Publicly available records provided by the Financial Industry Regulatory Authority (FINRA) indicate that broker/advisor, Robert David, Jr. (CRD # 5211223) was recently suspended from the securities industry by FINRA’s Department of Enforcement after an investigation into falsifying customer information, unsuitable recommendations, and unauthorized discretion.
The Law Office of Kevin J. Deloatch, Esq. is interested in speaking to investors who have complaints regarding Mr. David, Jr.
Registration Background for Robert David, Jr.
Mr. David, Jr. first became registered in the securities industry in 2006. He was most recently registered with Farmington Hills, MI based Morgan Stanley (CRD # 149777) from June 2009 to April 2019. His prior registrations include Citigroup Global Markets, Inc. (CRD # 7059) from October 2006 to June 2009.
FINRA’s Allegations Against Robert David, Jr.
According to FINRA Letter of Acceptance, Waiver and Consent (AWC) dated April 7, 2022 (No. 2019062180701), Mr. David, Jr. consented to, without either admitting to or denying, the following findings by FINRA’s Department of Enforcement:
• “Between December 2012 and September 2018, [Mr.] David falsely increased the NW and LNW of eight customers and changed the risk tolerance of one customer’s account in the firm’s systems for maintaining account profile information for brokerage accounts”;
• “[Mr.] David altered the eight customers’ NW and LNW and the one account’s risk tolerance in order to circumvent the firm’s solicitation restrictions and concentration limits for non-investment grade, fixed-income securities”;
• “By falsifying this information, [Mr.] 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”;
• “Between February 2015 and January 2019, David recommended that three of his customers invest substantial portions of their assets in non-investment grade, fixed-income securities (i.e., securities rated BB or lower by Standard & Poor’s or Ba or lower by Moody’s Investor Service)”;
• “These securities entailed a high degree of risk, including the risk of default, and subjected the customers to a substantial risk of loss”;
• [Mr.] David unsuitably overconcentrated his customers in these securities…”;
• “Between January 2015 and February 2019, David exercised discretion to effect 538 trades in the accounts of eight customers”;
• “None of the customers provided prior written authorization for [Mr.] David to exercise discretion, and Morgan Stanley did not accept any of the customers’ accounts as discretionary”; and
• By virtue of his actions, Mr. David, Jr. violated of FINRA Rule 2111 regarding suitability, FINRA Rule 2010 regarding standards of commercial honor and principles of trade and FINRA Rule 2510(b) regarding discretionary accounts.
FINRA Suspends Robert David, Jr. from Securities Industry
As a result of such violations and in addition to the above-described findings and conclusions, FINRA’s April 7, 2022 AWC also indicates that Mr. David, Jr. consented to the following sanction(s):
• A 20-month suspension from association with any FINRA member in all capacities; and
• A fine in the amount of $15,000.00.
Robert David, Jr. Has A History of Securities Industry Customer Complaints
In addition to Robert David, Jr. being suspended by FINRA from the securities industry for falsifying customer information, unsuitable recommendations, and unauthorized discretion, FINRA BrokerCheck for Mr. David, Jr. reveals that he has a history of customer complaints and/or customer-initiated arbitrations including but not necessarily limited to the following:
• On July 14, 2020 a customer initiated a written complaint against Mr. David, Jr. regarding alleged actions that occurred while he was associated with Morgan Stanley. The customer alleged failure to follow instructions. On December 17, 2020 the complaint was settled in the amount of $60,000.00.
• On April 9, 2020 a customer-initiated arbitration was commenced naming Mr. David, Jr. as a respondent regarding alleged actions that occurred while he was associated with Morgan Stanley. The customer alleged misrepresentation with respect to corporate bond investments. The customer further alleged damages in the amount of $182,000.00. On April 28, 2021 the arbitration was settled in the amount of $85,000.00.
• On March 14, 2020 a customer initiated an oral complaint against Mr. David, Jr. regarding alleged actions that occurred while he was associated with Morgan Stanley. The customer alleged unsuitability. On March 14, 2020 the complaint was settled in the amount of $35,000.00.
If you or someone you know has or had a brokerage account with David Robert, Jr. and have concerns regarding losses in your investments or possible sales practice violations including fraud, you may be entitled to recover lost funds. The Law Office of Kevin J. Deloatch, Esq. has an extensive securities law practice and over 30 years of experience on Wall Street. Call today at (646) 792-2156 for a free consultation. The time to file your claim may be limited so you should call today to avoid delay.