Investors Allege Julie Darrah Misappropriated Funds
Investors Allege Julie Darrah Misappropriated Funds
Julie Darrah (CRD #: 2102014), a previously registered broker with Mutual Securities, allegedly misappropriated client funds, according to her BrokerCheck record, accessed on November 14, 2023. Read on to learn more about her alleged conduct as a broker.
Investor Disputes
On March 13, 2025, an investor alleged that Julie Darrah sold nearly all of the securities held in their brokerage and investment advisory accounts and misappropriated their funds. The client seeks $749,200 in damages in this pending dispute.
Another dispute, filed on December 7, 2023, alleged that Julie Darrah sold almost all of the securities in their accounts, transferred the funds to the client’s bank accounts, then misappropriated $702,647.97. The client alleged that this misconduct took place between June 28, 2013 and January 4, 2022. They received a settlement of $275,000.
FINRA Rule 2150
FINRA Rule 2150 prohibits the improper use of investors’ funds.
FINRA Rule 2010
FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.
SEC Civil Action
On October 20, 2023, the SEC filed a civil action alleging Julie Darrah engaged in a scheme to misappropriate millions of dollars from the brokerage accounts of her clients. She allegedly kept the funds for herself and PC&J Joint Ventures, a restaurant company that she owns.
The scheme allegedly began while she was working for Vivid Financial Management, an investment advisory firm that she partially owned and where she served as president and Chief Compliance Officer.
The SEC alleges she targeted elderly female customers who gave her discretionary authority over their brokerage accounts. Many of these clients allegedly also appointed her to serve as a trustee over their trusts, while others allegedly gave her power of attorney.
Between November 2016 and July 2023, Julie Darrah allegedly violated her fiduciary duty by misappropriating approximately $2.25 million from the accounts of nine clients. During this period, she allegedly also submitted Forms ADV and Client Brochures to the SEC on behalf of Vivid Financial Management that contained false and misleading statements as to the firm’s custody of client assets.
The SEC alleged that Julie Darrah violated Section 17(a)(1) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder, and Sections 207 and 206(1) and (2) of the Investment Advisers Act of 1940.
The SEC further alleged that she aided and abetted Vivid Financial Management’s violation of Section 206(4) of the Investment Advisers Act and Rules 206(4)-2 and 206(4)-7 thereunder.
Securities Act of 1933
Section 17(a) of the Securities Act of 1933 prohibits the use of fraudulent schemes and devices relating to the purchase and sale of securities across state lines. In particular, it prohibits the use of false or misleading statements and the omission of facts concerning securities.
Securities Exchange Act of 1934
Section 10(b) of the Securities Exchange Act of 1934 bans manipulative, deceptive, and otherwise fraudulent activities relating to the securities business. Within this section, Rule 10b-5 bans fraudulent schemes as well as untrue statements and omissions of fact that mislead investors.
Investment Advisers Act of 1940
Sections 206(1) and (2) of the Investment Advisers Act of 1940 forbid the use of fraudulent and deceptive schemes or practices.
Rule 206(4)-2 describes the requirements investment advisers must meet in order to have custody of client funds and securities.
Rule 206(4)-7 requires investment advisers to establish and enforce policies and procedures to prevent violation of the Investment Advisers Act, conduct annual reviews of these policies and procedures, and appoint a chief compliance officer.
Section 207 prohibits investment advisers and firms from making untrue statements or willful omissions in registration applications or reports filed with the SEC.
Fiduciary Duties
Brokers are often dually registered as Registered Investment Advisers (RIAs) with the SEC. RIAs are fiduciaries, and fiduciaries are required to act in their clients’ best interests. Brokers are not fiduciaries but must abide by FINRA Rule 2111 and Regulation Best Interest.
Sanctions
According to Julie Darrah’s detailed BrokerCheck page, final judgement was rendered in this civil action on December 18, 2024. Julie Darrah was enjoined from violations of the following regulations:
- Sections 206(1) and (2) of the Investment Advisers Act of 1940
- Section 206(4) of the Investment Advisers Act and Rules 206(4)-2 and 206(4)-7 thereunder
- Section 207 of the Investment Advisers Act
She was also enjoined from directly or indirectly participating in the offer, sale or transfer of securities on behalf of another person or entity, including in the capacity of a trustee.
Further, Julie Darrah was ordered to pay the following:
- Disgorgement of $2,247,330
- $169,181.18 in prejudgement interest
- $2,247,330 civil penalty
Termination from Wealth Enhancement Advisory Services
On September 15, 2023, Wealth Enhancement Advisory Services fired Julie Darrah following allegations that she engaged in fraud and/or wrongful taking of client property. The firm also alleged that she failed to cooperate with an internal review.
Background Information
Julie Darrah 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 6 Investment Company Products / Variable Contracts Representative Examination
In the past, Julie Darrah has registered with Mutual Securities (CRD #:13092) and National Planning Corporation (CRD #:29604).
Kurta Law Can Help
If you worked with Julie Darrah and have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.
For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm that 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.