NEW LONDON, Conn. — As members of liquidated New London Security Federal Credit Union start to receive their insured share checks in the mail, it appears that there is no connection between the shutdown and the death of an investment broker with ties to the financial institution.
Edwin F. Rachleff, 82, an A.G. Edwards broker who handled investments for members of the credit union, committed suicide by jumping from an apartment building on July 28, the same day NCUA liquidated the $12 million credit union.
NCUA made the decision to liquidate New London and discontinue its independent operations after determining that the credit union was insolvent, the regulator reported. Chartered in 1936, New London had 365 members and reported assets of $12.7 million.
NCUA would not comment on whether there was a tie between the Rachleff's death and the credit union's financial status. John McKechnie, director of public and congressional affairs at NCUA, said any questions regarding Rachleff should be referred to the appropriate law enforcement officials.
"Details involving the examination process of New London Security FCU are not being disclosed, as they involve proprietary, nonpublic credit union information, as well as confidential member financial data," McKechnie said.
NCUA's Asset Management and Control Center continues to analyze the credit union's records and is in the process of determining final member insurance payouts, McKechnie said.
"Quick action was necessary to protect the assets of the members. Checks for insured shares have been mailed, and in many cases received, by members of the former credit union," McKechnie said.
New London's investment portfolio was relatively conservative. Of note, however, was a drop in investment income from $626,966 in December 2007 to $152,309 in March 2008 and then back up to $161,743 as of June 30, according to financial performance records from NCUA.
Justin Gioia, a spokesman for Wachovia Securities LLC, confirmed with Credit Union Times that Rachleff served as a financial adviser with A.G. Edwards but would not provide any further comments. A.G. Edwards and Wachovia merged in October 2007. Rachleff had worked for A.G. Edwards since 1988, according to a broker check report from the Financial Industry Regulatory Authority, which regulates nearly 5,000 brokerage firms and more than 676,000 registered securities representatives,
The FINRA report also showed that Rachleff did not have any customer disputes or disciplinary or regulatory events filed against him as of Aug. 5. However, FINRA reported that he was not registered with one of the firms it regulates. Rachleff took and passed his last industry exam in 1998, the Uniform Securities Agent State Law Series 63.
Naomi Rachleff, the wife of Rachleff, told Credit Union Times there were no signs that her husband was depressed or worried about the financially collapsed credit union.
"We've been married for 60 years. 60 years," Mrs. Rachleff said from her home. "We were unbelievably close. I wish I had seen a sign. I wish I was smart enough to see a sign. I'm heartbroken. I'm sad."
Mrs. Rachleff said she didn't know how long he had been working at New London. Janice Brady, CEO, and Herb Linder, chairman, could not be reached. Linder told TheDay.com that his close friend was "forthright and upright, one of the most honest people I know," according to a July 30 article. Linder told the publication he could not discuss any matters involving New London's closure per instructions from federal officials.
"We had very little discussions about credit union business," Mrs. Rachleff said. "I never knew who his clients were unless a client would come up to me and say 'I am one of your husband's clients.'"
Well-know in the local Jewish community, Mr. Rachleff served with a number of organizations. John Budds, a family friend, told TheDay.com that since a spleen injury in 2007, Rachleff's health had suffered. Failing eyesight made it difficult for Rachleff to read, which led to potentially losing his broker's license.
Mrs. Rachleff said more than 600 people attended her husband's funeral on July 31.
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