Mark Singer, a former Smith Barney broker who's been accused of criminal fraud in connection with the handling of cemetery trust funds in the Midwest, is suing his former employer for $7 million in unpaid compensation, plus legal costs.
Mark Singer, a former Smith Barney broker who's been accused of criminal fraud in connection with the handling of cemetery trust funds in the Midwest, is suing his former employer for $7 million in unpaid compensation, plus legal costs.
Mr. Singer claims he was wrongfully terminated by Smith Barney in 2007 after being accused of embezzlement.
The wrongful termination claim, filed earlier this year, was added to charges filed last year by Mr. Singer in which he claims Citigroup owes him another $487,000 in legal fees stemming from two 2007 Michigan class action. Those suits named Mr. Singer, among others, but were later dropped.
The arbitration case is scheduled to be heard in February 2011.
Mr. Singer's alleged criminal fraud was highlighted late last month in a Financial Industry Regulatory Authority Inc. announcement that Citigroup Global Markets Inc., the broker-dealer that operates as Smith Barney, had agreed to pay a $1.5 million fine in a failure-to-supervise case involving Mr. Singer.
"[Mr.] Singer helped … effect improper transfers to third parties, sometimes using conduit accounts to mask the transactions,” Finra said in a statement last month.
The cemetery trust funds at issue are prepayments for burial plots.
“Having cooperated with authorities since 2007, we're pleased to have this matter resolved," Citigroup spokesman Alexander Samuelson said in a statement. "This was a situation related to one former financial adviser at a single Smith Barney office.”
But blaming Mr. Singer in its settlement with Finra "is a way for [Citigroup] to avoid [having the fraud] directed at them," said Jeff Liddle of Liddle & Robinson LLC, who represents Mr. Singer in the arbitration case.
In 2009, without admitting guilt, Mr. Singer agreed to a $25,000 fine and a two-year suspension for failing to cooperate with Finra's investigation.
His client couldn't cooperate with Finra while facing criminal charges, Mr. Liddle countered.
Mr. Singer, who worked in Smith Barney's Newtown, Pa., office, was duped by a client, Clayton Smart, who also faces criminal charges, Mr. Liddle said.
Mr. Singer's high-powered criminal defense lawyer, Robert Katzberg, made the same argument to a Tennessee jury. Last month, the jury failed to reach a verdict after a 23-day trial and nine days of deliberation.
In closing arguments, Mr. Katzberg said Mr. Singer was a successful and wealthy adviser who had nothing to gain by engaging in fraud.
Shelby County, Tennessee prosecutor Bill Bright said he will seek a new trial.
"Any time the state fails to get a conviction, they've lost," Mr. Katzberg said.
He declined further comment.
Mr. Singer also faces possible criminal charges in Indiana over the same alleged scheme.
