William Donovan Ard (also known as Bill Ard), of Short Hills, New Jersey, a stockbroker formerly registered with Morgan Stanley, has been fined $15,000.00 and suspended for four months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity because Ard made misrepresentations of material fact to a customer and had made false statements to the securities broker dealer about a customer loan. Letter of Acceptance, Waiver, and Consent No. 2020069039301 (September 2, 2023).
According to the AWC, FINRA’s enforcement action against Ard originated from its review of a customer initiated investment related arbitration claim. FINRA stated that on May 31, 2018, Ard sent an email to a customer about investing in a publicly traded biopharmaceutical company. This email included projections for the company’s stock performance, which varied based on the outcome of a drug trial for a medication developed by the company. The email contained statements that were promissory, unwarranted, and misleading. For instance, the email optimistically claimed that the company’s stock price would maintain its value and would likely increase even in adverse scenarios. It also hinted that if the company’s drug trial turned out successful, larger pharmaceutical entities might be interested in acquiring the company at a significantly high price. Additionally, the email misleadingly implied that the International Trade Commission might launch an investigation against the company’s competitors, even though the company was at that time appealing the decision not to start such an inquiry. By sending this email, Ard violated FINRA Rules 2210(d)(1)(B) and 2010.
Moreover, FINRA stated that Ard made an intentionally false statement to Morgan Stanley’s compliance personnel about a customer’s use of borrowed funds. Specifically, Morgan Stanley had Liquidity Access Line accounts, which let customers borrow funds based on the value of their securities. Morgan Stanley’s guidelines prohibited using these funds for buying certain stocks, which a customer, referred to as Customer A, did, using funds from an outside account. When questioned about this by a Morgan Stanley compliance officer, Ard falsely claimed ignorance about why Customer A had made withdrawals from his Liquidity Access Line account. Therefore, Ard violated FINRA Rule 2010.
Also, Ard mismarked orders in the brokerage accounts of three customers. According to the AWC, those orders were inaccurately labeled as unsolicited when they were, in fact, solicited. These transactions involved purchasing call options in Customer A’s brokerage account. Additionally, against Morgan Stanley’s guidelines, Ard communicated about company matters on his personal phone without using company-approved software. The company was unable to keep or retrieve copies of these messages when they were exchanged, which included text messages with customers discussing securities transactions. Ard’s annual compliance questionnaires also falsely claimed he did not use unapproved apps for communicating with customers about trade matters. He violated FINRA Rules 4511 and 2010.
On August 30, 2021, a customer initiated investment related FINRA securities arbitration claim involving Ard’s conduct was settled for $84,000.00 in damages based upon allegations that Ard engaged in unsuitable trading in stocks between 2017 and 2018 when Ard was associated with Morgan Stanley Smith Barney (MSSB). FINRA Arbitration No. 18-03696.
Ard was associated with Morgan Stanley in Short Hills, New Jersey from June 1, 2009, to October 26, 2021.
