SHREVEPORT, La. - An arbitration panel has awarded more than two dozen investors just over $3 million as compensation for losses due to unsuitable investments made by disgraced Shreveport broker Eddie Lyons.
Lyons, who agreed to what amounts to a lifetime ban from the financial-adviser industry after the allegations were made, was accused of costing clients more than $5 million in risky investments that went against their wishes to invest conservatively.
The three-member arbitration panel, selected by the Financial Industry Regulatory Authority, heard testimony from investors during 73 hearings held over the course of three months this past spring and summer.
It concluded that restitution should be paid to the investors. That money will be paid by Lyons' former employer, Raymond James broker firm, which fired him in 2017. Lyons was not a party in the arbitration case.
The investors, ranging from retirees to a Baptist church, said Lyons put them in speculative, money-losing investments at a time the bull market was pulling most stock portfolios higher. The portfolios lost millions from those investments and were also dragged down by high commissions and fees, according to the claim filed with federal financial services regulators.
“He was putting them in these (investments) without informing the clients,” said Kim Breese, a Ridgeland, Miss., attorney who represented more than three investors who filed claims. “They weren’t in the business of taking risks.”
Randall Fish, whose 97-year-old father was a client of Lyons, said the broker “gambled with other people’s money” and lost.
“What Eddie did was unconscionable,” Fish said Tuesday after the arbitration decision was released. “He did not ever talk to me – and I doubt any of the other claimants, either – about how heavily invested we were in the wrong kind of stuff.”
More claimants settled or withdrew earlier in the case.
One investor, alleging he lost money at a time a major component of the stock market was up 89 percent, said that if his portfolio had tracked earnings of the S&P 500 Index during the four years Raymond James had his account, it would have been worth $3.5 million, instead of just over $2 million.
Breese said losses exceed $5.5 million -- a figure based on "what they should have, instead of what they do have" had the money been invested the way the clients wanted: Well-established mutual funds, blue-chip stocks and bonds.
The arbitration panel’s decision fell between the amount the investors sought and the out-of-pocket losses in the Raymond James accounts.
Lyons, a champion amateur golfer, was in the brokerage business for more than 30 years. He was fired by Raymond James in April 2017. He testified for two days during the arbitration hearings.
Lyons has declined comment on the specific accusations, but has said previously the losses were tied to “an unforeseen and unprecedented drop in oil prices.”
Most of the investors live in Shreveport and include attorneys, a doctor, a college professor, business people, retirees, a church and a social service agency. Many of the individuals are in their 70s and 80s, Breese said. None has been wiped out, although one person lost all $75,000 invested with Lyons, Breese said.
Raymond James has declined comment on the case.
Lyons won the Shreveport Amateur golf championship several times and also won the state senior amateur championship.
In addition to the investors who presented their claims for arbitration or settled, another 15 investors who were clients of Lyons settled complaints over unsuitable investments.
The last of those settlements, which totaled $677,000, was made early this year, according to FINRA's BrokerCheck Report.