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SEC Chief Administrative Law Judge Brenda
Murray, however, stopped short of levying an additional civil
fine or barring the broker, citing a 2013 U.S. Supreme Court
case that precludes such penalties for conduct that is more than
five years old when the SEC launches an enforcement case.
While Murray is unable to bar the broker, Moshe Marc Cohen,
securities industry rules could ultimately disqualify him from
holding a license because he was found to have engaged in
securities fraud.
Cohen, a former Woodbury Financial Services broker, faced off
against the SEC in a trial last August. The SEC had alleged that
Cohen, of Brooklyn, New York, deceived Woodbury to obtain
approval to sell the annuities as part of a scheme designed by a
former Los Angeles-based Morgan Stanley broker, Michael
Horowitz.
Horowitz reached a $850,749 settlement in July in which he
admitted wrongdoing.
A person who answered the phone at a number registered to Moshe
Marc Cohen in Brooklyn, New York, twice hung up.
Variable annuities are investment vehicles designed to help
retirees maintain a source of income.
Typically, insurance companies who sell the annuities will agree
to make periodic payments to people who purchase the product.
But another common practise is a death benefit, in which the
insurer pays the policyholder's beneficiary under certain
conditions.
Cohen falsified information on forms his brokerage used to
review whether the annuity was a suitable investment for the
customers, who were hospice patients. His efforts to cover up
those actions "support the finding that he understood that what
he was doing was wrong and that he acted with the clear
intention of deceiving Woodbury," Murray wrote.
Cohen's misconduct occurred in 2008, six years before the SEC's
complaint against him in 2014. Cohen has not worked in the
brokerage industry since Woodbury terminated him in 2008,
according to a regulatory filing.
A Woodbury spokesman could not be reached for comment.
(Reporting by Suzanne Barlyn; editing by Andrew Hay)
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