Former Morgan Stanley Broker David Strnad Engaged in 100s of Unauthorized CD Trades In Elderly Customer’s Account
Posted on Saturday, July 20th, 2019 at 8:14 pm
Former Morgan Stanley broker David Strnad (CRD# 1982721) was suspended by FINRA for 18 months regarding unauthorized trades in an elderly customer’s accounts. Strnad was registered with Wells Fargo Clearing Services, LLC in Nashville, Tennessee from 2016 to 2018, and previously with Morgan Stanley in Franklin, Tennessee from 2009 to 2016.
In June 2019, FINRA sanctioned Strnad to a $10,000 civil and administrative penalty, $4,268.73 in disgorgement, and suspended him for 18 months. According to Strnad’s Brokercheck profile, he consented to the sanctions and to the entry of findings that he executed unauthorized transactions involving bank-issued certificates of deposit (CDs) in accounts of an elderly customer. “The findings stated that although the customer verbally authorized Strnad to purchase new CD issuances after maturity of prior CD issuances, he exceeded the scope of his authority by selling CDs held by the customer prior to maturity, nearly always at a loss, and using the proceeds to purchase new CDs for the customer. Strnad execution of these transactions in the customer’s accounts caused him to incur losses of approximately $100,572, net of interest. After the customer’s daughter complained on his behalf, Strnad’s member firm provided compensation to the customer. Strnad inaccurately marked some of these transactions as “unsolicited.” Strnad’s trading caused the customer to pay $4,268.73 in unnecessary commissions.”
Strnad has been the subject of two customer complaints between 2003 and 2016, according to his CRD report:
September 2016. “Client’s daughter alleges churning with respect to the trading of certificates of deposit in her father’s trust accounts. 2013-2015 alleged damages unspecified.” The case was settled for $89,646.40.
March 2003. “Alleges that Strnad did unauthorized trades.” The customer sought $500,000 in damages and the case was settled for $30,000.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Morgan Stanley may be liable for investment or other losses suffered by Strnad’s customers.
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