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Lloyd Layton: New York City Financial Advisor Suspended by FINRA

A disciplinary action taken by the Financial Industry Regulatory Authority against New York City broker and investment advisor Lloyd Layton (CRD# 1618414) suspended him over allegations he engaged in unsuitable short-term trading of unit investment trust products. A representative of Coastal Equities who was formerly registered with Morgan Stanley in Washington, DC, Layton was suspended for three months and ordered to pay a fine of $5,000.

According to a Letter of Acceptance, Waiver and Consent (No. 2017055691701) dated August 2018, Lloyd Layton was registered with Morgan Stanley when, between 2009 and 2015, he participated in “an unsuitable pattern of short-term trading” of unit investment trusts (UITs) in 54 customer accounts. FINRA’s findings state specifically that he made repeated recommendations to investors that the purchase UIT products and sell them “well before their maturity dates.” Of the UITs he recommended, FINRA states, most had maturity dates of at least two years, with sales charges starting of a minimum of 1.95% and a maximum of 3.95%. In spite of this, Layton allegedly recommended to his customers that they sell their positions “less than a year after purchase,” with the average UIT holding period in his customers’ accounts being about 265 days. FINRA’s findings state further that he recommended “on over 60 occasions” that his customers take the proceeds of the UIT sales and use them to buy a UIT “with similar or identical investment objectives.”

Layton’s recommendations, per FINRA’s findings, resulted in unnecessary sales charges for his investors; FINRA also concluded that the recommendations were unsuitable considering the transactions’ costs and frequency. FINRA found that these recommendations constituted violations of NASD Rule 2310 and FINRA Rules 2010 and 2111. As a result of the foregoing alleged conduct, Lloyd Layton was suspended from association with any FINRA member in any capacity for three months. He was also ordered to pay a fine of $5,000.

Lloyd Layton has been registered with Coastal Equities in New York City since January 2019. His employment history includes Wells Fargo Clearing Services in Washington, DC; Morgan Stanley in Washington, DC; Morgan Stanley & Company in Washington, DC; Morgan Stanley DW in Washington, DC; Citigroup Global Markets in New York City; and Merrill Lynch in New York City. He currently holds two state licenses and has passed five securities industry qualification examinations.

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By submitting this form I acknowledge that form submissions via this website do not create an attorney-client relationship, and any information I send is not protected by attorney-client privilege.

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