Updated on: April 15, 2022
National investment fraud lawyers KlaymanToskes is investigating former Morgan Stanley broker Robert C. David (“Robert David Morgan Stanley Investigation”) in light of his suspension from the securities industry for falsifying customer account information and overconcentrating customer accounts.
Ex-Morgan Stanley Broker Robert David Falsified Customer Account Information and Overconcentrated Accounts
Between December 2012 and September 2018, David falsified his customers’ account profile information in the firm’s systems. Specifically, in order to circumvent the firm’s solicitation restrictions and concentration limits for non-investment grade, fixed-income securities, David falsely increased the net worth (NW) and liquid net worth (LNW) of eight firm customers and changed the risk tolerance of one firm customer’s account.
Also, from February 2015 through January 2019, David overconcentrated three customers’ accounts 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.
How Did Robert David Overconcentrate Customer Accounts?
Per a FINRA Letter of Acceptance, Waiver, and Consent, David unsuitably overconcentrated his customers as follows:
- Customer A had a moderate risk tolerance, a primary investment objective of capital appreciation, and a LNW of $800,000. David inaccurately changed Customer A’s LNW in the firm’s systems to $1.1 million in December 2012 and $2.5 million in December 2016. Between February 2015 and January 2019, David made unsuitable recommendations of non-investment grade, fixed-income securities in Customer A’s account, causing Customer A to have between 43.80 and 63.15 percent of his LNW concentrated in non-investment grade, fixed-income securities
- Customer B, a retired couple in their 70s, had a moderate risk tolerance, a primary investment objective of income, and a LNW of $2.3 million. David inaccurately changed Customer B’s LNW in the firm’s systems to $10 million in December 2016 and $15 million in April 2017. Between December 2016 and January 2019, David made unsuitable recommendations of non-investment grade, fixed-income securities in Customer B’s joint account, causing Customer B to have between 32.72 and 47.78 percent of their LNW concentrated in non-investment grade, fixed-income securities.
- Customer C had a moderate risk tolerance, a primary investment objective of capital appreciation, and a LNW of $750,000. David inaccurately changed Customer C’s LNW in the firm’s systems to $2 million in April 2013, $3.5 million in June 2015, and $5 million in June 2018. Between May 2015 and September 2018, David made unsuitable recommendations of non-investment grade, fixed-income securities in Customer C’s account, causing Customer C to have between 56.51 and 71.18 percent of his LNW concentrated in noninvestment grade, fixed-income securities
Registration History for Robert C. David
Per FINRA BrokerCheck, David worked as a broker at Morgan Stanley in the firm’s Farmington Hills, Michigan branch location from June 2009 to April 2019. Before joining Morgan Stanley, David worked as a broker for Citigroup Global Markets, Inc. He is now with Advisory Services Network, LLC as an investment adviser representative, which is based in Atlanta, Georgia.
Morgan Stanley Terminated Robert C. David
In March 2019, David was terminated by Morgan Stanley. Per FINRA BrokerCheck, the allegations related to David entering inaccurate client profile information relative to bond-related transactions and concerns that some of those transactions were not confirmed immediately beforehand.
Customer Disputes Against Robert David
Per FINRA BrokerCheck, there are five customer disputes on his record:
- $60,000 Settlement. In July 2020, a customer wrote a complaint to Morgan Stanley alleging that David failed to follow instructions with respect to investments made in his managed account. The case settled for $60,000.
- $85,000 Settlement. In April 2020, a customer filed a FINRA arbitration alleging misrepresentation with respect to corporate bond investments. The arbitration settled for $85,000.
- $35,000 Settlement. In March 2020, a customer orally complained alleging unsuitability with respect to investments. The matter settled for $35,000.
- $200,000 Settlement. In 2019, a customer filed a FINRA arbitration alleging unsuitability with respect to investments. The matter settled for $200,000.
Ex-Morgan Stanley Broker Robert David Suspended, Fined By FINRA
David consented to a 20-month suspension and to pay a $15,000 fine without admitting or denying the findings, according to the letter of acceptance.
Recover Robert David Morgan Stanley Investment Losses
If you a former customer of Robert C. David at Morgan Stanley, who was registered in Morgan Stanley’s Farmington Hills, Michigan branch location, and you suffered investment losses in excess of $100,000, contact Lawrence L. Klayman, Esq. at 1-888-997-9956.
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