Former Morgan Stanley Broker David Strnad Suspended for Making Unauthorized CD Trades

Finra suspended David Strnad for executing over 250 transactions outside the authority given by his elderly client

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David Strnad (CRD# 1982721) was a previously registered broker and investment advisor. From 1989 to 2016, Mr. Strnad was a registered representative with Morgan Stanley and its predecessor firms based in New York, California, and Tennessee. From 2016 to 2018, Mr. Strnad was registered with Wells Fargo Clearing Services in Nashville, Tennessee.

FINRA suspended Mr. Strnad from the finance industry for 18 months after an investigation revealed that he had executed over 250 transactions involving bank-issued certificates of deposit (“CDs”) beyond the scope of his authority to do so (Letter of Acceptance, Waiver and Consent №2016051569601).

According to the regulator, an elderly client verbally authorized Mr. Strnad to buy new CD issuances upon maturity of prior CD issuances in a laddered approach. The client did not authorize the sale of any CDs prior to their maturity.

From 2013 to 2015, Mr. Strnad sold the customer’s CDs prior to maturity across approximately 273 transactions, described by FINRA as “138 sales prior to maturity and 135 purchases.” Because Mr. Strnad sold the maturities almost always at a loss, the elderly customer incurred losses of approximately $100,572, net of interest. Morgan Stanley did provide compensation to the customer following a complaint.

FINRA found Mr. Strnad’s conduct to violated FINRA Rule 2010 and sanctioned him with an 18-month suspension, disgorgement in the amount of $4,268 plus interest, and a monetary fine of $10,000. Mr. Strnad agreed to the settlement without admitting or denying the findings.

Mr. Strnad’s BrokerCheck profile contains two other disclosures, both customer disputes. The first was in 2003 and alleged that Mr. Strnad engaged in unauthorized trades. It was settled for $30,000. The second was in 2016 and was the complaint filed with respect to the current allegations and FINRA investigation.

Jeffrey R. Sonn is a top-rated investment fraud lawyer with extensive experience handling unauthorized trading claims and other broker fraud cases. If you sustained major losses investing with David Strnad, Mr. Sonn is ready to help. Contact us today to schedule a free initial consultation.

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