Background Of Cynthia Diane Cowden
Cowden first associated with a FINRA member firm in June 1990. She registered with
FINRA as: an Investment Company and Variable Contracts Products Representative in
June 1990; a Direct Participation Programs Representative in September 1990; a General
Securities Representative in June 1999; a General Securities Principal in August 1999;
and a Municipal Fund Securities Principal in August 2003. Most recently, Cowden was
associated with NPB Financial Group, LLC and registered with FINRA from January
2013 through August 2020, when her association with NPB and registration with FINRA
was terminated. Cowden has not been registered or associated with any other FINRA
member since August 2020.
Although Cowden is not currently registered or associated with a FINRA member firm,
FINRA retains jurisdiction over her pursuant to Article V, Section 4 of FINRA’s ByLaws.
Activity(s) Reported – Cynthia Diane Cowden (CRD No. 2054676)
This matter was initiated based on a customer complaint against Cowden submitted by a
married couple to FINRA’s Senior Helpline regarding Cowden’s unsuitable
recommendations, as described below. While FINRA was investigating that complaint,
another customer called the Senior Helpline and made a similar suitability complaint
against Cowden regarding another unsuitable recommendation, as described below.
Unsuitable Recommendations in High-Risk Investments
FINRA Rule 2111(a) requires that firms and associated persons have a “reasonable basis
to believe that a recommended transaction or investment strategy involving a security or
securities is suitable for the customer, based on the information obtained through the
reasonable diligence of the [firm] or associated person to ascertain the customer’s
investment profile,” which includes “the customer’s age, other investments, financial
situation and needs, tax status, investment objectives, investment experience, investment
time horizon, liquidity needs, [and] risk tolerance.” A recommendation may also be
unsuitable if it results in an undue concentration in a particular security or category of
securities. FINRA Rule 2010 requires associated persons to observe “high standards of
commercial honor and just and equitable principles of trade” in the conduct of their
business. A violation of FINRA Rule 2111 is also a violation of Rule 2010.
The three senior customers who were the subject of Cowden’s unsuitable
recommendations during the Relevant Period included one married couple and one other
customer, all of whom were California residents with little investment experience.
The couple were retirees, had a combined net worth of approximately $1.0 million, a
combined liquid net worth of $300,000, a combined annual income of $23,000 and a
moderate risk tolerance. Their investment objective included a stable, balanced portfolio,
as well as income and liquidity, because they were relying on the investment to
supplement their income. During the Relevant Period, Cowden recommended two
purchases for the couple, totaling $231,200, of NorthStar Real Estate Income Trust
(NorthStar), an illiquid, high risk, non-traded REIT. The NorthStar investments were not
suitable given the couple’s investment objective, circumstances, and financial needs. In
addition, the investments comprised over 20% of the couple’s net worth, more than
double NorthStar’s 10% of net worth concentration limit for California investors.
NorthStar’s illiquidity and high risk level also far exceeded the couple’s moderate risk
The third customer, who was still working, had a net worth of approximately $400,000, a
liquid net worth of $300,000, an annual income of $60,000, and a low to moderate risk
tolerance. The customer’s investment objective included slow growth and a reasonable
rate of return. The customer also wanted liquidity. During the Relevant Period, Cowden
recommended that the customer purchase $250,000 of Priority Income Fund, Inc.
(Priority), a speculative, high risk, illiquid, closed-ended mutual fund. The Priority
investment was not suitable given the customer’s investment objective, circumstances,
and financial needs. In addition, the $250,000 investment in Priority comprised an
unsuitable concentration of over 50% of the customer’s net worth. Priority’s illiquidity
and high risk level also far exceeded the customer’s low to moderate risk tolerance.
Therefore, Cowden violated FINRA Rules 2111 and 2010.
False Testimony During FINRA’s Investigation
FINRA Rule 8210 requires member firms and associated persons to provide information
and documents to FINRA during the course of an investigation. Under Rule 8210,
FINRA staff also has the right to require associated persons to testify under oath “with
respect to any matter involved in the investigation.” Inherent in that obligation to testify
is the obligation to testify truthfully. A violation of FINRA Rule 8210 also violates
FINRA Rule 2010. Providing false or misleading testimony to FINRA violates FINRA
Rules 8210 and 2010.
In February 2019, during her on-the-record testimony to FINRA, Cowden provided false
testimony to FINRA. Specifically, Cowden falsely testified that the three customers’
assets and income were far in excess of the actual amounts—financial information which
made the customers appear qualified to invest in NorthStar and Priority.
Therefore, Cowden violated FINRA Rules 8210 and 2010.
Can you expose the broker trying to trick you?
FINRA offers the free web tool BrokerCheck, which allows users to check a broker’s credentials, registration, and employment history. The disclosure part of BrokerCheck includes information on client conflicts, disciplinary proceedings, and specific financial and legal issues on the broker’s record.
Penalties And Sanctions
- A bar from associating with any FINRA member in any capacity.
Respondent understands that if she is barred or suspended from associating with any
FINRA member, she becomes subject to a statutory disqualification as that term is
defined in Article III, Section 4 of FINRA’s By-Laws, incorporating Section 3(a)(39) of
the Securities Exchange Act of 1934. Accordingly, she may not be associated with any
FINRA member in any capacity, including clerical or ministerial functions, during the
period of the bar or suspension. See FINRA Rules 8310 and 8311.
Recent Illegal Activity(s)Of The Individual/Firm
Between August 2016 and December 2017 (the Relevant Period), Cowden recommended
unsuitable high risk, speculative investments to three senior customers, in violation of
FINRA Rules 2111 and 2010. During the investigation of this matter, Cowden also
provided false testimony to FINRA regarding the customers’ assets and income, in
violation of FINRA Rules 8210 and 2010.
How To Spot A Fraud Finance Advisor (Infographic)
Help For Victims Of Cynthia Diane Cowden
If you have lost funds because of misrepresentation, unsuitable investment, or unsuitable investment strategy from Cynthia Diane Cowden. Then you can take legal action and get justice. Fraud, Malpractice & dereliction of duty should not be taken lightly, especially in this industry. We highly suggest that you notify authorities or seek legal action if your financial advisor or brokerage firm fails to abide by FINRA’s rules are regulations.
Financial advisors are regulatory & legally obligated to suggest (recommend) the most suitable investments/investment strategies to their clients. Their suggestions should have their client’s best interests and should be appropriate for their client’s goals and needs. Similarly, the brokerage firm which hires financial advisors also has a regulatory & legal obligation to keep a close watch and supervise their Financial Advisors’ practices & behavior. They need to make sure that the financial advisor is not being manipulative or having an unreasonable bias towards certain investments. If the financial advisor and/or the brokerage firm breaches these duties, then the client/customer may be entitled to a full or partial recovery of their losses.
Financial advisors need to have the interest of their clients when giving suggestions related to investments and investment strategies. Reasonable basis suitability requires the advisor to do their best to analyze & identify the risks and rewards associated with their suggested investment and/or investment strategy.
Cynthia Diane Cowden has been involved in fraudulent activities and is an unsafe professional entity. We strongly recommend you avoid any association with such a shady figure.
- Shady Activity
- Swindling Activity Reported By Clients
- Under Govt. Organization's Radar
- High Risk of Fraud