If you held a brokerage account with Kirk James Crossen at Morgan Stanley or Raymond James & Associates, Inc., you should know that FINRA has filed a complaint against Crossen alleging that he borrowed a total of $400,000 from an 84-year-old customer with onset of dementia in three separate loans, without seeking or obtaining his firm’s prior written approval, and then concealed the loans from his firm by falsely answering annual compliance questionnaires; FINRA has also suspended Crossen indefinitely, effective May 1, 2025, for failure to comply with an arbitration award or settlement agreement.
Kirk James Crossen (CRD# 2742256) is not currently registered with any FINRA member firm. According to BrokerCheck, Crossen was registered with Morgan Stanley in Indianapolis, Indiana, and subsequently with Raymond James & Associates, Inc. in Carmel, Indiana.
Important notice: FINRA issued the following complaint. Issuance of a disciplinary complaint represents FINRA’s initiation of a formal proceeding, not a decision as to any of the allegations contained in the complaint.
Allegations
The complaint alleges that between February 2022 and January 2023, Crossen borrowed a total of $400,000 from Individual A, an 84-year-old customer with onset of dementia, in three separate loans, without seeking or obtaining Morgan Stanley’s prior written approval, and that Crossen falsely answered compliance questionnaires designed to detect whether he had borrowed money from customers.
February 2022 Loan
According to the complaint, Individual A opened a trust account at Morgan Stanley in September 2016, when Individual A was 79 years old, and Crossen was the registered representative assigned to the account. According to the complaint, by 2021 and into 2022, Crossen was experiencing significant personal financial difficulties.
According to the complaint, in February 2022, Crossen borrowed $200,000 from Individual A; the parties executed a promissory note dated February 18, 2022, requiring Crossen to pay $5,000 per month toward the principal balance, with a balloon payment due on February 18, 2025, and interest at 5% per annum beginning January 1, 2023. According to the complaint, Individual A drew two checks from the trust account: one for $150,000 with the memo “Loan to Kirk Crossen” and one for $50,000 with the memo “Loan to Kirk.” According to the complaint, Crossen did not seek or obtain Morgan Stanley’s prior written approval before entering into this loan.
May 2022 Loan
According to the complaint, in May 2022, Crossen borrowed an additional $100,000 from Individual A; the parties executed a promissory note dated May 26, 2022, requiring Crossen to pay $2,500 per month toward the principal balance, with a balloon payment due on May 26, 2025, and interest at 5% per annum beginning January 1, 2023. According to the complaint, Individual A drew a check from the trust account for $100,000 with the memo “Loan to Kirk”; Crossen did not seek or obtain Morgan Stanley’s prior written approval before entering into this loan.
January 2023 Loan
According to the complaint, in January 2023, Crossen borrowed an additional $100,000 from Individual A; the parties executed a promissory note dated January 30, 2023, requiring Crossen to pay $2,500 per month toward the principal balance, with a balloon payment due on January 28, 2026, and interest at 5% per annum beginning January 1, 2024. According to the complaint, Crossen did not seek or obtain Morgan Stanley’s prior written approval before entering into this loan.
Concealment
According to the complaint, Morgan Stanley required its registered representatives to complete annual compliance questionnaires that included the question: “Have you, in the last 24 months, borrowed money/securities from anyone or any lender (excluding loans from a bank or credit union)?” According to the complaint, on April 5, 2022, after obtaining the February 2022 loan, Crossen answered “No” to that question; on March 6, 2023, after obtaining all three loans, Crossen again answered “No.”
According to the complaint, on April 19, 2023, Individual A’s son complained to Morgan Stanley about the loans; on May 31, 2023, the complaint alleges, Crossen repaid the full $400,000 principal plus an additional $5,000. According to the complaint, in June 2023, Individual A was deemed legally incompetent.
It is important to note that, as of the time of this report, the complaint is still pending. No findings of wrongdoing have been made.
BrokerCheck Disclosures
Regulatory Suspension
According to BrokerCheck, Crossen is suspended indefinitely from associating with any FINRA member firm in all capacities, effective May 1, 2025, pursuant to FINRA Rule 9554, for failure to comply with an arbitration award or settlement agreement.
Settled Customer Dispute
According to BrokerCheck, a customer dispute alleging unsuitable investment strategy and related misconduct during the period 2022 through 2023, with claimed damages of $6,000,000, was settled on March 19, 2025, for $750,000; according to BrokerCheck, Crossen’s individual contribution to the settlement was $0.
A settlement isn’t an admission of wrongdoing. FINRA is clear on that, and so are we. Firms and brokers settle disputes for all kinds of reasons: litigation costs, customer relationships, business optics. We’re not saying the settlement proves anything. What we are saying is that the record exists, it’s public, and if you had a similar experience with Kirk James Crossen, you deserve to know about it.
Pending Customer Arbitration
According to BrokerCheck, a customer arbitration (FINRA Case #25-00691) filed on April 2, 2025, alleges damages of $872,431.07; the matter is pending.
Employment Termination
According to BrokerCheck, Raymond James & Associates, Inc. discharged Crossen on October 31, 2023; according to BrokerCheck, the reason stated for the discharge was “lacked candor during inquiry into loan from individual’s former client at prior firm.”
Background
FINRA Rule 3240 governs borrowing and lending arrangements between registered representatives and their customers. The rule recognizes that these arrangements create conflicts of interest that can compromise a broker’s objectivity. A broker who owes money to a customer may be reluctant to give advice that could harm that customer’s financial position, or may continue managing an account beyond what is in the customer’s interest in order to maintain the relationship and avoid demands for repayment. To manage this risk, the rule requires that any permissible borrowing arrangement receive prior written approval from the firm before it is entered into, giving the firm the opportunity to evaluate and monitor any conflict.
The concern is heightened when the customer is elderly or cognitively impaired. An older customer with diminished capacity may not fully understand the nature of a loan to a broker, may not be in a position to demand repayment, and may be particularly susceptible to a trusted financial professional leveraging a longstanding advisory relationship.
In California, if the customer was age 65 or older at the time of the conduct, elder financial abuse laws may apply, opening the door to treble (triple) damages and attorney fee recovery.
FINRA Rule 12206 governs eligibility for arbitration claims. Investors considering a claim should consult with a securities arbitration attorney to evaluate whether their situation falls within the applicable timeframe.
Warning Signs
Some red flags that brokerage customers should watch for include: your broker has asked to borrow money from you, regardless of how the request is framed; any loan to your broker lacks a written agreement, a fixed repayment schedule, or a stated interest rate; your broker only repaid amounts owed after a family member or third party intervened on your behalf; you later learn that your broker answered “No” on firm compliance questionnaires that asked about borrowing from customers; and your broker continued to manage your account for months or years while you were owed money under an undocumented or concealed loan arrangement.
If any of these patterns apply to your account, a free consultation with a securities law attorney can help you understand whether you have a potential claim for damages.
Steps to Take Right Now
- Gather your account statements, trade confirmations, and any correspondence with your broker or firm, including emails, texts, and written materials about the investments.
- Look up your broker on FINRA BrokerCheck at brokercheck.finra.org to review their full disclosure record.
- Contact a securities arbitration attorney for a consultation to evaluate your options.
If you held a brokerage account with Kirk James Crossen at Morgan Stanley or Raymond James & Associates, Inc. and experienced similar conduct, contact Rosenberger + Kawabata to discuss your options. Rosenberger + Kawabata represents retail investors in FINRA arbitration proceedings involving broker borrowing violations, elder financial abuse, and related misconduct. Contact Rosenberger + Kawabata online for a free and confidential consultation, or call (310) 894-6921.
Sources
The information in this post comes from FINRA’s public records and BrokerCheck database. You can view the full detailed report (CRD# 2742256) here.
You can view the full January 2026 FINRA disciplinary actions report here.