INVESTORS: Former Morgan Stanley broker Robert C. David was suspended by FINRA following allegations that he falsified his customers’ account profile information to circumvent firm restrictions.
Robert C. David (CRD#:3071833) was registered as a broker with Morgan Stanley from 2013 until 2019. Previously, David was registered as a broker with Citigroup Global Markets from 2006 until 2009.
David has seven disclosures on his BrokerCheck report. One customer dispute filed against David was closed with no action taken.
April 2022 Regulatory Judgment
Initiated By: FINRA
Allegations: Without admitting or denying the findings, David consented to the sanctions and to the entry of findings that he falsified his customers’ account profile information. The findings stated that David falsely increased the net worth and liquid net worth of eight customers and changed the risk tolerance of one customer’s account in his member firm’s systems for maintaining account profile information for brokerage accounts. David did this in order to circumvent the firm’s solicitation restrictions and concentration limits for non-investment grade, fixed-income securities. By falsifying this information, David made the customers eligible for purchases of non-investment grade, fixed-income securities, for which they would have otherwise been ineligible under the firm’s procedures. As a result, David caused the firm to maintain inaccurate books and records. The findings also stated that David overconcentrated three customers in non-investment grade, fixed income securities. Specifically, David concentrated between approximately 32.72 and 71.18 percent of these customers’ liquid net worth in non-investment grade, fixed-income securities, which was inconsistent with the customers’ investment objectives and risk tolerances. These securities entailed a high degree of risk, including the risk of default, and subjected the customers to a substantial risk of loss. The findings also included that David exercised discretion in eight customers’ accounts without prior written authorization.
Resolution: Acceptance, Waiver & Consent (AWC)
Sanctions: Civil and Administrative Penalty(ies)/Fine(s)
Registration Capacities Affected: All Capacities
Duration: 20 months
Start Date: 4/18/2022
End Date: 12/17/2023
July 2020 Customer Dispute
Allegations: Client alleged, inter alia, failure to follow instructions with respect to investments made in his managed account 2017-2019 damages unspecified
Settlement Amount: $60,000.00
April 2020 Customer Dispute
Allegations: Client alleged, inter alia, misrepresentation with respect to corporate bond investments – 9/24/2014 to 02/29/2020
Damage Amount Requested: $183,000.00
Settlement Amount: $85,000.00
March 2020 Customer Dispute
Allegations: Client verbally alleged, inter alia, unsuitability with respect to investments. – April 2015- March 2019
Settlement Amount: $35,000.00
May 2019 Customer Dispute
Allegations: Claimants allege, inter alia, unsuitability with respect to investments Mar 2017 – Mar 2019
Settlement Amount: $200,000.00
March 2019 Employment Separation After Allegations
Firm Name: MSSB
Termination Type: Discharged
Allegations: Allegations related to registered representatives entering inaccurate client profile information relative to bond-related transactions and concerns that some of those transactions were not confirmed immediately beforehand.
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