Erez Law is currently investigating former Raymond James & Associates, Inc. financial advisor James Edward Lyons (Eddie Lyons) (CRD# 1020397) regarding unauthorized trading and unsuitable investments in high risk Master Limited Partnerships (MLPs). Lyons was registered with Raymond James & Associates, Inc. in Shreveport, Louisiana from 2013 to May 2017, when he was terminated regarding, “Financial Advisor was terminated due to customer allegation of unauthorized trading.” Previously, he was registered with Morgan Keegan & Company, Inc. in Shreveport, Louisiana from 1993 to 2013.
It is recently reported that a FINRA arbitration has been filed against Lyons on behalf of 39 former customers alleging unauthorized trading and the purchase of high risk oil and gas MLPs that were unsuitable for his clients.
MLPs are limited partnerships that are publicly traded and combine the tax benefits of a limited partnership with the liquidity of publicly traded securities. MLPs are offered in two classes: limited partners and general partners. Limited partners are comprised of investors who purchase units in the MLP to provide the capital for the operation and receive income distributions from the MLP’s cash flow. On the other hand, general partners manage the day-to-day operation of the MLP and receive compensation based on the MLP’s performance. Many financial advisors recommended MLPs to elderly and retired investors seeking income during their retirement years and often represented these investments as bond alternatives. They were not. Regrettably, many investors have only learned the true risks associated with MLPs and MLP funds after they sustained massive losses.
Over the past few years, oil prices have significantly declined. A supply glut in 2014 and 2015 led to some of the lowest prices the market has seen in recent years. In turn, securities values also dropped. The volatile energy sector experienced significant turmoil, and many energy companies were negatively impacted when global crude oil prices fell below $40 per barrel at the end of 2015. This was the lowest level since early 2009, as supply was in excess of global demand. Oil and gas companies experienced a spike in bankruptcies, which have left many investors reeling.
Many of Lyons’ clients accounts were retirement account, and when some of the MLPs went bankrupt or decreased significantly in value, Lyons clients suffered massive losses.
Lyons has been the subject of eight customer complaints between 2011 and 2017, one of which was denied and one was closed without action, according to his CRD report:
- November 2017. “From 2001 – 2017 Claimants are alleging violations of FINRA and Industry Standard Rules; Breach of Contract; Breach of Federal and State Laws; Fraudulent and/or Negligent Representation; Fraudulent Concealment; Unauthorized Trading; and Overconcentration.” The customer is seeking $5,000,000 in damages and the case is currently pending.
- October 2017. “From 1/1/2010 – 12/31/2013 Claimant alleges: Breach of duties, fraudulent omissions, Federal securities law violations, Louisiana securities law violation, bad faith breach of contract.” The case is currently pending.
- September 2017. “3/14/2003 – 06/27/2017 customer allege unauthorized trading and poor performance.” The case is currently pending.
- June 2017. “12/23/2013 – 6/14/2017 Unauthorized Trading, Suitability.” The customer is seeking $800,000 in damages and the case is currently pending.
- April 2016. “Breach of Duties; Churning; Fraudulent Omissions; Federal Securities Law Violations; Louisiana Securities Law Violation; Unauthorized Trading; Suitability: Activity dates 2/17/2011 – 4/29/2016.” The customer sought $1,200,000 in damages and the case was settled for $400,000.
- October 2011. “Claim alleges unsuitability, misrepresentation and unauthorized trading with regard to mutual funds, stock and unit investment trusts purchased in 2006 and 2007.” The case was settled for $152,000.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Raymond James & Associates, Inc. may be liable for investment or other losses suffered by Lyons’ customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.