FINRA Suspends Robert David Following Alleged Falsification of Client Information
Robert David (CRD #: 5211223), formerly of Morgan Stanley, has been suspended by FINRA, according to his BrokerCheck record, accessed on July 1, 2022. Read on if you have questions about Robert David’s conduct as a broker.
Suspension by FINRA
An Acceptance, Waiver & Consent (AWC) agreement filed on April 7, 2022, alleges that Robert David falsified client account profile information and overconcentrated client accounts in unsuitable securities between December 2012 and September 2018 while employed by Morgan Stanley.
According to the AWC, Robert David falsely increased the net worth and liquid net worth of eight firm clients and changed the risk tolerance of one client’s account in the internal firm systems in order to circumvent Morgan Stanley’s solicitation restrictions and concentration limits for non-investment grade, fixed-income securities.
Morgan Stanley’s Written Supervisory Procedures allegedly restricted certain clients from purchasing a certain fixed-income security depending on their risk tolerance, liquid net worth, and investment objectives.
- The AWC further alleges that Robert David recommended three of his clients invest “substantial portions” of their assets in non-investment grade, fixed-income securities which involved a high degree of risk, including the risk of default and risk of loss.
- Robert David allegedly altered client account information and unsuitably over-concentrated their accounts in non-investment grade, fixed-income securities. In order to invest in riskier investments, he allegedly inaccurately increased their liquid net worth.
- Robert David also allegedly conducted 538 unauthorized trades in the accounts of eight clients between January 2015 and February 2019.
The AWC concludes that these allegations constitute violations of NASD Rule 2510(b) and FINRA Rules 4511, 2111, and 2010.
FINRA Rules 4511, 2010, and 3260
FINRA Rule 4511 requires firms to maintain accurate books and records. Any violation of this rule also violates FINRA Rule 2010, which requires brokers to uphold high standards of commercial honor and ethical conduct.
FINRA Rule 2111
FINRA Rule 2111 requires brokers to tailor their investment recommendations to suit investors’ profiles. These profiles contain information such as investors’ age, tax status, and investment goals.
Investment strategies and trading activity must also meet standards of suitability. Overconcentration of securities in any particular sector is frequently unsuitable for investors due to the increased risk involved.
Investors who feel their losses were caused by unsuitable investment or strategy recommendations may be able to recover their funds by seeking out FINRA arbitration.
Robert David consented to the following sanctions:
- $15,000 fine
- 20-month suspension
His suspension began on April 18, 2022, and ends on December 17, 2023.
You can read the full AWC here.
On July 14, 2020, an investor alleged that, among other allegations, Robert David failed to follow instructions regarding investments made in the clients’ managed account from 2017 to 2019. This dispute was settled for $60,000.
In a dispute filed on April 14, 2020, a client alleged that Robert David misrepresented corporate bond investments from September 24, 2014, through February 29, 2020. The client sought $183,000 and received a settlement of $85,000.
Two disputes filed in 2019 and 2020 alleged that, among other allegations, Robert David recommended unsuitable investments during a collective time frame of April 2015 to March 2019. Investors received settlements totaling $235,000.
FINRA Rule 2020
FINRA Rule 2020 bans the use of deceptive, manipulative, and otherwise fraudulent tactics to influence investors’ decisions, including misrepresenting information related to investments.
Discharge from Morgan Stanley Smith Barney
On March 5, 2019, Morgan Stanley fired Robert David following allegations he entered inaccurate client profile information related to bond-related transactions and concerns that some transactions were not confirmed beforehand.
Robert David has passed the following exams:
- Series 65 – Uniform Investment Adviser Law Examination
- Series 66 – Uniform Combined State Law Examination
- SIE – Securities Industry Essentials Examination
- Series 31 – Futures Managed Funds Examination
- Series 7 – General Securities Representative Examination
He previously worked for Morgan Stanley (CRD#:149777) and Citigroup Global Markets (CRD#:7059).
Kurta Law Can Help
If you worked with Robert David and you have concerns about your investments, please contact us today at 877-600-0098 or email@example.com for a free consultation.
For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.