An all American finance empire drew billions and a regulator's attention. How tropical travel and nights on the town helped First Trust sell funds with high fees by Emily Graffeo and Max Abelson Read aloud by Mark Ledorf, Jim Bowen as a salesman's knack for making a dusty old spiel sound splendid, his hands dance, his eyebrows jump, and his voice a cigar officionado's moneyed growl revs up a gear. The chief executive officer of a quiet but lucrative firm called First Trust, Bowen gets especially worked up by his favorite topic, the nobility of the financial advisers who shepherd America's savings. They live lives of service. They spend their entire life tending what I have kind of come to call the wealth of others, he said in a twenty twenty three video podcast, the emphasized word popping out like a big dog's bark. We serve them because they serve the real client. It was a folksy sermon for a leading company in the austere business of exchange traded funds, where competitors generally win customers by shaving their fees to nearly nil. First Trust, tucked into the prairie lands west of Chicago, oversees more than two hundred and fifty billion dollars and brings in an estimated one billion dollars or so in annual US revenue from selling ETFs the baskets of stocks and other securities that have transformed investing. That's more than all but a handful of companies in the fourteen trillion dollar global sector. The company has kept growing even though the performance of some key funds has lagged behind peers, and its fees are notably higher than those of top competitors. Rivals scratch their heads wondering about some secret sauce at the privately held firm. Internal emails reviewed by Bloomberg BusinessWeek and an investigation by the Financial Industry Regulatory Authority or FINRA, may offer some answers. According to the emails and interviews with former staffers, First Trust has pushed up against and in some cases arguably passed industry stricters as competitors went low frills. It made sale after sale to financial advisors who bought its funds for their clients while engaging them in a world of resort stays, personal coaching, sports tickets, and airmes scarves. In one email about six years ago, a First Trust salesman bragged to colleagues about luring thirteen million dollars in business from advisors at a big bank by dangling access to a performance coach. In another email, later on, a managing director chided colleagues, writing that pay to play is obviously illegal, but we have wholesalers, First Trust's name for its salespeople doing it repeatedly. If true, that could mean the everyday investors who bought the firm's products from advisors were paying more than the funds were worth. As for FINRA, for at least a year, the industry body with go congressional dispensation to watch over, Wall Street has been investigating how First Trusts salespeople win business from financial advisors. According to five people who asked for anonymity to discuss a confidential probe, companies that buy and sell securities are bound by rules meant to ensure they're not effectively bribing their way into deals that are bad for investors. Gifts must be small, entertainment can't be too lavish, and neither can be dangled. In exchange for business. If FENRA finds that a company is crossing the line, it can levy finds suspensions or even lifetime bans, though it hasn't handed down many of the latter over pay to play situations, Bowen's company can seem like a throwback. Its main office doesn't splash its name outside, and its website looks as if it hasn't changed a pixel since the days of dial up. First Trust wholesalers called this because they pitch the company's funds to advisors, who in turn sell them to everyday investors have been told not to touch alcohol when they're entertaining clients to help keep heads clear. Yet Bowen's pay has recently rivaled that of top Wall Street executives and his luxuriant approach to business, including a seventy thousand dollars alcohol tab at Ritz. Carlton has been dragged into the open for a reason entirely unrelated to FINRA divorce proceedings. In twenty twenty two, his ex wife's legal team brought his large credit card bills and other financial and operational details about First Trust into the public record, aiming to show that he owed her more money Bowen and other company executives didn't respond to emails and calls about this story. A spokesperson for Finra declined to comment on the investigation, which was first reported by the Industry publication ignites. The sales culture Bowen nurtured at First Trust was go, go go. Why'd you only have three dinners this week? Why didn't you have four? Says Craig Koprowski, a wholesaler there from twenty eleven to twenty twenty. You're selling the most expensive etf WI mediocre performance. You better do something different, and that's what we did. Few things are more beloved on Wall Street than winning, but finance's greatest breakthrough of the past half century was about averageness. When Vanguard Group founder Jack Bogel introduced the indexed mutual fund to public investors in the mid nineteen seventies, it offered them a way to own a slice of the equity market by buying practically every stock at once. The index fund's genius was to guarantee that customers wouldn't trail the market's overall performance, making it a safer, if potentially less rewarding bet than investing in a single company. The ETF came along in the early nineties with a shape that was pretty much the same a big basket of stocks, but now investors could buy or sell one whenever the market was open, instead of having to wait until the day's end, as a mutual fund requires. It's in the name. An ETF is a fund that's traded on an exchange. It also tended to cost less in fees and taxes than a mutual fund, and investors could more easily keep tabs on which stocks were included. Still, when ETFs first came on the market, they were greeted with a shrug, in part because the same lower fees that made them more attractive to investors made them less attractive to brokers. First Trust was born around that time in the basement of a mansion just outside Wheaton, Illinois, a prim suburban community about an hour's drive from Chicago. The company, then known as Nike Securities, was helmed by Robert Van Kempen, a veteran of the municipal bond industry. Van Kempen was known for his high intensity sales style, which had earned him the nickname the Charter, and for his immense collection of bibles. His fondness for sobriety and his interest in the apocalypse. Bowen was an alumnus of Wheaton College, a local evangelical school, where he majored in physical education and played football. He'd married his college sweetheart, became a car and a hospital orderly, tried to get into medical school, and then hopped over to finance. He got grunt jobs at a Chicago commodities brokerage and eventually landed at a municipal bond firm called Clayton Brown, where he got involved in a product known as unit investment trusts, another kind of basket often made up of bonds. Unlike mutual funds, they exist only for a fixed time and can charge new fees each time one expires and a successor takes its place. In nineteen ninety one, Bowen joined Nike Securities and helped arrange for it to buy Clayton Brown's uit business. Within a few years, he was running the firm, and by the time Van Campen died in nineteen ninety nine, it was among the biggest sellers of UITs in the US. Not long after, it rebranded to First Trust. Even after Van Campen's death, the company stayed spiritually closer to Wheaton College than to Wall Street. A prayer played over the intercom at office holiday meals, three veterans or call, and one former employee, whose Catholic says the firm had a kind of evangelical in crowd he felt excluded from. But two doctrines at least were universal. An emphasis on salesmanship and fidelity to Bowen's leadership geography gave First Trust a calling card in the flyover cities that the rest of the world didn't care about, says Ben Fulton, who worked at Nike Securities before joining a nearby rival. Advisors in places such as Dayton, Ohio, and Wichita, Kansas grew to appreciate that First Trust wholesalers actually come in there and take care of them and talk to them. Starting in two thousand and five, those wholesalers and advisors had something new to talk up. First Trusts made in ETF, which tracked the smallest publicly traded companies. ETFs were finally catching on, aided by a soft glow of democratic fairness. Whereas a given mutual fund might require hundreds or even thousands of dollars to get into and might cost more for small doll investors than bigger ones. All you needed was a brokerage account with et Trade or somewhere else to buy an ETF on the same terms as everyone else. Eventually you could use them to invest in just about anything, from crypto to uranium to psychedelics. The industry also started offering mutual fund style, actively managed ETFs, with professionals deciding what to buy and sell. But the biggest ones remained passive, simply tracking an index. As First Trust embraced ETFs, so did Black Rock, Vanguard, and State Street. Those much larger rivals began undercutting one another's fees, charging customers less and less than almost nothing. First Trust excused itself from the race to the lowest fees, sticking with comparatively high rates and winning business across the country. Anyhow, thanks in part to its salesforce, closing deals in finance requires some combination of charm, grit and mojo. It helps, too, to command the coin of the re elm stake dinners, sports tickets, and golf outings are woven tightly into the industry. To these standard touches, First Trusts salespeople added flourishes such as sessions with performance coaches and free resort stays for exclusive educational summits called sales Insight Forums. The company also made sure its salesforce always had something to sell, introducing new funds often and expanding its portfolio into the hundreds of ETFs for a handful of its products. First Trust has licensed indexes owned by Bloomberg LP, the parent company of BusinessWeek. Bowen bought controlling ownership of First Trust from the Van Campen family in twenty ten, strengthening his hold on the firm. He and his wife separated not long after, and he began dating his longtime assistant. Amid those changes, former employees say First Trust ramped up its hiring and sales efforts. One ex wholesaler recalls that wardrobes got spiffier, citing an influx of pocket squares. When Koprowski interviewed for a job as a wholesaler in twenty eleven, First Trust employees kept asking if he'd met Bowen. So I went in his office. He walks in, He was on his phone, hangs up, sits down, says so what do you think? And I said, I think you're running some kind of cult here. He goes, well, you're kind of right cultishness. Notwithstanding the job paid well, Koprowski came on board. We'll be right back with an all American finance empire. Drew billions and a regulator's attention. Welcome back to an all American finance empire drew billions and a regulator's attention. The financial advisors who buy ETFs on behalf of clients have an endless array of choices. Brochures pile up in the trash. Some industry wholesalers who push too hard are asked not to come back beyond price. The difference between a fund that sells and one that doesn't is typically performance gauging. That can be tricky, though, because there isn't always a clear way to sort various funds into obvious peer groups. One way to do it, using data from the analysis firm morning Star, shows that First trusts ETFs have been steadily mediocre over the past year or so. About half have underperformed their peers. One of the company's biggest sellers, the Value Line Dividend Index Fund, for example, charges investors more than rivals for performance that has lagged them consistently. A smaller portion of First Trust products have thrived, including about fifteen actively managed fixed income funds that have outperformed the main bond benchmark, and a small crypto offering that was wildly successful last year. Many ETFs are designed to match the returns of the market at a reasonable cost, so a significant performance gap can be a problem. It can, though, be bridged by aggressive sales, the area where First Trust has long excelled. There is no more competitive sales force than First Trusts managing director Dan Affetto, Bowen's brother in law through his second wife, told colleagues in a twenty twenty one email. FINRA's rules play a role in restraining firms aggression. Among other things, they specify that when wooing clients, salespeople can't give gifts collectively worth more than one hundred dollars per client each year in relation to the business of the recipient's employer. They can't offer meals and entertainment that are frequent or lavish enough to raise any question of propriety, a definition firms must interpret for themselves, and they can't provide food or fund precondition on achievement of a sales target, because that could coax an advisor to cater to the interests of the gift giver over the needs of the ultimate investor. The rules essentially mean an ETF wholesaler can give a financial advisor a stake, but not a freezer full of bas and not even a single crackerjack at a Cubs game if it's in exchange for a promised sale. Yet, internal emails from First Trust, sent by seasoned executives and rookies alike, often to many colleagues at a time, beginning many years ago and as recently as last year, show what could fairly be described as staffer's offering perks to win sales. About six years ago, one wholesaler told co workers he debated advisors with the prospect of invitations to the company's exclusive sales forums, which came with trips to ritzy spots such as Hawaii and Palm Beach, Florida, and included flights, accommodations, and meals. FINRA's gift rules allow for some training and education as long as it's not quid pro quo, records are kept, guests aren't paid for, and the location is appropriate to the purpose of the meeting. The wholesaler recalled in the email that when Wells Fargo advisors mentioned the forum. He said he'd love to include them, but I have very few spots for many producers. They asked for a production number of what they need to get there, he wrote, and they were soon closing a deal for us. The lucrative cousin to ETFs. In another email from around the same time, a different wholesaler recounted explaining to Morgan Stanley advisors that they'd need to add thirteen million dollars in business to win consistent access to a sought after First Trust performance coach. The advisors agreed without any hesitation. The wholesaler wrote. A Wells Fargo spokeswoman says any staffers who violate its rules on business, entertainment, educational meetings, or sales contests would face discipline up determination. Morgan Stanley declined to comment. In an especially stark email from early twenty twenty one, a First Trust executive told colleagues that the US Securities and Exchange Commission had recently visited headquarters. Staffers had been crossing the line, the executive said in the email, and he offered examples. If you do this amount of business, I can get you on the trip to Chicago, or if you do that this amount of business I will get you to this game. On top of that, colleagues were too often dropping off food or were breaking rules by simply overspending, he wrote, citing a bill for a three hundred dollars dinner on top of a three hundred dollars ticket to see a hockey game. He told wholesalers they'd be fired if they kept it up. The SEC declined to comment. With thinner regulations not specifying exactly what salespeople can spend when they're out winning business, companies have their own rules capping what money can flow between wholesalers and the advisors they're wooing. Five people who've worked for First Trust describe moves encouraged by managers and others that let wholesalers blow past those limits. Fudging expense reports by adding advisors who weren't really at an event, which would make a steep bill look more reasonable, for instance, or swapping out the name of an attendee who'd reached their annual cap for the name of one who hadn't. First Trust wholesalers who were spending freely may have taken cues from their busy photos on Bowen's Instagram feed show him with cigars on a patio, on a boat on his birthday, in front of TV sets, and by the fire, vintage wine bottles, an oversized wine bottle, sparkling wine in flutes, and sparkling wine in coops. His divorce brought the overlap between his personal and professional habits into the open and showed two how he set the tone for the company's sales culture. The proceedings began in twenty twelve and were finalized in twenty fourteen, only to be reopened later in a dispute over his payments to his ex wife. Her lawyers told the court he made at least thirty four point eight million dollars in twenty twenty two, more than Jamie Diamond was paid that year a top JP Morgan Chase, the biggest American bank. One of Bowen's lawyers told the judge his client was worth more than two hundred and thirty one million dollars as of twenty twenty one. As part of their attempt to protect the payments to Bowen's ex wife, her lawyers dug into his credit card bills to the show he was spending more on food and fun than he'd been saying they homed in on his expenses at restaurants in Naples, Florida, in twenty twenty one, asking about more than one hundred and forty seven thousand dollars at Sea Salt, an additional one hundred thousand dollars at the Continental Steakhouse, where he spent thousands of dollars at a time every week or so, and seventy thousand dollars at a seafood place called Sales Restaurant. I'm dining, I'm entertaining, he explained during a court appearance in twenty twenty two. It wasn't always clear whether Bowen was hosting friends, colleagues, or clients, but business was evidently involved in at least one big check. When one of his ex wife's attorneys asked him on the stand that same year if a seventy thousand dollars alcohol bill at the Naples Ritz Carlton was related to First Trust, he answered, m hmm. Is that a yes? The lawyer asked, that's a yes. The judge asked yes. Bowen said his expenses at one point included the thirty six thousand dollars per month in unreimbursed business related sports tickets, such as seasoned seats for the Chicago Bears and Chicago Bulls. He even spent forty eight hundred dollars at Ermez one year on a hall that included scarves he said were for workers in Chicago's hotels and restaurants. I take my best customers and entertain them at their hotels through these meetings and through dinners. He testified. Some of my best customers are high maintenance, and these people are the ones that handle the high maintenance issues. He then reached for an unusual metaphor to explain how buying expensive scarves improved the bond with these clients. I call it traveling through time together. Bowen's divorce case is still ongoing. Courthouse records suggest while FINRA's investigation carries on, First Trust keeps releasing new kinds of funds, pulling in new cash for old ones, and wooing financial advisors to buy more. Last February, a wholesaler who'd been at First Trust for more than two decades emailed his co workers about their firms enduring sales culture. We are expected to entertain. He wrote, this company was built on entertaining. It was and still is the one leg up on our competition with Nicola M. White

An all American finance empire drew billions and a regulator's attention. How tropical travel and nights on the town helped First Trust sell funds with high fees by Emily Graffeo and Max Abelson Read aloud by Mark Ledorf, Jim Bowen as a salesman's knack for making a dusty old spiel sound splendid, his hands dance, his eyebrows jump, and his voice a cigar officionado's moneyed growl revs up a gear. The chief executive officer of a quiet but lucrative firm called First Trust, Bowen gets especially worked up by his favorite topic, the nobility of the financial advisers who shepherd America's savings. They live lives of service. They spend their entire life tending what I have kind of come to call the wealth of others, he said in a twenty twenty three video podcast, the emphasized word popping out like a big dog's bark. We serve them because they serve the real client. It was a folksy sermon for a leading company in the austere business of exchange traded funds, where competitors generally win customers by shaving their fees to nearly nil. First Trust, tucked into the prairie lands west of Chicago, oversees more than two hundred and fifty billion dollars and brings in an estimated one billion dollars or so in annual US revenue from selling ETFs the baskets of stocks and other securities that have transformed investing. That's more than all but a handful of companies in the fourteen trillion dollar global sector. The company has kept growing even though the performance of some key funds has lagged behind peers, and its fees are notably higher than those of top competitors. Rivals scratch their heads wondering about some secret sauce at the privately held firm. Internal emails reviewed by Bloomberg BusinessWeek and an investigation by the Financial Industry Regulatory Authority or FINRA, may offer some answers. According to the emails and interviews with former staffers, First Trust has pushed up against and in some cases arguably passed industry stricters as competitors went low frills. It made sale after sale to financial advisors who bought its funds for their clients while engaging them in a world of resort stays, personal coaching, sports tickets, and airmes scarves. In one email about six years ago, a First Trust salesman bragged to colleagues about luring thirteen million dollars in business from advisors at a big bank by dangling access to a performance coach. In another email, later on, a managing director chided colleagues, writing that pay to play is obviously illegal, but we have wholesalers, First Trust's name for its salespeople doing it repeatedly. If true, that could mean the everyday investors who bought the firm's products from advisors were paying more than the funds were worth. As for FINRA, for at least a year, the industry body with go congressional dispensation to watch over, Wall Street has been investigating how First Trusts salespeople win business from financial advisors. According to five people who asked for anonymity to discuss a confidential probe, companies that buy and sell securities are bound by rules meant to ensure they're not effectively bribing their way into deals that are bad for investors. Gifts must be small, entertainment can't be too lavish, and neither can be dangled. In exchange for business. If FENRA finds that a company is crossing the line, it can levy finds suspensions or even lifetime bans, though it hasn't handed down many of the latter over pay to play situations, Bowen's company can seem like a throwback. Its main office doesn't splash its name outside, and its website looks as if it hasn't changed a pixel since the days of dial up. First Trust wholesalers called this because they pitch the company's funds to advisors, who in turn sell them to everyday investors have been told not to touch alcohol when they're entertaining clients to help keep heads clear. Yet Bowen's pay has recently rivaled that of top Wall Street executives and his luxuriant approach to business, including a seventy thousand dollars alcohol tab at Ritz. Carlton has been dragged into the open for a reason entirely unrelated to FINRA divorce proceedings. In twenty twenty two, his ex wife's legal team brought his large credit card bills and other financial and operational details about First Trust into the public record, aiming to show that he owed her more money Bowen and other company executives didn't respond to emails and calls about this story. A spokesperson for Finra declined to comment on the investigation, which was first reported by the Industry publication ignites. The sales culture Bowen nurtured at First Trust was go, go go. Why'd you only have three dinners this week? Why didn't you have four? Says Craig Koprowski, a wholesaler there from twenty eleven to twenty twenty. You're selling the most expensive etf WI mediocre performance. You better do something different, and that's what we did. Few things are more beloved on Wall Street than winning, but finance's greatest breakthrough of the past half century was about averageness. When Vanguard Group founder Jack Bogel introduced the indexed mutual fund to public investors in the mid nineteen seventies, it offered them a way to own a slice of the equity market by buying practically every stock at once. The index fund's genius was to guarantee that customers wouldn't trail the market's overall performance, making it a safer, if potentially less rewarding bet than investing in a single company. The ETF came along in the early nineties with a shape that was pretty much the same a big basket of stocks, but now investors could buy or sell one whenever the market was open, instead of having to wait until the day's end, as a mutual fund requires. It's in the name. An ETF is a fund that's traded on an exchange. It also tended to cost less in fees and taxes than a mutual fund, and investors could more easily keep tabs on which stocks were included. Still, when ETFs first came on the market, they were greeted with a shrug, in part because the same lower fees that made them more attractive to investors made them less attractive to brokers. First Trust was born around that time in the basement of a mansion just outside Wheaton, Illinois, a prim suburban community about an hour's drive from Chicago. The company, then known as Nike Securities, was helmed by Robert Van Kempen, a veteran of the municipal bond industry. Van Kempen was known for his high intensity sales style, which had earned him the nickname the Charter, and for his immense collection of bibles. His fondness for sobriety and his interest in the apocalypse. Bowen was an alumnus of Wheaton College, a local evangelical school, where he majored in physical education and played football. He'd married his college sweetheart, became a car and a hospital orderly, tried to get into medical school, and then hopped over to finance. He got grunt jobs at a Chicago commodities brokerage and eventually landed at a municipal bond firm called Clayton Brown, where he got involved in a product known as unit investment trusts, another kind of basket often made up of bonds. Unlike mutual funds, they exist only for a fixed time and can charge new fees each time one expires and a successor takes its place. In nineteen ninety one, Bowen joined Nike Securities and helped arrange for it to buy Clayton Brown's uit business. Within a few years, he was running the firm, and by the time Van Campen died in nineteen ninety nine, it was among the biggest sellers of UITs in the US. Not long after, it rebranded to First Trust. Even after Van Campen's death, the company stayed spiritually closer to Wheaton College than to Wall Street. A prayer played over the intercom at office holiday meals, three veterans or call, and one former employee, whose Catholic says the firm had a kind of evangelical in crowd he felt excluded from. But two doctrines at least were universal. An emphasis on salesmanship and fidelity to Bowen's leadership geography gave First Trust a calling card in the flyover cities that the rest of the world didn't care about, says Ben Fulton, who worked at Nike Securities before joining a nearby rival. Advisors in places such as Dayton, Ohio, and Wichita, Kansas grew to appreciate that First Trust wholesalers actually come in there and take care of them and talk to them. Starting in two thousand and five, those wholesalers and advisors had something new to talk up. First Trusts made in ETF, which tracked the smallest publicly traded companies. ETFs were finally catching on, aided by a soft glow of democratic fairness. Whereas a given mutual fund might require hundreds or even thousands of dollars to get into and might cost more for small doll investors than bigger ones. All you needed was a brokerage account with et Trade or somewhere else to buy an ETF on the same terms as everyone else. Eventually you could use them to invest in just about anything, from crypto to uranium to psychedelics. The industry also started offering mutual fund style, actively managed ETFs, with professionals deciding what to buy and sell. But the biggest ones remained passive, simply tracking an index. As First Trust embraced ETFs, so did Black Rock, Vanguard, and State Street. Those much larger rivals began undercutting one another's fees, charging customers less and less than almost nothing. First Trust excused itself from the race to the lowest fees, sticking with comparatively high rates and winning business across the country. Anyhow, thanks in part to its salesforce, closing deals in finance requires some combination of charm, grit and mojo. It helps, too, to command the coin of the re elm stake dinners, sports tickets, and golf outings are woven tightly into the industry. To these standard touches, First Trusts salespeople added flourishes such as sessions with performance coaches and free resort stays for exclusive educational summits called sales Insight Forums. The company also made sure its salesforce always had something to sell, introducing new funds often and expanding its portfolio into the hundreds of ETFs for a handful of its products. First Trust has licensed indexes owned by Bloomberg LP, the parent company of BusinessWeek. Bowen bought controlling ownership of First Trust from the Van Campen family in twenty ten, strengthening his hold on the firm. He and his wife separated not long after, and he began dating his longtime assistant. Amid those changes, former employees say First Trust ramped up its hiring and sales efforts. One ex wholesaler recalls that wardrobes got spiffier, citing an influx of pocket squares. When Koprowski interviewed for a job as a wholesaler in twenty eleven, First Trust employees kept asking if he'd met Bowen. So I went in his office. He walks in, He was on his phone, hangs up, sits down, says so what do you think? And I said, I think you're running some kind of cult here. He goes, well, you're kind of right cultishness. Notwithstanding the job paid well, Koprowski came on board. We'll be right back with an all American finance empire. Drew billions and a regulator's attention. Welcome back to an all American finance empire drew billions and a regulator's attention. The financial advisors who buy ETFs on behalf of clients have an endless array of choices. Brochures pile up in the trash. Some industry wholesalers who push too hard are asked not to come back beyond price. The difference between a fund that sells and one that doesn't is typically performance gauging. That can be tricky, though, because there isn't always a clear way to sort various funds into obvious peer groups. One way to do it, using data from the analysis firm morning Star, shows that First trusts ETFs have been steadily mediocre over the past year or so. About half have underperformed their peers. One of the company's biggest sellers, the Value Line Dividend Index Fund, for example, charges investors more than rivals for performance that has lagged them consistently. A smaller portion of First Trust products have thrived, including about fifteen actively managed fixed income funds that have outperformed the main bond benchmark, and a small crypto offering that was wildly successful last year. Many ETFs are designed to match the returns of the market at a reasonable cost, so a significant performance gap can be a problem. It can, though, be bridged by aggressive sales, the area where First Trust has long excelled. There is no more competitive sales force than First Trusts managing director Dan Affetto, Bowen's brother in law through his second wife, told colleagues in a twenty twenty one email. FINRA's rules play a role in restraining firms aggression. Among other things, they specify that when wooing clients, salespeople can't give gifts collectively worth more than one hundred dollars per client each year in relation to the business of the recipient's employer. They can't offer meals and entertainment that are frequent or lavish enough to raise any question of propriety, a definition firms must interpret for themselves, and they can't provide food or fund precondition on achievement of a sales target, because that could coax an advisor to cater to the interests of the gift giver over the needs of the ultimate investor. The rules essentially mean an ETF wholesaler can give a financial advisor a stake, but not a freezer full of bas and not even a single crackerjack at a Cubs game if it's in exchange for a promised sale. Yet, internal emails from First Trust, sent by seasoned executives and rookies alike, often to many colleagues at a time, beginning many years ago and as recently as last year, show what could fairly be described as staffer's offering perks to win sales. About six years ago, one wholesaler told co workers he debated advisors with the prospect of invitations to the company's exclusive sales forums, which came with trips to ritzy spots such as Hawaii and Palm Beach, Florida, and included flights, accommodations, and meals. FINRA's gift rules allow for some training and education as long as it's not quid pro quo, records are kept, guests aren't paid for, and the location is appropriate to the purpose of the meeting. The wholesaler recalled in the email that when Wells Fargo advisors mentioned the forum. He said he'd love to include them, but I have very few spots for many producers. They asked for a production number of what they need to get there, he wrote, and they were soon closing a deal for us. The lucrative cousin to ETFs. In another email from around the same time, a different wholesaler recounted explaining to Morgan Stanley advisors that they'd need to add thirteen million dollars in business to win consistent access to a sought after First Trust performance coach. The advisors agreed without any hesitation. The wholesaler wrote. A Wells Fargo spokeswoman says any staffers who violate its rules on business, entertainment, educational meetings, or sales contests would face discipline up determination. Morgan Stanley declined to comment. In an especially stark email from early twenty twenty one, a First Trust executive told colleagues that the US Securities and Exchange Commission had recently visited headquarters. Staffers had been crossing the line, the executive said in the email, and he offered examples. If you do this amount of business, I can get you on the trip to Chicago, or if you do that this amount of business I will get you to this game. On top of that, colleagues were too often dropping off food or were breaking rules by simply overspending, he wrote, citing a bill for a three hundred dollars dinner on top of a three hundred dollars ticket to see a hockey game. He told wholesalers they'd be fired if they kept it up. The SEC declined to comment. With thinner regulations not specifying exactly what salespeople can spend when they're out winning business, companies have their own rules capping what money can flow between wholesalers and the advisors they're wooing. Five people who've worked for First Trust describe moves encouraged by managers and others that let wholesalers blow past those limits. Fudging expense reports by adding advisors who weren't really at an event, which would make a steep bill look more reasonable, for instance, or swapping out the name of an attendee who'd reached their annual cap for the name of one who hadn't. First Trust wholesalers who were spending freely may have taken cues from their busy photos on Bowen's Instagram feed show him with cigars on a patio, on a boat on his birthday, in front of TV sets, and by the fire, vintage wine bottles, an oversized wine bottle, sparkling wine in flutes, and sparkling wine in coops. His divorce brought the overlap between his personal and professional habits into the open and showed two how he set the tone for the company's sales culture. The proceedings began in twenty twelve and were finalized in twenty fourteen, only to be reopened later in a dispute over his payments to his ex wife. Her lawyers told the court he made at least thirty four point eight million dollars in twenty twenty two, more than Jamie Diamond was paid that year a top JP Morgan Chase, the biggest American bank. One of Bowen's lawyers told the judge his client was worth more than two hundred and thirty one million dollars as of twenty twenty one. As part of their attempt to protect the payments to Bowen's ex wife, her lawyers dug into his credit card bills to the show he was spending more on food and fun than he'd been saying they homed in on his expenses at restaurants in Naples, Florida, in twenty twenty one, asking about more than one hundred and forty seven thousand dollars at Sea Salt, an additional one hundred thousand dollars at the Continental Steakhouse, where he spent thousands of dollars at a time every week or so, and seventy thousand dollars at a seafood place called Sales Restaurant. I'm dining, I'm entertaining, he explained during a court appearance in twenty twenty two. It wasn't always clear whether Bowen was hosting friends, colleagues, or clients, but business was evidently involved in at least one big check. When one of his ex wife's attorneys asked him on the stand that same year if a seventy thousand dollars alcohol bill at the Naples Ritz Carlton was related to First Trust, he answered, m hmm. Is that a yes? The lawyer asked, that's a yes. The judge asked yes. Bowen said his expenses at one point included the thirty six thousand dollars per month in unreimbursed business related sports tickets, such as seasoned seats for the Chicago Bears and Chicago Bulls. He even spent forty eight hundred dollars at Ermez one year on a hall that included scarves he said were for workers in Chicago's hotels and restaurants. I take my best customers and entertain them at their hotels through these meetings and through dinners. He testified. Some of my best customers are high maintenance, and these people are the ones that handle the high maintenance issues. He then reached for an unusual metaphor to explain how buying expensive scarves improved the bond with these clients. I call it traveling through time together. Bowen's divorce case is still ongoing. Courthouse records suggest while FINRA's investigation carries on, First Trust keeps releasing new kinds of funds, pulling in new cash for old ones, and wooing financial advisors to buy more. Last February, a wholesaler who'd been at First Trust for more than two decades emailed his co workers about their firms enduring sales culture. We are expected to entertain. He wrote, this company was built on entertaining. It was and still is the one leg up on our competition with Nicola M. White