "concerns regarding dealings with a private foundation," according to Siegel's publicly available disclosure report.

Siegel and his lawyer did not return calls requesting comment. A spokeswoman for Morgan Stanley declined comment. An Oppenheimer spokesman was not able to immediately comment.

Siegel became president of the private foundation cited in the case in 1984, after it was established by a client's estate. FINRA did not identify the foundation, which was set up to promote Jewish charitable causes, or Siegel's client, according to the FINRA document.

Morgan Stanley gave Siegel permission to serve as president at the time, but did not allow him to receive compensation from the foundation or to serve as its broker. But Siegel as president had access to the foundation's checking account, including a debit card in his name.

He used a total of $76,000 of the foundation's funds on at least nine separate occasions to pay personal expenses, FINRA said, including $17,000 to pay a personal loan and nearly $31,000 for his children's' tuition expenses.

Siegel reimbursed the foundation after Morgan Stanley discovered the payments in 2012.

He joined Oppenheimer last year. Oppenheimer permitted him to resign in January after learning that FINRA had filed an enforcement complaint against him, according to Siegel's public report.

(Reporting by Suzanne Barlyn; Editing by Leslie Adler)