by Bruce Kelly and featured in Investment News
Joseph B. “Joby” Gruber, the former CEO of AIG broker-dealer FSC Securities Corp. who was forced to resign after Finra accused him of allowing an underling to take continuing-education exams in his name, is back in the independent broker-dealer business.
After a two-year hiatus mandated by his non-compete agreement with American International Group Inc., Mr. Gruber, 51, has been hired by American Portfolios Financial Services Inc., a fast-growing broker-dealer that recently had success recruiting brokers from another AIG broker-dealer, SagePoint Financial.
“Joby was very good with rep relations,” said Jonathan Henschen, an industry recruiter. “He brought strong continuity and stability to the firm.”
Mr. Gruber will be president of national sales and marketing, and a member of American Portfolios’ executive committee. He will work three days a week in American Portfolios’ Holbrook, N.Y. headquarters.
“We need to do better in practice management,” said Lon Dolber, chief executive of American Portfolios, explaining where Mr. Gruber’s focus will be directed. Mr. Dolber said the firm’s strength has been technology and culture.
SagePoint earlier this year lost its biggest office of about 100 reps and advisers to American Portfolios.
In a shock to many at the time, Mr. Gruber was forced out of FSC in April 2007 after spending more than two decades at the firm. The dispute centered on Mr. Gruber’s continuing-education exams.
According to his profile on Financial Industry Regulatory Authority Inc. BrokerCheck system, Mr. Gruber allowed his non-registered executive assistant to complete his firm’s web-based courses and proficiency tests. The assistant logged on to the firm’s continuing-education system, used Mr. Gruber’s password and identification, and completed the firm’s training program, according to Finra.
As a result, Finra suspended Mr. Gruber for three months last year and fined him $5,000.
Mr. Gruber was one of three CEOs of AIG broker-dealers to leave between January 2006 and June 2008.
James Cannon, former chief executive of AIG Financial Advisors Inc., now SagePoint Financial, left in 2008 “to pursue other interests,” company officials said at the time.
In January 2006, Mark Goldberg left as chief executive of Royal Alliance Associates Inc. He was replaced by industry veteran R. Lawrence Roth, who has since risen to chief executive of the entire AIG broker-dealer network. Formerly the AIG Advisor Group, that network was renamed Advisor Group this year.
Mr. Gruber, who neither admitted nor denied the findings of the Finra inquiry, did not return calls to comment.