William Donovan Ard (CRD #1133673, Jersey City, New Jersey)

September 22, 2023 – An AWC was issued in which Ard was assessed a deferred fine of $15,000 and suspended from association with any FINRA member in all capacities for four months. Without admitting or denying the findings, Ard consented to the sanctions and to the entry of findings that he forwarded an email that contained promissory, unwarranted, and misleading communication to his customer about investing in a publicly traded biopharmaceutical company.

The findings stated that the email described predictions for the company’s stock performance—including “bear,” “base,” and “bull” cases, which varied depending on the results of a drug trial involving a drug the company had developed. The findings also stated that Ard made a false statement to his member firm about the customer’s use of borrowed funds. The customer opened a Liquidity Access Line (LAL) account at the firm which allows firm customers to borrow funds from the firm’s affiliate bank based on the value of eligible securities held as collateral. Contrary to firm policy, the customer used LAL funds to purchase publicly traded stocks and options. The customer made these purchases in accounts held outside of the firm. Subsequently, the firm sent an email to Ard asking, among other things, why the customer had withdrawn funds from his LAL account. Although Ard knew at the time that the customer had used LAL funds to purchase publicly traded stock, he denied knowing the purpose of the customer’s withdrawals.

The findings also included that Ard caused the firm’s records to be inaccurate by mismarking orders as unsolicited in customers brokerage accounts. The vast majority of the transactions were purchases of call options in the customer’s brokerage account. In addition, Ard communicated about firm business on his personal phone outside of a firm-approved application causing the firm to be unable to obtain or preserve copies of the communications when they were sent. The communications included text messages with customers about securities transactions. Furthermore, Ard submitted annual compliance questionnaires that falsely indicated that he did not use unapproved mobile applications to communicate with customers about trade-related matters. By communicating about firm business outside of a firm-approved application, Ard prevented FINRA from obtaining relevant evidence, hindering its investigation.

The suspension is in effect from October 2, 2023, through February 1, 2024. (FINRA Case #2020069039301)