Alex Williams (CRD# 2646185), a broker and investment adviser based in New York, has received a pending customer complaint. According...Read More
David Strnad: Former Wells Fargo Advisor Sanctioned Over Unauthorized trading Allegations
A disciplinary action taken by the Financial Industry Regulatory Authority against former Nashville, Tennessee broker and investment adviser David Strnad (CRD# 1982721) suspended him over allegations he executed unauthorized transactions in the account of an elderly customer of his former member firm, Wells Fargo Clearing Services. Strnad was fined $10,000 and suspended from acting as a broker for 18 months as a result of these findings.
According to a Letter of Acceptance, Waiver, and Consent (No. 2016051569601) signed in May 2019, David Strnad effected “approximately 273 transactions involving bank-issued certificates of deposit” in an elderly customer’s accounts between September 2013 and December 2015. FINRA’s findings state that although the customer had provided Strnad with verbal authorizations to execute CD issuance purchases when earlier CD issuances matured, he “exceeded the scope of his authority” when executing sales of the customer’s CDs before they matured and then funding purchases of new CDs with the proceeds of those sales.
FINRA’s findings state specifically that starting in 2007, the customer “sought to invest his assets” at Wells Fargo exclusively in certificates of deposit. The customer provided Strnad with verbal authorization to purchase new issuances when earlier issuances reached maturity, according to FINRA, but did not give him authorization to sell CDs before they reached maturity, “or to use the proceeds of such sales” for the purchases of new issuances. Mr. Strnad allegedly went outside of the authority provided to him by the customer, according to FINRA, when he sold the customer’s CDs before they reached maturity, “nearly always at a loss,” and then bought new issuances with those sales’ proceeds. According to FINRA’s findings, the customer had purchased the CD investments through Wells Fargo as opposed to a bank, and as such “could sell them in the secondary market without incurring a penalty.” Mr. Strnad’s sales were at a loss, according to FINRA, because various factors led to the CDs being “priced below par” in that market.
As such, according to FINRA, Strnad’s roughly 273 CD transactions led to losses of about $100,572, and “unnecessary commissions” of $4,268.73. As a result of the foregoing conduct, David Strnad was suspended from association with any FINRA member firm for 18 months, ordered to pay a fine of $10,000, and ordered to pay disgorgement of $4,268.73 plus interest.
David Strnad is currently not registered as a broker. His employment history includes Wells Fargo Clearing Services in Nashville, Tennessee, Morgan Stanley, Citigroup Global Markets, and Morgan Stanley. He currently holds no state licenses and has passed five securities industry qualification examinations.