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April 13, 2022 at 02:17 PM
What You Need to Know
- FINRA sanctioned an ex-Morgan Stanley rep who allegedly inflated the net worth and liquid net worth of eight clients.
- Through those actions, he circumvented the wirehouse’s solicitation restrictions and concentration limits for non-investment grade fixed income securities.
- Another ex-Morgan Stanley rep was sanctioned by FINRA for allegedly taking credit for revenue earned by other reps.
The Financial Industry Regulatory Authority suspended and fined a terminated Morgan Stanley broker over alleged violations related to non-investment grade bonds and unauthorized trading that included increasing the net worth and liquid net worth of eight clients.
By allegedly inflating the clients’ NW and LNW, Robert David Jr. circumvented the wirehouse’s solicitation restrictions and concentration limits for non-investment grade fixed income securities, according to the industry self-regulator.
Without admitting or denying FINRA’s findings, David signed a FINRA letter of acceptance, waiver and consent on March 31 in which he consented to be suspended from associating with any FINRA member in all capacities for 20 month and fined $15,000 for his alleged infractions. FINRA signed the letter on April 7.
David entered the financial services industry in October 2006, when he registered with Citigroup Global Markets as a general securities representative. He joined Morgan Stanley as a broker and rep in June 2009, according to FINRA.
On April 2, 2019, Morgan Stanley filed a Form U5 termination notice saying David was discharged “due to registered representative entering inaccurate client profile information relative to bond-related transactions and concerns that some of those transactions were not confirmed immediately beforehand,” according to the FINRA AWC letter.
On April 29, 2020, Morgan Stanley filed a Form U5 amendment in which it disclosed that an arbitration case was filed by one of its clients accusing David of making misrepresentations about corporate bond investments, according to FINRA.
Between December 2012 and September 2018, David falsified his clients’ account profile information in the wirehouse’s systems by falsely increasing the NW and LNW of eight clients and also changed the risk tolerance of one client’s account.
Also, from February 2015 through January 2019, David overconcentrated three clients’ accounts in non-investment grade fixed income securities, according to FINRA.
