That's you, Kyle Rowe, former president of the Dallas-based brokerage Salomon Grey Financial Corp. According tothis piece yesterday
, the securities industry's self-regulatory arm known as the National Association of Securities Dealers (or NASD) got nasty and not only expelled Salomon Grey on Thursday, but also permanently barred the 39-year-old Rowe from ever entering into the securities biz again--a lifetime ban, as they say in the sports world. Salomon Grey folded in February after a litany of investigations and indiscretions and what NASD calls "widespread" rule violations. Apparently, the 8-year-old Salomon Grey, which once had offices in California and New York and Florida, was up to the kind of no-good shenanigans you only read about in novels or see in lousy Hollywood movies: "extensive supervisory failures, anti-money laundering violations, e-mail retention violations, customer complaint reporting violations" and other bad stuff.
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The company's closure hasn't stopped NASD from giving Rowe a swift kick; he was already forced to pay NASD $100,000 in August 2004 for an incident apparently unrelated to yesterday's actions. And in September 2002, the Securities and Exchange Commission came after Rowe and 16 other folks when they were charged with securities fraud in a pump-and-dump scheme designed to manipulate the stock of a start-up wetsuit manufacturing company based in Huntington Beach, California. The prosecution resulted in this piece in BusinessWeek.
Funny thing is, at the exact same time that Salomon Grey was involved in this scam, it was receiving plenty good pub from the folks back home. I doubt this will go down as one of the Dallas Business Journal's prouder moments:
"When Kyle Rowe bought Dallas stock brokerage Salomon Grey Financial Corp. in 1998, it was little more than a one-broker operation with a reach that ended at the state borders. Two years later, Rowe's brokerage has grown to 11 offices...has more than 60 brokers and is registered to do business in 48 states. The company recently moved into a new corporate headquarters in Three Lincoln Centre. What's more, Salomon Grey has rocketed from virtually zero customers to more than 15,000.
How does a brokerage grow that quickly? By attracting veteran brokers to the firm with upscale compensation packages, Rowe says. 'We're fair to the brokers. We pay them on time. We keep our word. That brings a lot of brokers to our door and they bring their clients with them.' Rowe is aiming to top $10 million in revenue in 2000."
Hey, who knew? No one. We all get taken, just some more than others. --Robert Wilonsky