A former RBC Wealth Management broker who pocketed $1.1 million that was deposited in his account in error was permanently barred from working at any U.S. broker-dealer.
Thomas Lee Johnson transferred the funds from his RBC account to his personal bank account for his own use and benefit when he knew he had received the funds in error and that he had no right to possess the funds, according to a Financial Industry Regulatory Authority hearing panel.
In 2017, Johnson sold approximately $951 worth of securities of Doosan Heavy Industries & Construction, a South Korean conglomerate, according to Finra, but ended up receiving $1,059,544.98 due to a currency translation error.
Finra noted that Johnson, an experienced broker with 35 years in the securities industry monitored his RBC account on a daily basis, knew the actual value of his Doosan holdings and that he had received the nearly $1.1 million in error.
Rather than notify the firm of the error, on Nov. 22, 2017, eight days after the money appeared in his account, Johnson transferred the funds from his RBC account to his personal checking account held at a bank not affiliated with RBC, according to Finra.
The complaint said Johnson planned to distribute the after-tax proceeds to himself and his four siblings. But on Nov. 28, 2017, RBC cancelled the liquidation of Johnson's Doosan securities and rebilled the transaction at the correct selling price. By RBC's accounting, Johnson was entitled to $924.79 after fees were deducted.
RBC terminated Johnson's employment in December 2017.
Johnson noticed that the Doosan transaction had been reversed and obtained a cashier's check in the amount of $1,060,000 from the bank and deposited the check into his RBC account the next day, the complaint said.
Finra said Johnson made numerous false statements to the panel including that he thought the money was his to keep. He also told the panel that when the transactions were not immediately reversed, he thought that his father “who's a very smart man, had hit another home run.” Johnson had inherited the Doosan stock from his father.
He also said the fact that RBC did not immediately correct the trade gave him confidence that the money belonged to him.