Main Line investment manager accused of taking millions from clients for personal expenses, according to lawsuits

For nearly 30 years, Scott Mason of Gladwyne and his Blue Bell-based investment firm Rubicon Asset Management were fixtures in his comfortable communities. The firm’s 115 clients trusted him with $231 million to invest mostly in mainstream stocks and bonds, as of its last SEC Form ADV annual report.

Mason golfed at Ambler-based Squires, an all-male club favored by developers and sports multimillionaires; summered on Long Beach Island and acquired properties there, including a mini-golf course; and endowed the head coach job for his old varsity hockey team at Hobart College, where Mason also served as a trustee.

So when Mason entered discussions to transfer customers to other firms earlier this year, it looked like the kind of smooth transition that might cap a successful career.

Then the lawsuits started, a string of allegations that Mason had drained some customers’ accounts to pay for his real estate portfolio, his children’s weddings, and other personal expenses.

Michael Czajka, cofounder of Malvern Capital Management, where former Rubicon clients had moved earlier this summer, said he and his partner James Olsen “were blindsided” by client accusations of Mason taking money from their accounts without permission.

An article about one of the suits in the Philadelphia Business Journal “was the first time we were aware of these allegations,” Czajka said. “We had to deliver that news” to clients and check for missing assets, finding that some clients’ last Rubicon reports didn’t match what was actually left in their accounts. “It’s been a sad, sad week.”

“We were blindsided. Now we’re trying to help these people,” Czajka said. Clients have been in contact with FBI and SEC investigators who are seeking information about Rubicon, he said.

Mason said Monday that his Blue Bell firm is still in business. He declined to comment about the lawsuits or why Rubicon’s website is down. He referred questions to his Philadelphia lawyer, Mary Hansen, who did not return calls.

The lawsuits, all filed in Montgomery County Common Pleas Court, include:

“Very simply, [Mason] stole the money,” said Tulin’s lawyer, Stephen A. Cozen, cofounder of one of Philadelphia’s largest corporate law firms.

According to his suit, “Tulin gave Mason limited discretion to pursue an extremely conservative investment strategy.” Instead, Mason is accused of forging Tulin’s and his wife’s signatures and transferring at least $1.8 million into his own company, Orchard Park Real Estate Holdings — a firm Tulin had never heard of, in a business sector he hadn’t approved. Orchard Park is the Buffalo suburb where Mason’s wife, Lynne Nowadly Mason, grew up.

Mason also “fabricated” tax forms to cover his thefts, the suit alleges. Tulin realized the money went missing only after an FBI agent contacted him July 15, according to the suit.

A second complaint by Sitron names SEI Investments, a multinational money management firm based in Oaks, Montgomery County, that served as custodian for Rubicon client funds. According to Sitron, SEI was supposed to seek permission from clients before transferring their money out of their investment accounts but did not do so.

The suit alleges that Mason took the money “to invest in businesses, make donations to his alma mater Hobart College, and to bankroll his and his family’s lifestyle,” all “for his own personal benefit,” without permission. Sitron said the transfers left her owing taxes, which boosted losses to $3.75 million.

SEI and Mason asked the court to dismiss Sitron’s lawsuits, arguing that her complaints are subject to binding arbitration.

Most of the people Mason is accused of stealing from were his friends, said Picker, the lawyer for Sitron, adding that investors want to know where the money went and what it will take to get it back. “This is people’s hard-earned money; it’s their retirement nest eggs.”

Cozen said his firm is continuing to investigate the Tulin case, and he is also considering lawsuits against two of the largest U.S. banks, which he says transferred funds from Tulin to Mason’s personal investment firm without checking with the investors.

An SEI spokesperson said the company doesn’t comment on litigation.