David Strnad, a longtime broker, has been suspended by the Financial Industry Regulatory Authority (FINRA) for 18 months. According to his BrokerCheck record, in 2016, the daughter of a client accused Strnad of churning in her father’s account while he was a registered Morgan Stanley representative. Following the allegations, FINRA opened a probe into the matter.
The self-regulatory authority (FINRA) found that Strnad made over 270 trades involving CDs in the account of one elderly customer between 2013 and 2015. While the client had given the former Morgan Stanley broker permission to purchase the CDs, Strnad allegedly exceeded the authority granted to him when he sold the CDs before they matured and used the money made from those transactions to purchase more CDs for the client.
As a result, said FINRA, the client ended up paying nearly $4300 commissions that were not warranted. Morgan Stanley has since paid that money back to the client.
With 28 years in the industry, Strnad was most recently a Wells Fargo (WFC) broker and also previously a Citibank (C) broker. His BrokerCheck record shows that the investor churning case that led to the FINRA probe resulted in a $90K settlement. He is now settling the FINRA probe but without denying or admitting to the findings.
A 2003 investor claim, also related to Strnad’s time as a registered Morgan Stanley broker and that had alleged unauthorized trades, was settled for $30K.
Churning
This type of activity usually involves a broker engaging in excessive trading in a client’s account, usually for the purposes of garnering commissions. Contact our churning fraud lawyers if you suspect your broker may be churning in your account, causing you to pay excess and unnecessary commissions.
More Investors Accuse Morgan Stanley of Retirement Fund Mismanagement
It was just recently that a FINRA arbitration panel ordered Morgan Stanley to pay $519K to a retired couple for failing to properly supervise broker Tim Prouty, who allegedly mishandled their funds. They too filed their investor fraud claim in 2016. Prouty allegedly invested their money in complex and unsuitable investments.
That ruling came not long after a different FINRA arbitration panel awarded a claimant nearly $455K in its broker-dealer fraud case against Morgan Stanley. This time the claimant was The Carpenter Law Firm Defined Benefit Plan, which alleged mismanagement of its retirement funds.
Last Month, Morgan Stanley agreed in a settlement with the California State Teachers’ Retirement System (CalSTRS) and the California Public Employees’ Retirement System (CalPERS) to pay $150M. The pension funds accused the brokerage firm about the risks involved in investing in mortgage-backed securities, allegedly causing them to lose millions of dollars.
Skilled Retirement Losses Lawyers
At Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm), our skilled retirement losses lawyers represent investors that sustained losses to their retirement and/or savings due to broker fraud or retirement plan mismanagement. We work with pension funds, retirement funds, older investors, retirees of all ages, and other investors in fighting to recoup their losses while holding negligent brokers and their broker-dealers liable on our clients’ behalf.
Contact SSEK Law Firm today so that we can help you explore your legal options with a free, no obligation consultation.