Craig Sherman Thistlethwaite, of Perrysburg, Ohio, a stockbroker formerly registered with Morgan Stanley, has been fined $10,000.00 and suspended for 60 days from associating with any Financial Industry Regulatory Authority (FINRA) member because Thistlethwaite engaged in unauthorized trading and communicated with customers about securities business using unauthorized methods. Letter of Acceptance, Waiver, and Consent No. 2023077934901 (July 24, 2024).
According to the AWC, from January of 2014 to April of 2021, Thistlethwaite executed 546 trades in the accounts of two customers without their written consent. FINRA stated that these accounts were also not approved by Morgan Stanley as discretionary. Therefore, Thistlethwaite violated FINRA Rules 2010 and 3260(b) as well as NASD Rule 2510(b).
FINRA also stated that Thistlethwaite engaged in improper customer communications. From November of 2020 to April of 2021, he sent and received business-related text messages concerning securities transactions with a customer using his personal phone. This method of communication was not approved by Morgan Stanley, as their policies require all business correspondence to be conducted through firm-authorized systems. The AWC stated that communications were not preserved as required under Securities Exchange Act of 1934. Therefore, Thistlethwaite violated FINRA Rules 2010 and 4511.
FINRA Public Disclosure also shows that Thistlethwaite was the subject of a customer initiated investment related FINRA securities arbitration claim in which the customer was awarded $11,500,000.00 in compensatory damages because Morgan Stanley was held liable for sales practice violations. FINRA Arbitration No. 21-02127 (December 1, 2022). The Statement of Claim alleged violation of Florida securities laws, violation of FINRA rules, breach of contract, fraud, negligence, failure to supervise, breach of fiduciary duty, and unauthorized trading in connection with the sale of technology stocks and options during the period that Thistlethwaite was associated with Morgan Stanley.
On December 29, 2022, another a customer initiated investment related FINRA securities arbitration claim involving Thistlethwaite’s conduct was settled for $4,200,000.00 in damages based upon an alleged unsuitable options strategy between 2015 and 2021 when Thistlethwaite was associated with Morgan Stanley Smith Barney. FINRA Arbitration No. 22-00218.
Thistlethwaite was associated with Morgan Stanley in Perrysburg, Ohio from June 1, 2009, to February 16, 2023. FINRA’s investigation into Thistlethwaite’s activities started following a Uniform Termination Notice for Securities Industry Registration (Form U5) filed by Morgan Stanley on February 16, 2023, showing that Thistlethwaite’s registration was terminated due to concerns of unauthorized trading.
