The Financial Industry Regulatory Authority (“FINRA”) confirms that Raymond James must pay more than $3,000,000 to investors seemingly because of harmful sales practices by securities broker James “Eddie” Lyons (CRD#: 1020397, Shreveport, Louisiana). This is the latest result in a string of disputes involving the securities broker, who Raymond James disaffiliated with on April 28, 2017 for unauthorized trading, and who FINRA barred June 4, 2018 for non-cooperation while under investigation. Here is more on the disputes against Lyons which suggest that he made unauthorized trades and lied to customers about commissions.
Raymond James Must Pay $3,000,000 For James Lyons’ Unauthorized Trading
Evidently, 40 clients brought FINRA Arbitration #: 17-02973 on November 9, 2017. Mainly, the clients alleged that James Lyons engaged in reckless trading in their accounts from 2001 to 2017. Supposedly, Lyons made unauthorized and unsuitable trades in oil and gas master limited partnerships and unit investment trusts. It appears that clients sustained grave losses on investments including Calumet Partners, Linn Energy and Cushing MLP Funds.
Moreover, clients complained about Lyons supposedly misrepresenting information or concealing information about their investments. Also, the clients alleged that Raymond James and Lyons’ supervisor, Thomas O’Brien, did not supervise him. Furthermore, the Statement of Claim contains allegations of Raymond James violating securities laws and FINRA rules. Evidently, on October 28, 2019, an Arbitration Panel mandated that Raymond James pay approximately $3,000,000 to harmed clients.
Raymond James Client’s Arbitration Action Suggests Lyons Made Unsuitable Trades
Evidently, a Raymond James client brought an arbitration claim on June 18, 2019. First of all, the client alleged that Raymond James or James Lyons violated FINRA rules by making unreasonable and unsuitable unit investment trust and stock trades. Apparently, clients neither knew nor consented to Lyons’ trading which resulted in overconcentration of their accounts in bad investments. Not only that, but the clients alleged that Lyons mismarked trades and failed to tell the clients about the risks. Lyons also supposedly concealed the commissions or costs relating to his transactions. For these alleged sales practice violations from January 31, 2000 to December 5, 2018, the client seeks compensatory relief. This matter is pending a resolution.
Lyons Allegedly Overconcentrates Clients’ Accounts in Risky Investments
FINRA also shows that a client of Raymond James took issue with James Lyons’ sales practices by bringing a September 5, 2018 complaint. Namely, the client alleged that Lyons sold unsuitable investments. Apparently, Lyons made purchases or sales of risky investments including DPPs and LP interests, stocks, and unit investment trust products. The Raymond James broker supposedly should not have allocated customers’ accounts in these products because they were inconsistent with the clients’ needs or risk profiles. Because of this, Raymond James settled the matter by paying the client $677,000.
FINRA Expels Lyons For Non-Cooperation In Unauthorized Trading Investigation
On June 4, 2018, FINRA determined that James Lyons was not suited to remain in the securities industry. Evidently, Lyons executed a Letter of Acceptance, Waiver and Consent which confirms that he failed to comply with FINRA Rules 2010 and 8210. Allegedly, FINRA investigated Lyons for unauthorized trading (allegations Raymond James disclosed to FINRA). The financial watchdog compelled Lyons’ testimony. However, Lyons refused to submit to FINRA’s demands.
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