William Bernard Lyons of New York New York is a stockbroker formerly employed by ACGM, Inc. who has been fined $10,000.00 and suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he failed to supervise a firm stockbroker’s private securities transactions and outside business activities. Letter of Acceptance Waiver and Consent No. 2015044587501 (Mar. 12, 2018).
According to the AWC, Carlos Abadi was the firm’s chief executive officer and president, who also ran Abadi & Company Securities, Limited. Evidently, when Lyons became a principal of the firm, he was required to review the firm members’ private securities transactions and outside business activities, including those conducted by Abadi. Apparently, Lyons was aware that Abadi claimed that ACS was an outside business activity which operated as a proprietary trading firm. Apparently, Lyons never questioned Abadi about the veracity of his representations and neglected to inquire into whether Lyons utilized ACS to effect securities transactions away from the firm.
The AWC revealed that it was only after SEC performed an examination of ACGM that Lyons discovered that ACS maintained a securities account for active trading. Lyons was then provided information that from 2010 to 2014, ACS placed at least forty private securities transactions. FINRA noted that the information Lyons was presented with concerning private securities transactions was inconsistent with previous representations made by Abadi in regard to his activities and status with ACS. Nonetheless, Lyons reportedly failed to inquire about Abadi’s trading in ACS’ investment accounts and failed to appropriately investigate whether Abadi was selling away or uncover information pertaining to the assets held by ACS.
The AWC stated that it was Lyons’ responsibility as the firm’s securities principal to monitor the outside business activities that Abadi engaged in. As part of enforcing the firm’s written supervisory procedures, Lyons was tasked with identifying whether Abadi was engaging in securities business outside ACGM’s auspices. FINRA indicated that Lyons should have been alerted to red flags based on Abadi’s statements about ACS’ proprietary assets, his disclosures on FINRA Form U4 detailing his broker-dealer work, and conflicting information Lyons obtained regarding ACS’ trade blotter. FINRA concluded that Lyons could have discovered that Abadi used ACS as a way to sell away from ACGM, and that Abadi utilized non-ACGM customers’ investment funds in the process. FINRA found that Lyons’ failure to supervise private securities transactions and outside business activities was violative of FINRA Rule 2010, 3110(b) and National Association of Securities Dealers (NASD) Rule 3010(b).
Lyons’ employment with ACGM, Inc. was terminated on February 1, 2017.
The information contained herein has been obtained from reliable sources however may not be accurate and is not guaranteed by us. Readers are encouraged to undertake their own independent investigation and evaluation of the relevant facts. All claims and allegations are subject to adjudication, decisions may be subject to appeal, and no inference is intended, nor should any inference be made from any information contained herein from any source.
This posting and the information on our website is for general information purposes only. This content should be not considered legal advice, and any responses, comments, e-mails, other communications do not form any attorney client relationship. Attorney Advertisement. See Important Disclaimer
Guiliano Law Group
Our practice is limited to the representation of investors. We accept representation on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.
For more information concerning common claims against stockbrokers and investment professionals, please visit us at securitiesarbitrations.com
To learn more about FINRA Securities Arbitration, and the legal process, please visit us at securitiesarbitrations.com
