Our firm is investigating J.P. Morgan Securities LLC broker and investment adviser Cosmin Cotet (CRD# 6740826) of New York, New York for potential investment-related misconduct tied to alleged unauthorized trading in a managed account while he was associated with Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Financial Advisor’s Career History
According to FINRA BrokerCheck, Cosmin Cotet is currently registered as a General Securities Representative and investment adviser representative with J.P. Morgan Securities LLC (CRD# 79), based out of the firm’s 270 Park Avenue branch office in New York, New York. He has been registered with J.P. Morgan Securities LLC since March 9, 2022, and is approved with 27 self-regulatory organizations and licensed in 53 U.S. states and territories.
Mr. Cotet previously was registered as a broker and investment adviser with Merrill Lynch, Pierce, Fenner & Smith Incorporated (CRD# 7691) in New York, New York from February 2017 through February 2022. His employment history also lists investment-related positions with Bank of America, N.A. as a financial advisor and JPMorgan Chase Bank, N.A. as an SC Banker in New York, New York.
Cosmin Cotet Fraud Allegations and Investor Complaints Explained
FINRA BrokerCheck for Cosmin Cotet discloses one settled customer dispute arising from his time at Merrill Lynch, Pierce, Fenner & Smith Incorporated. The firm reported that a customer alleged unauthorized trading in a managed/wrap account on November 8, 2021, which purportedly resulted in unknown tax consequences.
The complaint was received on February 13, 2022, and was later resolved as a settled customer dispute. Merrill Lynch reported that the matter was settled on March 22, 2022, for $42,807.97, with no financial contribution by Mr. Cotet himself. The BrokerCheck report notes that the alleged damages were “not specified” even though a settlement was paid to the customer.
FINRA’s disclosure matrix for Mr. Cotet reflects this single “Customer Dispute – Settled” event and does not list any pending customer complaints, regulatory actions, criminal matters, terminations, or bankruptcy disclosures.
Key Disclosure Details (Customer Dispute – Settled)
- Type of event: Customer dispute – settled
- Reporting sources: Firm and broker
- Employing firm at time of alleged conduct: Merrill Lynch, Pierce, Fenner & Smith Incorporated
- Allegation: Customer alleges unauthorized trading on November 8, 2021, resulting in unknown tax consequences
- Product type: Managed/Wrap Accounts (In-House Money Manager)
- Date of alleged misconduct: November 8, 2021
- Date complaint received: February 13, 2022
- Status: Settled (not pending; status date March 22, 2022)
- Alleged damages: Recorded as $0.00 with narrative that damages were not specified
- Settlement amount: $42,807.97 paid to the customer
- Individual contribution: $0.00 – Cosmin Cotet did not personally contribute to the settlement
- Broker statement: Mr. Cotet states he was not involved in settlement discussions and was not asked to contribute financially
While a settlement does not, by itself, constitute an admission of liability or a finding of wrongdoing, allegations of unauthorized trading are serious and can indicate violations of industry rules and firm policies concerning customer authorization, supervision, and fair dealing with clients. Investors who experienced similar issues with managed accounts or unauthorized trades during Mr. Cotet’s tenure at Merrill Lynch or J.P. Morgan Securities LLC may have viable claims to recover their losses through FINRA arbitration.
To obtain a copy of Cosmin Cotet’s FINRA BrokerCheck report, visit this link.
Robert Wayne Pearce Is Committed to Recovering Your Investment Losses
Allegations of unauthorized trading such as those described in the Merrill Lynch customer dispute involving Mr. Cotet often raise concerns under FINRA Rule 2010, which requires brokers to “observe high standards of commercial honor and just and equitable principles of trade.” When a broker places trades in a managed account without the customer’s authorization or contrary to the client’s reasonable expectations, that conduct can be inconsistent with the ethical standards embodied in Rule 2010.
In practical terms, unauthorized trading may show that a broker put firm or personal interests ahead of the client’s best interests, failed to communicate material risks, and disregarded the customer’s right to control their own account. If proven in arbitration or enforcement proceedings, such conduct would be viewed as inconsistent with maintaining just and equitable principles of trade under Rule 2010.
Similarly, alleged unauthorized trading in a managed or wrap program can implicate FINRA Rule 3260, which governs discretionary accounts and the requirement for written authorization to exercise trading discretion. Rule 3260 provides that a broker generally may not exercise discretion in a customer’s account without the customer’s prior written authorization and the firm’s approval.
In the dispute involving Mr. Cotet, the customer’s allegation that trades were executed without authorization raises questions about whether the proper written discretionary authority existed, whether any discretion was exercised within the scope granted by the client, and whether the firm adequately supervised the account activity. If trades were executed without required authorization, that conduct would be inconsistent with Rule 3260’s protections against unauthorized transactions in customer accounts.
Customer complaints about unexpected trading activity and “unknown tax consequences,” as reported in the disclosure involving Mr. Cotet, can also raise issues under FINRA Rule 2090 (Know Your Customer) and related suitability and supervision standards. Rule 2090 requires firms and associated persons to use reasonable diligence to know the essential facts concerning each customer and the authority of each person who acts on behalf of the customer.
When a broker enters trades that may generate tax liabilities or capital gains without confirming the customer’s objectives, risk tolerance, and tax situation—or without ensuring that the customer has authorized the strategy—those actions may be inconsistent with the obligation to “know your customer.” In the context of managed and wrap accounts, failing to align trading activity with the client’s profile and instructions may also support claims for damages in FINRA arbitration based on violations of Rule 2090 and related supervisory duties.
For over 45 years, Robert Wayne Pearce has helped investors recover losses caused by broker fraud, negligence, and unsuitable recommendations. His firm, The Law Offices of Robert Wayne Pearce, P.A., represents clients nationwide on a no-recovery, no-fee basis. Call (800) 732-2889 or email pearce@rwpearce.com for a free case review with an experienced securities attorney.