New Jersey Bureau of Securities Suspends Registration of a Jersey City Broker-Dealer Agent Who Borrowed Money From Clients, Failed to Disclose Tax Liens
Newark - The New Jersey Bureau of Securities, represented by the Division of Law, has suspended the broker-dealer agent registration of Darnell Deans, of Jersey City, finding that Deans improperly borrowed money from two customers of a securities firm while it employed him, and repeatedly failed to disclose to the Bureau those loans, as well as state and federal tax liens that were entered against him.
"New Jersey's laws hold broker-dealer agents to high standards of transparency and integrity in order to protect investors," Acting Attorney General John J. Hoffman said. "Borrowing money from clients and failing to report tax liens are prohibited by the law, and will result in disciplinary action, because it is our job to make this a fair and credible playing field."
This week, the Bureau of Securities entered into a Consent Order with Deans for the suspension of his registration, as well as a civil penalty of $37,500. This action resolves the litigation regarding the Bureau's June 2013 summary revocation and penalty ordered issued against Deans.
"The Bureau of Securities took the right action in holding Darnell Deans, a broker-dealer agent, accountable for his allegedly dishonest and unethical practices," Division of Consumer Affairs Acting Director Steve Lee said.
Bureau of Securities Chief Laura Posner said, "Investors rely on the accuracy and completeness of the financial disclosures provided by agents to the Bureau. By enforcing these laws, we are helping to provide a transparent marketplace for all investors."
According to the Consent Order, in 2011 Deans borrowed at least $210,000 from one individual and $25,000 from another individual, both of whom were Deans' clients at the broker-dealer firm at which he was employed.
When Deans' firm initially discovered during a 2011 internal branch inspection that he borrowed money from the first customer, Deans stated that the loans were personal loans. However, Deans later claimed the borrowed money represented business loans to assist him in expanding expand the Wall Street branch he owns and manages. Deans failed to report the existence of these loans to his firm or the Bureau.
Additionally, between June 2004 and August 2012, Deans failed to report the existence of federal and New York State tax liens entered against him. In June 2004, New York State entered a state tax lien/judgment in the amount of $6,473 against Deans, which he later satisfied in May 2006. In June 2007, the IRS entered a federal tax lien against Deans in the amount of $122,638; that lien has not been released.
By borrowing money from clients and failing to report the federal and New York State tax liens, Deans engaged in dishonest or unethical practices in violation of New Jersey's Uniform Securities Law and regulations.
Under the Consent Order that suspends his registration, Deans is prohibited from re-applying to the Bureau of Securities for registration until two and a half years from the entry of the June 2013 summary order. He also is required to pay a civil penalty of $37,500. Should Deans apply for registration after the 30-month suspension period and the Bureau grant his registration, the registration will be subject to a Heightened Supervision Agreement (HSA) and other conditions.
Bureau of Securities Investigators Stephen Bouchard and Rosemary Gonzalez conducted this investigation on behalf of the Bureau.
Deputy Attorneys General Paul Minnefor and Emmanuel Asmar of the Securities Fraud Prosecution Section in the Division of Law represented the Bureau in this matter.
The Bureau of Securities can assist investors in determining whether those selling securities, as well as securities offered for sale, are registered or are exempt from registration. The Bureau can be contacted toll-free within New Jersey at
1-866-I-INVEST (1-866-446-8378) or from outside New Jersey at
973-504-3600. The Bureau's website is
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