A former Morgan Stanley broker was barred today by the Financial Industry Regulatory Authority Inc. for allegedly misappropriating $11,156.47 from the charitable foundation of a 97-year-old nursing home resident who was his client for more than 20 years.
A former Morgan Stanley broker was barred today by the Financial Industry Regulatory Authority Inc. for allegedly misappropriating $11,156.47 from the charitable foundation of a 97-year-old nursing home resident who was his client for more than 20 years.
John Edward Mullins allegedly began to misuse the funds of his client, Esther Weil, after she became ill in April 2006 and needed 24-hour nursing care, Finra said in a statement.
Within three months of her becoming ill, Mr. Mullins misappropriated $4,000 to pay for a vacation at the Four Seasons in London, $5,500 toward his personal bill at upscale Philadelphia clothing store Boyds and $1,656.47 to buy 23 bottles of wine from Morton’s Restaurant in Atlantic City, N.J., according to Finra.
In addition to barring Mr. Mullins, the hearing panel sanctioned his wife, Kathleen Maria Mullins, a former registered representative with Morgan Stanley, imposing a nine-month suspension and $20,000 fine for allegedly borrowing $100,000 from the same client without approval of the brokerage firm, Finra said in its statement.
Both Mr. and Mrs. Mullins worked in the Northfield, N.J., branch office of Morgan Stanley from 2002 to 2006.
“We are filing an appeal of the Finra enforcement decision,” said Richard DeVita, of DeVita & Associates Inc. of Hoboken, N.J., who is representing Mr. and Mrs. Mullins.
“The decision has both procedural and factual inconsistencies and inaccuracies. The relationship that John and Kathleen had with the client was like a family relationship. My clients’ position is that they had full authority to do what they did,” Mr. DeVita said.
In addition, “a handwritten affirmation of the relationship with the client, written before she passed away, was provided to Finra’s enforcement division during the investigation, but the hearing panel did not permit it in as evidence,” he said.
Mr. Mullins acknowledged that there was “sloppy bookkeeping with respect to his role in the foundation, but everything was approved by the underlying client,” Mr. DeVita said.
“And the loan [taken by Mrs. Mullins] was never used, and repaid within 24 hours with full consent of the client,” he said.
The client, who had founded the Esther C. and Paul H. Weil Foundation with her late husband, died in February 2008.
“Morgan Stanley initiated an investigation into this matter and promptly terminated the employees in August 2006 after determining that they had violated firm policies,” said Morgan Stanley spokeswoman Christy Pollak.
