A former Raymond James rep suspended in May for failing to comply with an arbitration award ordering him to repay more than $2.4 million in loans that he took from the firm is in more loan-related trouble.
The rep is now facing a separate disciplinary action alleging he borrowed $400,000 from an elderly client with dementia at his previous firm, Morgan Stanley, and falsely stated on compliance questionnaires that he had not taken the loans.
Kirk James Crossen has been suspended from associating in any capacity with any Financial Industry Regulatory Authority member pursuant to FINRA Rule 9554 and FINRA’s by-laws.
"His suspension continues until the required payment is made or discharged," a FINRA spokesperson said Friday in an email.
Concealed $400K in Client Loans
Between February 2022 and January 2023, Crossen borrowed $400,000 through three loans from a customer known as Trust A while registered with FINRA through Morgan Stanley, according to a FINRA complaint dated Nov. 11.
Morgan Stanley’s written supervisory procedures did not allow Crossen to take loans from clients unless the loans were from an immediate family member and did not exceed $25,000. At the time of the loans, the client was 84 years old and suffering from the onset of dementia, according to the complaint.
"Crossen concealed the loans from the firm by falsely stating on two annual compliance questionnaires that he had not borrowed money from customers," FINRA's complaint states.
On May 8, 2023, Morgan Stanley filed a Form U5 reporting Crossen’s voluntary termination. He had joined the firm in 2016.
On April 12, 2023, Crossen registered with FINRA through an association with Raymond James & Associates. On Nov. 16 of that year, Raymond James filed a Form U5 reporting that Crossen was discharged from the firm for “[l]ack of candor relating to loan from the individual’s former client during individual’s association with prior firm,” according to the complaint.
While Crossen eventually repaid the $400,000 in loans, Trust A filed a dispute in October 2023 — which is still pending — alleging that the investment strategy that Crossen executed in the client's account was unsuitable, requesting $6 million in damages, according to Crossen's BrokerCheck profile.
On Nov. 3, 2023, Morgan Stanley filed an amended Form U5 reporting an arbitration filed by Trust A alleging that the investment strategy that Crossen executed in the customer’s account was unsuitable.
On Sept. 16, 2024, Morgan Stanley filed an amended Form U5 reporting a written complaint by a customer alleging unauthorized and unsuitable transactions in their joint accounts. The customer was Crossen's former spouse, stating that he did not manage their joint accounts "in their best interest" from 2016 through 2022 and requesting $872,431 in damages, according to BrokerCheck.
Loan Complaint Details
In September 2016, Individual A, who was 79 years old, opened a brokerage account at Morgan Stanley. The client was the beneficial owner of Trust A and was the sole authorized decision-maker on the account. Crossen was the Morgan Stanley rep responsible for the brokerage account.
For loans from immediate family members over $25,000, Morgan Stanley procedures required that reps "request written permission from the firm and not commence the lending arrangement until all necessary approvals had been received," the complaint states.
In or around 2021 and 2022, "Crossen experienced financial struggles" and confided in the client about these financial difficulties.
"To ease the financial strain, Individual A agreed to loan Crossen money through Individual A’s trust account (i.e., Trust A)," the complaint states.
On April 19, 2023, Individual A’s son made a verbal complaint to Morgan Stanley concerning the loans.
At that time, Crossen had already resigned from Morgan Stanley and joined Raymond James.
"Individual A’s son and another family member contacted Crossen about the loans on May 26, 2023," the complaint states, and on or about May 31, 2023, "Crossen repaid the $400,000 in loans, plus an additional $5,000, to Trust A."
"Shortly thereafter, in June 2023, Individual A was deemed incompetent to manage his financial affairs because of a dementia diagnosis," FINRA said.
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