Whistleblower Seeks Probe of Bryn Mawr Trust

A former vice president at Bryn Mawr Trust Co. is asking several federal and state agencies to investigate the Pennsylvania bank for possible fraud.

Mary Talbutt-Glassberg, a former head fixed-income manager who covered hundreds of municipal issuers for the bank, has requested the Federal Reserve Bank, the Government Accounting Office, the Public Company Accounting Oversight Board, the Financial Industry Regulatory Authority, the Pennsylvania Department of Banking and Securities and the U.S. and state attorneys general to examine her allegations.

Her attorney, Bryan Mawr, Pa., solo practitioner Mark Schwartz, has also registered a complaint with the Occupational Health and Safety Administration, calling it a prelude to a filing with the U.S. District Court for the Eastern District of Pennsylvania.

In a legal filing, Schwartz argued that Bryn Mawr Trust abolished her job "under the guise of reorganization" as retaliation for protests about what she considered an illegal working environment that included fraudulent placing of client investments, non-compliance with the Sarbanes-Oxley Act of 2002, and control-and-governance inadequacies that included lack of system software and hardware, making it "impossible for her to determine at any one time what bank holdings were."

He said bank president and chief executive Francis Leto and his predecessor have signed SOX certifications that Talbutt-Glassberg contends are fraudulent.

According to Schwartz's filing, trades never made it to blotters, broker reviews were late and software-hardware made Sarbanes-Oxley compliance impossible. In addition, certain securities were not on an authorized investments list but were purchased for clients, he said, and management insisted placement on those securities after the fact.

The bank, in a statement, disputed Talbutt-Glassberg's claims.

"We believe OSHA will find that the allegations by Mary Talbutt lack merit and factual basis," said spokesman Scott Hoeflich. "Bryn Mawr Trust takes regulatory compliance very seriously and commits significant resources to ensuring that its operations meet regulatory requirements.

"It is disappointing that some want to overshadow this work and the 125-year history Bryn Mawr Trust has of building one of the best brands in the industry," Hoeflich added. "Bryn Mawr Trust remains focused on its employees, customers and shareholders."

Talbutt-Glassberg, a member of National Federation of Municipal Analysts, said she handled $226 million in individual muni securities for Bryn Mawr Trust's wealth management division, and had to handle between 930 and 1,465 muni issuers in recent years, in addition to 85 to 110 corporate credits. A solid mini analyst, she added, can cover 250 to 500 issuers as a full-time job.

"She is an unlikely whistleblower coming from six generations of prominent bankers," said Schwartz. "Given my municipal experience first as a bond lawyer and then a public finance investment banker, she is the best I've seen, and honest."

Schwartz, himself a 1980s whistleblower, represented the Harrisburg, Pa., City Council in its 2011 attempt at a bankruptcy filing, which a federal judge nullified.

According to Schwartz, it would take many months for her to unwind positions and make up unrealized losses for clients that resulted. Instances, he said, include improper investments made for clients including the Roman Catholic Diocese of Harrisburg, Pa., and Eastern University in Wayne, Pa.

Schwartz called Bryn Mawr Trust's offer a new job late last year "simply a sham."

The new position, he said, would have burdened her with "sole liability for the issues of which she had previously complained requiring her to spend as much time as needed to accomplish the impossible myriad of tasks."

In the bank's reply to the filing with OSHA, Genova Burns LLC partner James Bucci said: "BMT vehemently denies that it violated any SOX or other regulatory obligations, or engaged in fraud. … BMT maintains a system of internal controls to ensure SOX regulatory compliance."

The bank, he added, also tried to address concerns about Talbutt-Glassberg's duties and fixed-income operations.

According to Bucci, Talbutt-Glassberg resigned voluntarily and "cannot establish a prima facie case of retaliation because she did not suffer any adverse employment action."

Talbutt-Glassberg, who resigned effective Jan. 22, began as senior portfolio manager at Berwyn, Pa., financial services firm Stanley-Laman Group Inc. on April 25.

Her career has spanned more than 30 years, beginning with Vanguard Group in 1983. She is a sixth-generation Philadelphia-area banker whose ancestors include Philadelphia National Bank founder John Welsh and Cold War-era U.S. Secretary of State John Foster Dulles.

She was working at Davidson Trust when Bryn Mawr Trust acquired it in 2012. The Bond Buyer and other media outlets have periodically quoted her municipal commentary.