Morgan Stanley Rep Fined for Making Unauthorized Trades, Texting Client
The Financial Industry Regulatory Authority has fined a Morgan Stanley rep $10,000 and suspended him for 60 days for making unauthorized trades in the accounts of a client couple and texting one of the clients about trades on his personal cell phone, an unapproved device.
According to FINRA’s order, between January 2014 and April 2021, Craig Sherman Thistlethwaite exercised discretionary authority to effect 546 trades in two related clients’ accounts without obtaining written authorization from the clients and without Morgan Stanley having accepted the accounts as discretionary, violating NASD Rule 2510(b) and FINRA Rules 3260(b) and 2010.
The rep also purchased a timeshare from one of the clients without firm approval, according to his BrokerCheck record.
In 2021 and 2022, the clients each filed a FINRA arbitration claim against Morgan Stanley, arising, in part, from the unauthorized trades, FINRA states.
The 2021 arbitration award resulted in Morgan Stanley paying $11.5 million, and in 2022 Morgan Stanley agreed to pay $4.2 million for one of the clients’ attorney fees.
On Feb. 16, 2023, Morgan Stanley filed a Uniform Termination Notice for Securities Industry Registration, or Form U5, stating that Thistlethwaite was terminated for, among other reasons, “[c]oncerns related to entering transactions in two related clients’ accounts without receiving verbal confirmation immediately beforehand, engaging in written Firm-related communications with the client on his non firm approved device.”
