Robert M. Lyons, of Augusta, Georgia, was fined $5,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity after consenting to findings that he made unsuitable recommendations to customers. Letter of Acceptance, Waiver and Consent, No. 2014040668202 (Sept. 1, 2016).
According to the AWC, Lyons made recommendations and subsequently effected a series of fourteen switches of mutual funds in three of Cambridge Investment Research’s customer accounts. The AWC stated that the switches, which FINRA deemed to be unsuitable, involved moving monies from one fund family’s shares to other shares in a separate family of funds.
The AWC stated that the investments that Lyons utilized, class A and T shares, contained loads which were charged to investors on the front or back end, or contained distribution or marketing fees. FINRA took issue with Lyons’ recommendations, as they were only beneficial for the customer when such customers’ held the investments in the longer term. Lyons apparently made recommendations for investors to switch investments in the short term.
Particularly, the affected clients held shares for prior than a year prior to switching. As such, FINRA found that the affected clients incurred hefty and unnecessary commissions with investment switches. FINRA found that Lyons failed to have a legitimate rationale for concluding that investors would benefit pursuant to his recommendations. As such, FINRA found that Lyons violated FINRA Rules 2010 and 2111, and NASD Rule 2310.
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