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Recover Darryl Cohen Morgan Stanley Investment Losses

February 14, 2022

National investment fraud lawyers KlaymanToskes notifies NBA, MLB, and other professional athletes to protect themselves against securities fraud in light of the Financial Industry Regulatory Authority’s (“FINRA”) bar of Darryl Matthew Cohen (“Darryl Cohen Morgan Stanley Investigation”), who is a former Morgan Stanley financial adviser. Cohen was registered with Morgan Stanley from June 2015 to April 2021 in Westlake Village, CA, and he was a part of the firm’s Global Sports Entertainment Group. Before joining Morgan Stanley, Cohen was registered at Wells Fargo Advisors, LLC in Westlake Village, CA.

Darryl Cohen Morgan Stanley Investigation – Broker’s Background

According to FINRA BrokerCheck, Cohen was registered with Morgan Stanley in Westlake Village, California from June 2015 to April 2021. Before joining Morgan Stanley, Cohen was registered with Wells Fargo Advisors, LLC in Westlake Village, California from May 2003 to June 2015.

FINRA BrokerCheck also shows Cohen’s Securities Industry Essentials, Series 7, Series 65 and Series 63.

Morgan Stanley Discharges Darryl Cohen in March 2021

In March 2021, Morgan Stanley discharged Cohen. The BrokerCheck entry states that “allegations relating to the representative’s facilitation of outside client business and transactions not disclosed to or approved by Morgan Stanley and use of an unapproved platform to engage in inappropriate communications with clients.”

FINRA Bars Darryl Cohen

In December 2021, a FINRA Extended Hearing Panel decided that Cohen was barred from association with any FINRA member in all capacities and ordered to pay FINRA hearing costs of $2,039.08. The sanction was based on findings that Cohen failed to respond fully and completely to FINRA requests seeking documents and information in connection with an investigation into possible conversion and improper use of customer funds.

The findings stated that some of Cohen’s customers at his member firm filed arbitration claims against the firm, alleging, among other things, that Cohen had mismanaged their accounts and engaged in selling away through the facilitation of loans to third parties. Those claims prompted FINRA to commence the investigation. Subsequently, additional customers whose accounts had been serviced by Cohen filed claims. Most of the complaining customers were current and former professional athletes.

FINRA staff had concerns about unusual or suspicious money movement. Initially Cohen provided some, but not all, of the documents and information requested by FINRA.

FINRA alleged that Cohen did not produce three categories of requested documents that were critical to FINRA’s investigation: communications regarding his customers and business, including electronic communications such as emails, texts, and social media posting; bank account statements; and telephone logs and records.

Cohen’s BrokerCheck for this regulatory event states that “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 February 16, 2022.”

Customer Disputes Against Cohen

There are 4 pending Customer Disputes on Cohen’s BrokerCheck as of the date of this writing:

  • $2,000,000 in Damages were requested relating to allegations that payments were made without prior approval from Claimants’ accounts, and Claimants were encouraged to use a Liquidity Access Line for real estate and life insurance policies for which they now claim they hold no interest.
  • $100,000 in Damages were requested relating to allegations concerning, among other things, misrepresentation with respect to recommendation for outside business investment utilizing a line of credit from the firm.
  • $2,300,000 in Damages were requested relating to allegations concerning, among other things, unsuitability with respect to investments and Credit line.
  • $5,000,000 in Damages were requested relating to allegations concerning, among other things, that payments were made without prior approval from their accounts and that Claimants were encouraged to use a Liquidity Access Line for real estate and life insurance policies for which they now claim they hold no interest.

Darryl Cohen Morgan Stanley Investigation

Former customers of Darryl Cohen with losses in excess of $250,000, and those who have information relating to the manner in which he handled customer accounts, are encouraged to contact Lawrence L. Klayman, Esq., at (561) 542-5131, and download our Special Investor Report.

About Us

KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. KlaymanToskes has recovered more than $228 million for investors in FINRA arbitrations. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.