UNITED STATES SECURITIES AND EXCHANGE COMMISSION

The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Section 203(f) of the Investment Advisers Act of 1940 (“Advisers Act”) against Lynn D. Cawthorne (“Cawthorne” or “Respondent”). The Division of Enforcement alleges that on November 5, 2021, the U.S. District Court for the Western District of Louisiana accepted Cawthorne’s guilty plea to one count of wire fraud in violation of 18 U.S.C. §1343 and one count of failure to file tax returns in violation of 26 U.S.C. § 7203, in United States v. Cawthorne et al., Case No. 5:18-cr-00107-EEF-MLH. As part of his guilty plea, Cawthorne admitted that between 2013 and 2014, while he was employed by two dually registered broker-dealers and investment advisers, he defrauded the Food and Nutrition Service, an agency of the U.S. Department of Agriculture (USDA) which administers child nutrition programs such as the Summer Feeding Service Program established to ensure that low-income children continue to receive nutritious meals during the summer break from school. Under the program, meals are prepared and served by sponsors who are required to maintain records documenting the number of meals served, which they are reimbursed for after submitting a claim to the USDA certifying that the records are true and accurate. In 2013, Cawthorne submitted a false claim for reimbursement claiming more than the actual number of children fed, resulting in an overpayment that was wired to a bank account he controlled.

FINRA

Cawthorne was named a respondent in a FINRA complaint alleging that he failed to comply with its requests for information in connection with an investigation into his failure to disclose multiple felony charges and other potential violations. The complaint alleges that Cawthorne was indicted in the U.S. District Court for the Western District of Louisiana on seven felony counts of wire fraud and one felony count of conspiracy to commit wire fraud in connection with allegedly misappropriating approximately $536,000 from a government program that provided nutritious meals to children in low-income areas when school is not in session during the summer. The requested information was necessary to determine, among other things, whether Cawthorne failed to report his indictment and superseding indictment, and whether his related outside business activities and private securities transactions were properly disclosed to his firm or otherwise violated applicable FINRA rules.

Decision & Order of Offer of Settlement

Bar (Permanent)

All Capacities

Indefinite

11/16/2020

FINRA

Respondent Lynn Cawthorne failed to respond to FINRA request for information.

Letter

Suspension

All Capacities

n/a

1/27/2020

12/10/2020

Pursuant to FINRA Rule 9552 and in accordance with FINRA's Notice of Suspension letter dated January 2, 2020, Cawthorne is suspended on January 27, 2020 from associating with any FINRA member firm in all capacities. If Cawthorne fails to request termination of the suspension within three months of the date of the Notice of Suspension, he will automatically be barred on April 6, 2020 from association with any FINRA member in all capacities pursuant to FINRA Rule 9552(h). Suspension lifted on December 10, 2020.

Cambridge Investment Research, Inc.

Discharged

Advisor failed to report ongoing criminal investigation. Not securities related.

18 U.S.C. § 1349, Conspiracy-Wire Fraud

Dismissed

18 U.S.C. § 1956(h), Conspiracy - Money Laundering Conspiracy

Dismissed

18 U.S.C. § 1956(a)(1)(B)(i), Money Laundering

Dismissed

18 U.S.C. § 1343, Wire Fraud

Pled guilty

$1,815.00

Civil