Darryl Cohen Barred for Allegedly Failing to Respond to FINRA Requests for Information
Darryl Cohen (CRD #: 2786613), a broker formerly registered with MorganStanley, was recently barred for allegedly failing to respond to FINRA requests for information, according to his BrokerCheck Record, accessed on January 25, 2022.
FINRA Allegations
On December 30, 2021, FINRA alleged that Darryl Cohen failed to respond fully and completely to multiple FINRA Rule 8210 requests seeking documents and information. FINRA sought the documents and information in connection with an investigation into possible conversion and improper use of customer funds.
The findings stated that some of Darryl Cohen’s customers at his member firm filed arbitration claims against the firm, alleging, among other things, that Darryl Cohen had mismanaged their accounts and engaged in selling away through the facilitation of loans to third parties.
FINRA Rule 8210 requires members to provide information under oath, if requested, regarding any matter that pertains to an investigation, complaint, examination, or proceeding.
A violation of FINRA Rule 8210 is also a violation of FINRA Rule 2010, which requires member firms and their associated persons to “observe high standards of commercial honor and just and equitable principles of trade.”
Sanctions
Darryl Cohen was barred from association with any FINRA member in all capacities and ordered to pay FINRA hearing costs of $2,039.08.
Darryl Cohen’s failure to respond fully and completely to FINRA’s requests stymied an investigation into very serious potential misconduct. If no further action is taken, the decision will become final on February 16, 2022.
Investor Disputes
Between 2020 and 2021, Darryl Cohen was involved in multiple investor disputes alleging possible conversion and improper use of customer funds. Some of Darryl Cohen’s customers at his previous member firm filed arbitration claims against his member firm, alleging, among other things, that Darryl Cohen had mismanaged their accounts and engaged in selling away through the facilitation of loans to third parties.
- In 2021, two investor disputes alleged that Darryl Cohen made payments from his client’s accounts without prior approval and encouraged them to use a Liquidity Access Line for real estate and life insurance policies. According to the investors, the investments currently hold no interest. The investors are seeking a total of $7,000,000.
- On April 20, 2021, another investor alleged misrepresentation with respect to Darryl Cohen’s recommendation for outside business investment utilizing a line of credit from the firm. The investor is seeking $100,000.
- On April 6, 2021, an investor dispute was filed against Darryl Cohen. The investors alleged unsuitability with respect to investments and credit lines. The investors are seeking $2,300,000.
Settled Disputes
On June 2, 2020, an investor accused Darryl Cohen of alleged unsuitability with respect to the use of a Liquidity Access Line to loan funds to outside business entities. The dispute settled for $125,000.
Employment Termination
On March 9, 2021, Darryl Cohen was fired from his position at Morgan Stanley following allegations that he facilitated outside client businesses and transactions not disclosed to or approved by Morgan Stanley. The allegations further state that Darryl Cohen used an unapproved platform to engage in inappropriate communications with clients.
Recommending outside investments without firm authorization is a type of misconduct called “selling away.” Investors are only supposed to recommend securities authorized by their firm. If they want to recommend investments outside of their firm, they need special authorization.
Darryl Cohen also allegedly violated FINRA Rule 3110, which requires that stockbrokers only communicate with investors using approved messaging applications so that the firm can access those communications for review. Brokerage firms are required to review communications to ensure that stockbrokers are complying with applicable securities rules and regulations.
Background Information
Darryl Cohen has passed the following exams:
- Series 65 – Uniform Investment Adviser Law Examination
- Series 63 – Uniform Securities Agent State Law Examination
- SIE – Securities Industry Essentials Examination
- Series 7 – General Securities Representative Examination
He has also worked with the following firms:
- Wells Fargo Advisors (CRD#:19616)
- Merrill Lynch, Pierce, Fenner & Smith Incorporated (CRD#:7691)
Kurta Law Can Help
If you have been victimized by Darryl Cohen as a broker, don’t hesitate to get in touch with us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.
For nearly 20 years, Kurta Law has advocated for investors to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.