Securities Lawyers Blog
According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) financial advisor James Lyons (Lyons), has been subject to five customer complaints and one employment terminations for cause. Lyons was formerly associated with Raymond James & Associates, Inc. (Raymond James) until April 2017 when the firm terminated his employment due to customer allegation of unauthorized trading.
The most recent customer complaint filed against Lyons alleged that from December 2013 through June 2017 the broker engaged in unauthorized and unsuitable trading resulting in $800,000 in damages. The complaint was filed in June 2017 and is currently pending. Previously a customer in April 2016 alleged unauthorized trading resulting in $1.2 million in damages. That claim was eventually settled for $400,000.
Advisors are not allowed to engage in unauthorized trading. Such trading occurs when a broker sells securities without the prior authority from the investor. All brokers are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b). These rules explicitly prohibit brokers from making discretionary trades in a customers’ non-discretionary accounts. The SEC has also found that unauthorized trading to be fraudulent nature because no disclosure could be more important to an investor than to be made aware that a trade will take place.