Arthur T. Roth
Arthur Thomas Roth | |
|---|---|
| Born | 22 December 1905 |
| Died | 17 September 1997 (aged 91) |
| Occupation(s) | Banker, business executive |
| Known for | CEO of Franklin National Bank; significant influence on banking in Long Island |
Arthur Thomas Roth (December 22, 1905 – September 17, 1997) was a prominent figure in American banking, often referred to as "Mr. Long Island" due to his significant influence on the development of banking in Long Island from the mid-1920s through the 1970s. Roth began his career at Manufacturers Hanover Trust Company as a messenger at the age of 17 and rapidly progressed within the institution. In 1934, he joined Franklin National Bank as a cashier and rose to become its chief executive officer by 1946.
During Roth's tenure, Franklin National Bank expanded to rank as the eighteenth largest bank nationwide. The institution was at the forefront of introducing credit cards and pioneered drive-in teller services, despite encountering operational difficulties with these innovations. In 1964, Franklin extended its reach by opening branches in New York City to rival metropolitan banks that offered international banking services. However, exposure to competitive loan pricing and elevated deposit costs created vulnerabilities for the bank in an emerging computerized interest rate environment.
Roth was removed from his CEO position in July 1968 amid mounting loan defaults and declining stock value. His dismissal was partly driven by adverse media coverage related to his son Donald’s real estate transactions in Suffolk County and internal opposition from then-president Harold V. Gleason, who resisted Roth’s aggressive expansion into New York City’s real estate market. Roth maintained ties with Webb and Knapp, developers of Roosevelt Field. As property values dropped, Franklin National Bank faced millions in potentially non-performing loans.
By 1970, after a merger with Federation Bank, Roth departed following the board’s refusal to reappoint him. Harold V. Gleason succeeded him as chairman and CEO and brought Laurence Tisch onboard as vice chairman due to Tisch’s ownership of 22% of shares. Tisch later divested his stake in 1972 to Michele Sindona amid FDIC concerns regarding conflicts of interest. Sindona, famously known as "The Pope's Banker," was attracted by prospects for facilitating money laundering for his Italian clientele.
Sindona’s participation, enabled by relaxed fiduciary regulation under the Nixon administration, complicated the situation for Tisch and contributed to Franklin’s operational instability. Under the leadership of Gleason and Sindona, the bank pursued aggressive real estate investments, engaged in financial misreporting, foreign currency dealings, and mismanagement that ultimately led to Franklin National Bank’s collapse on October 8, 1974—the largest bank failure in U.S. history at that time. Prior to the collapse, Sindona transferred substantial funds overseas, leaving the bank severely undercapitalized. Its remaining assets were subsequently acquired by European-American Bank & Trust Company.
Following these developments, Arthur Roth and his son Donald established the Bank of Suffolk County located in Stony Brook, New York.