David Hixon Terminated: KlaymanToskes Investigates Securities Violations While at Morgan Stanley

July 29, 2022

Another Broker Indefinitely Suspended After Allegations of Securities Rules Violations

David Thomas Hixon (CRD# 4707468) has been indefinitely suspended from working as a financial advisor as of July 20, 2022, according to a recently issued FINRA Disciplinary Proceeding. His suspension results from his failure to provide complete responses to FINRA’s requests for documents and information connected with a FINRA investigation.

National investment fraud lawyers KlaymanToskes are investigating (“David Hixon Morgan Stanley Investigation”) former Morgan Stanley financial advisor David Hixon in light of his recent suspension from the securities industry.

Facts surrounding David Hixon’s Securities Rules Violations

David Hixon was terminated by Morgan Stanley in March 2021 over allegations that he borrowed money from a client. Following his termination, on March 17, 2021, Morgan Stanley filed a Uniform Termination Notice for Securities Industry Registration form, otherwise known as a Form U5 (“U5”). The Form U5 filing is required to be filed with FINRA within 30 days of the termination of an employee’s leaving a brokerage firm. The U5 disclosed the reason for David Hixon’s termination citing Morgan Stanley’s concerns surrounding personal loans David Hixon took from one of his customers and his request for a personal loan from a second customer and also a co-worker. Less than two weeks later, Morgan Stanley amended the U5 to add information regarding a written customer complaint alleging “misrepresentation with respect to annuity exchange”.

David Hixon’s Form U5 Triggered a FINRA Inquiry

The Form U5 that Morgan Stanley filed alerted FINRA to David Hixon’s termination and triggered a FINRA investigation of the surrounding circumstances to determine whether there were violations of federal law or FINRA rules. FINRA requested information related to the customer loan and loan repayment, requests for additional loans from another customer and co-worker, and information related to a customer complaint regarding an annuity exchange. FINRA also requested documents relating to customer loans.

David Hixon failed to respond the requests that were sent to him on three separate occasions between July 2021 and October 2021. As a result, FINRA sent a Notice of Suspension to David Hixon for his failure to respond the prior requests. The Notice of Suspension was sent a total of three times without response from Mr. Hixon. Due to his failure to respond, David Hixon was suspended by FINRA from associating with FINRA member in any capacity as of January 7, 2022.

Following his suspension, David Hixon reached out to FINRA claiming that he never received the three requests. Then, according to FINRA, in March 2022 Hixon submitted an incomplete response to FINRA’s requests and requested that his suspension be lifted. FINRA has since informed David Hixon that until he completes his responses to their requests, he will remain suspended.

Investigators for the Department of Enforcement are now seeking monetary sanctions.

David Hixon’s Securities Rules Violations

FINRA Rule 8210 gives FINRA the authority to require anyone subject to FINRA’s jurisdiction to provide written or verbal information related to an investigation, complaint, examination or proceeding. A failure to provide information and/or testimony requested is a violation of FINRA Rule 8210. David Hixon’s failure to provide complete responses to FINRA’s request for documents and information was a violation of FINRA Rule 8210.

Any violation of FINRA Rule 8210 is an automatic violation of FINRA Rule 2010 which mandates that member firms and their associated persons must “observe high standards of commercial honor and just and equitable principles of trade.”

Thus, by intentionally refusing to comply with FINRA’s investigation, David Hixon violated both FINRA Rules 8210 and 2010.

The Consequences of David Hixon’s Securities Rules Violations

As a result of his failure to provide complete responses to FINRA’s requests for documents and information, David Hixon has been suspended from associating with any FINRA member in all capacities. In other words, he is unable to work at a brokerage firm, regardless of the position.

David Hixon Morgan Stanley Investigation

Former customers of David Hixon who have experienced investment losses over $100,000, and those who have information relating to the manner in which David Hixon handled customer accounts, are encouraged to contact Lawrence L. Klayman, Esq., at 1-888-997-9956, and download our Special Investor Report.

About KlaymanToskes

KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration and litigation, on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm represents all investors who have lost money due to financial fraud or mismanagement. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.



Lawrence L. Klayman, Esq.