Former Morgan Stanley Broker Kirk J. Crossen Faces FINRA Complaint Over $400,000 in Undisclosed Loans from Elderly Client

Kirk J. Crossen (CRD #2742256), a former broker registered with Morgan Stanley and later Raymond James & Associates, is facing a Financial Industry Regulatory Authority (FINRA) disciplinary complaint filed in November 2025.

The complaint alleges that Crossen borrowed $400,000 from an 84-year-old client suffering from the onset of dementia and then concealed the loans from his firm by submitting false compliance forms.

According to FINRA, the loans — made through the client’s trust account (“Trust A”) — violated both FINRA Rule 3240, which prohibits borrowing from customers outside approved relationships, and Rule 2010, which requires brokers to uphold high standards of commercial honor. 

Impermissible Borrowing Allegations

Between February 2022 and January 2023, Crossen allegedly borrowed $400,000 across three separate transactions from a Morgan Stanley client’s trust account. Each loan was documented by a promissory note and deposited directly into Crossen’s personal bank account.

• February 2022: $200,000 loan
• May 2022: $100,000 loan
• January 2023: $100,000 loan

At the time, Morgan Stanley’s written supervisory procedures strictly prohibited borrowing from customers unless they were immediate family members, and no such relationship existed between Crossen and the client.

The loans carried 5% annual interest and were structured with monthly payments and final balloon payments several years out, suggesting an extended personal lending arrangement rather than a short-term emergency loan.

FINRA alleges that these actions violated both Rule 3240 (impermissible borrowing from a client) and Rule 2010 (standards of commercial honor and just principles of trade).

False Statements and Concealment

FINRA alleges Crossen took steps to hide the loans from Morgan Stanley by making false statements on internal compliance documents. Specifically, the complaint states that Crossen completed annual compliance questionnaires in April 2022 and March 2023 and answered “No” when asked whether he had borrowed money from anyone outside of banks or credit unions. FINRA contends these answers were false because the loans came from a customer’s trust rather than a traditional financial institution.

FINRA charges these alleged misrepresentations as separate violations of FINRA Rule 2010, which requires brokers to observe high standards of commercial honor and just and equitable principles of trade. In other words, even apart from the alleged improper borrowing itself, FINRA claims Crossen’s lack of candor on compliance forms independently violated industry rules.

Discovery and Repayment

According to the complaint, the matter came to light in April 2023, when the client’s son discovered the loans and raised the issue with Morgan Stanley. FINRA states that Crossen then repaid the full $400,000, along with $5,000 in interest, by May 31, 2023. The complaint further notes that shortly after the repayment, the elderly client was declared incompetent due to dementia. 

FINRA also notes that Morgan Stanley and Raymond James later filed Form U5 disclosures indicating Crossen’s termination involved “lack of candor” related to the loans; Raymond James reportedly discharged him on November 16, 2023. The complaint further states that Crossen has been suspended since May 2025 under FINRA Rule 9554 for failing to comply with an arbitration award and remains under FINRA jurisdiction, where he may face sanctions under Rule 8310, including fines, suspension or a permanent bar.

What Investors Should Know

Borrowing money from a client can create a serious conflict of interest, especially when the client is elderly or may be vulnerable, because it blurs the line between professional advice and personal financial benefit. FINRA rules and many firm policies restrict or prohibit these arrangements precisely because they can pressure clients and compromise objective recommendations.

FINRA also treats alleged concealment as a major concern. If a broker misstates or omits information on compliance questionnaires, it can prevent the firm and regulators from identifying potential misconduct early and evaluating whether clients are being placed at risk.

It’s also important to understand that repayment does not automatically erase the issue. Even if the client ultimately gets the money back, the transaction may still violate firm policy and FINRA standards depending on the circumstances and the broker’s disclosures.

For investors, the practical takeaway is to stay proactive. Review statements and confirmations regularly, and if a representative makes any unusual financial request, such as asking for a loan or personal payment, contact the firm directly (such as a branch manager or compliance department) to document the issue and confirm next steps.

Protect Your Rights as an Investor

If you believe a broker engaged in improper borrowing, undisclosed personal financial arrangements or other conduct that puts your interests at risk, it may be worth reviewing your options. These situations can be especially concerning when they involve elderly clients or requests made outside normal account activity.

Sonn Law Group represents investors nationwide in matters involving broker misconduct and FINRA disputes. We handle cases on a contingency fee basis, so you pay nothing unless we recover compensation for you.

To request a confidential case review, call 833-912-3000 or complete our online consultation form.