Sonn Law Group is investigating claims regarding Ronald Seth Cohen (CRD #2419431, Boca Raton, Florida). Cohen recently submitted an Acceptance, Waiver & Consent (“AWC”) in which he was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in any capacity for four months. See FINRA Case #2014042790701. The suspension is in effect from July 6, 2015, through November 5, 2015. Cohen was associated with Morgan Stanley from June 2009 until August 2014 when he voluntarily resigned while under internal review by the firm.
FINRA found that Cohen engaged in three outside business activities without providing prior written notice to his Morgan Stanley. In particular, from September 2011 through 2014, Cohen helped “JF,” a firm customer, establish “GTR,” a limited liability corporation located in New York City, specializing in fretted/string instruments, according to FINRA. Cohen also managed “DPGC,” a private golf course located in New Jersey, and “DFTC,” a limited liability company located in New Jersey, that acted as a wholesaler of high-end specialty rugs, art, and antique reproduction furniture. FINRA also found that Cohen actively managed the three businesses and received approximately $466,200 in compensation from their owner, “JF.” FINRA further found that Cohen made misrepresentations to Morgan Stanley regarding his participation in the outside business activities by falsely stating that he disclosed all outside business activities on two annual compliance questionnaires. In entering into the AWC, Cohen neither admitted nor denied FINRA’s findings.
FINRA Rule 3280, formerly NASD Rule 3040, provides that a broker may only sell securities with the knowledge and approval of his or her firm. When a broker sells securities without processing the order through the firm and without the firm’s permission or knowledge, this violates FINRA rules and is known as “selling away.” Federal and state law define securities broadly. Therefore, even products such as leasing arrangements or promissory notes, may be securities which require firm approval. Selling away often involves investment securities that are in the form of a private placement or other non-public investment.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Morgan Stanley may be liable for investment or other losses suffered by Cohen’s customers.
If you were a client of Morgan Stanley or Cohen, and have suffered investment losses, financial irregularities, please contact Sonn Law Group to explore your legal options. Sonn Law Group is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies. To learn more, please call us at 844-689-5754 or complete our “contact form.”