FINRA Suspends Former Morgan Stanley Advisor Who Circumvented Sales Limits

Posted on April 19th, 2022 at 1:36 PM
FINRA Suspends Former Morgan Stanley Advisor Who Circumvented Sales Limits

From the Desk of Jim Eccleston at Eccleston Law:

The Financial Industry Regulatory Authority (FINRA) has imposed a $15,000 fine and 20-month suspension on a former Morgan Stanley advisor who allegedly falsified client information in order to circumvent sales restrictions on volatile fixed income investments. 

The former Michigan-based advisor, Robert David Jr., consented to the fine and suspension without admitting or denying any of FINRA’s investigatory findings. According to FINRA, David Jr. falsified information in eight client accounts between 2012 and 2018 by increasing their liquid-net-worth or changing their risk tolerance so that they were permitted to buy “non-investment fixed income securities.” 

According to the settlement, three of the clients were over-concentrated in securities, such as one client who had 71% of their liquid net worth invested in speculative bonds. Additionally, FINRA alleged that David Jr. failed to obtain approval from the eight clients before engaging in nearly 538 discretionary trades in non-discretionary accounts between January 2015 and February 2019. Morgan Stanley fired David Jr. in March 2019 after he was employed with the firm for nearly nine years. 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

 
 
 

Tags: eccleston law, finra, morgan stanley

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