Brokerage Firm Alert: Our Investment Fraud Attorneys Are Investigating LPL Financial LLC
Did You Lose Money Because of LPL Financial? Are You Aware of Complaints and Fines Against LPL Financial?
Updated on: December 21, 2023
LPL Financial LLC (“LPL Financial”) (CRD # 6413) is a broker-dealer and has been the subject of at least one hundred eighty-seven (187) complaints filed by regulatory organizations like FINRA and many more by investors like yourself. At Patil Law, we have investigated LPL Financial, its regulatory complaints and fines, and its customer complaints. If you’ve invested your hard-earned money with LPL Financial, you should be very concerned about any regulatory actions, regulatory fines, or customer complaints against your brokerage firm.
Our team of attorneys specialize in representing investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors. As an investor, you may be entitled to compensation for losses accrued due to mismanagement of your investments.
If you believe you have a claim against LPL Financial, you should strongly consider hiring an investment fraud lawyer and not wait until it’s too late to file a claim. Reach out to our legal team via the secure and private online form or call our firm directly toll-free at 1-800-950-6553 for a free consultation so that we can discuss your case and see what we can do to help you get the compensation you need and deserve. We do not charge anything for the ability to discuss your matter and evaluate your potential case.
Jump to Topic
Do I Have an Investment Fraud Case Against LPL Financial?
How To File a Claim Against LPL Financial To Get Your Money Back
Client Complaints – Is Your Financial Advisor on This List?
Did Misconduct By a LPL Financial Advisor Impact Your Investments? What Can You Do?
LPL Financial Has Many Regulatory Complaints and Fines
A Closer Look Into LPL Financial’s Regulatory Issues
Next Steps and Free Consultation with Our Legal Team
Do I Have an Investment Fraud Case Against LPL Financial?
✅ YES, if you’ve experienced financial losses due to the actions or misconduct of LPL Financial or its staff, you have the right to pursue legal action against them. You can sue LPL Financial but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding.
FINRA arbitration proceedings are generally private proceedings that can last anywhere from a few months to approximately a year. Our attorneys have personal experience in representing clients in FINRA arbitration proceedings and know very well how you can not only sue LPL Financial in FINRA arbitration proceedings, but WIN that arbitration. The easiest way to know if you have a case against LPL Financial is to reach out to our legal team at Patil Law via the secure and private online form or call us toll-free at 1-800-950-6553 for a complimentary consultation.
Who is LPL Financial?
LPL Financial (CRD # 6413) is a registered broker-dealer. It operates as a full-service independent broker-dealer, providing a range of financial products and services to individual investors and financial advisors. As a registered broker-dealer, LPL Financial is subject to regulations and oversight by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
It is required to comply with industry standards and regulations to ensure the protection of its clients’ interests. A failure to comply with industry standards by either its brokers or the firm itself can result in disciplinary actions, fines, or other penalties imposed by regulatory authorities.
How To File A Claim Against LPL Financial To Get Your Money Back
If you have questions about LPL Financial, its advisors, or the management or performance of your accounts, please contact our legal team at Patil Law via the secure and private online form or call us toll-free at 1-800-950-6553 for a free and complimentary initial consultation. Our attorneys have experience handling well over a thousand securities arbitration claims, and our law firm has successfully recovered over $25 million for our clients to date.
We understand the stress that comes along with realizing that your financial advisor or brokerage firm has made poor decisions with your money. We can help you, as we have helped hundreds of other clients in the past.
Client Complaints – Is Your Financial Advisor on This List?
There have been scores of customer complaints filed against LPL Financial stockbrokers and investment advisors over the years. Many of these complaints deal with financial advisor misconduct, poor or unsuitable investment recommendations, failure by these brokerage firms to supervise their employees (the financial advisors), and general fraud against consumers. We have launched many investigations of current and former LPL Financial advisors:
- James Zegers currently unaffiliated (previously with LPL Financial and Voya Financial)
- Khary Miller with LPL Financial (previously with Lexco Wealth Management and National Planning Corporation)
- Richard Sall with LPL Financial (previously with Voya Financial and Amev Investors)
- Donald Coffin with LPL Financial (previously with Voya Financial and Waddell & Reed)
- Edward Bacher with LPL Financial (previously with Voya Financial and ING Financial Advisers)
- Peter Mersberger with LPL Financial (previously with Merit Financial Advisors and Cambridge Investment Research Advisors)
- David Melilli currently barred (previously with Cambridge Investment Research and Sagepoint Financial)
- William Randall with Cambridge Investment Research (previously with Cambridge Investment Research Advisors and LPL Financial)
- Erin Willis with Cambridge Investment Research (previously with Cambridge Investment Research Advisors and LPL Financial)
- James Docster with Cambridge Investment Research (previously with Cambridge Investment Research Advisors and LPL Financial)
- Brian Lee with LPL Financial (previously with Cambridge Investment Research Advisors and Cambridge Investment Research)
- Michael Petyak with Calton & Associates (previously with Advisory Services Network and LPL Financial)
- Christian Webb currently unaffiliated (previously with Dominion Investor Services)
- Paz Chandra with Osaic Wealth (previously with Signator Investors and LPL Financial)
- Joseph Tonyan with Woodbury Financial (previously with Sagepoint Financial and LPL Financial)
- Gregory Ellis Gann with LPL Financial (previously with Intersecurities and MML Investors Services)
- Enrique Lopez with Arkadios Capital (previously with Arkadios Wealth Advisors and LPL Financial)
- Robert Edward Micone currently unaffiliated (previously with Standard Investment Chartered Incorporated and LPL Financial)
- Steven Trevor Skipper with Cetera Advisors (previously with LPL Financial and Edward Jones)
- Nicholas Joseph Travascio III currently unaffiliated (previously with WM Financial Services and Griffin Financial Services)
- Denis Michael Drummey currently unaffiliated (previously with LPL Financial and AIG Financial Advisors)
- Wayne David Wagner Jr. currently unaffiliated (previously with LPL Financial and Ascend Financial Services)
- Emmett Andrew Johnson currently unaffiliated (previously with LPL Financial and RBC Capital Markets)
- Jonathan Dale Upton with LPL Financial (previously with NATCITY Investments)
- Harold Martin Collins currently unaffiliated (previously with LPL Financial and Linsco/Private Ledger)
- Ryan Reynolds LeBlanc with LPL Financial (previously with Morgan Stanley DW and Morgan Keegan & Company)
- Brian Patrick Bjerke currently unaffiliated (previously with LPL Financial and New England Securities)
- Jeffrey Mark Armstrong with LPL Financial (previously with Integrated Wealth Concepts and Lincoln Financial Advisors Corporation)
- Daniel Leonard Ascani currently unaffiliated (previously with LPL Financial and Ameriprise Financial Services)
- Charles Phillips Darrow currently unaffiliated (previously with American Portfolios Financial Services and LPL Financial)
- Chandrakumar Rajaratnam currently unaffiliated (previously with LPL Financial)
- Carlos A. Salazar currently unaffiliated (previously with LPL Financial and J.P. Morgan Securities)
- Adam Ross Lunceford currently unaffiliated (previously with LPL Financial and Securities Service Network)
- Archibald William McMichael III with Avantax Investment Services (previously with Avantax Advisory Services and LPL Financial)
- Anida Venniro with Ameriprise Financial Services (previously with LPL Financial and AXA Advisors)
- Wesley Justin Foltz currently unaffiliated (previously with Prospera Financial and LPL Financial)
- Craig Jan Snyder with LPL Financial (previously with Veravest Investments and Allmerica Investments)
- Harvey Stuart Berk with Kestra Investment Services (previously with Kestra Advisory Services and LPL Financial)
- Guy Anthony Harrigan currently unaffiliated (previously with Triad Advisors and LPL Financial)
- George William Byykkonen with LPL Financial (previously with AAL Capital Management Corporation and IDS Life Insurance Company)
- George Ly with LPL Financial (previously with Cetera Investment Advisers and Cetera Investment Services)
- Galen Kyle Kopman currently unaffiliated (previously with Centaurus Financial and LPL Financial)
- Ekua Opokuaa Anyanful with LPL Financial (previously with EDI Investment Advisor Corporation and EDI Financial)
- Daniel G Dillard currently unaffiliated (previously with Union Capital Company and LPL Financial)
- Thomas Michael Dilello Jr currently unaffiliated (previously with LPL Financial and Wells Fargo Advisors)
- Scott Willard Doll with LPL Financial (previously with BA Investment Services and GNA Securities)
- James Maurice Farmer with LPL Financial (previously with Cambridge Investment Research Advisors and Cambridge Investment Research)
- Steven Ira Feiertag with LPL Financial (previously with Mutual Service Corporation and Churchill Securities)
- James Hunt with APW Capital (previously with Aurora Private Wealth and LPL Financial)
- Robin Dale Blackman with IFP Securities (previously with IFP Securities and LPL Financial)
- Peter Joseph Albano with LPL Financial (previously with Invest Financial Corporation and CCO Investment Services)
- Andrew Ricardo Roybal with LPL Financial (previously with Unionbanc Investment Services amd Rickel & Associates)
- Anthony P. Ragusa with LPL Financial (previously with Merrill Lynch, Pierce, Fenner & Smith Incorporated)
- Bradley Graham Barnett with LPL Financial (previously with KPP Advisory Services and Ameriprise Financial Services)
- Jon Bradley Burnett with Raymond James Financial Services (previously with Raymond James Financial Services Advisors and LPL Financial)
- Brandon Christopher Williams with LPL Financial (previously with Cetera Investment Advisers and Cetera Investment Services)
- Brian Jesse Singleton with Ameriprise Financial Services (previously with LPL Financial and Cuna Brokerage Services)
- Brian Joesph Gaffney with LPL Financial (previously with MML Investors Services and New England Securities Corporation)
- Jay Frederick Haffley with LPL Financial (previously with Bancwest Investment Services and SII Investments)
- Brian Neil Slade with LPL Financial (previously with AXA Advisors and Mony Securities Corporation)
- David Michael Lademan currently unaffiliated (previously with LPL Financial and Kalos Capital)
- Brian R. Bates with LPL Financial (previously with PNC Investments and PNC Managed Accounts Solutions)
- Eric John Batey with Berthel, Fisher & Co. Financial Services (previously with LPL Financial and Edward Jones)
- Amee Sue Wright with NY Life Securities (previously with Eagle Strategies and LPL Financial)
- James Thomas Booth currently barred (previously with LPL Financial and Invest Financial Corporation)
- Wesley Marion Oler IV currently barred (previously with LPL Financial and NRP Financial)
- Alberto Neira currently barred (previously with LPL Financial and Wells Fargo Investments)
- Roger Salvatore Zullo currently barred (previously with LPL Financial and Park Avenue Securities)
- Lawrence Leslie Miller Jr. currently barred (previously with Summit Brokerage Services and LPL Financial)
- Edward Joseph Bosch Sr. currently barred (previously with LPL Financial and Signator Investors)
- David Arthur Wismer III currently barred (previously with LPL Financial and American Express Financial Advisors)
- Thomas Edward Andrews currently barred (previously with LPL Financial)
- Eugene Theodore Smietana currently barred (previously with LPL Financial and Prudential Securities)
- Alfred Talens Jr. currently barred (previously with LPL Financial and New England Securities)
- John Allen Brown currently barred (previously with LPL Financial and NFP Securities)
- Robert Neil Tricarico currently barred (previously with LPL Financial and Wells Fargo Advisors Financial Network)
- Kevin Charles Fretz currently unaffiliated (previously with LPL Financial and Uvest Financial Services Group)
- Jonathan Douglas Freeze currently unaffiliated (previously with Fortune Financial Services and LPL Financial)
- Jason Woods currently unaffiliated (previously with Thurston, Springer, Miller, Herd, & Titac and LPL Financial)
- Bret Alexander Hartman with Berthel, Fisher & Company (previously with BFC Planning and LPL Financial)
- David John Taddeo with LPL Financial (previously with Financial Network Investment Corporation and American Pacific Securities Corporation)
- Jeremy L Darstek with Ameriprise Financial Services (previously with LPL Financial and AXA Advisors)
- Patrick Devlin with LPL Financial (previously with Waddell & Reed)
- Kirk Balin with LPL Financial (previously with Householder Group Estate & Retirement Specialists and Householder Group Financial Advisors)
- Francis Draa currently unaffiliated (previously with LPL Financial and Sanders Morris Harris)
- Bret Edensword with LPL Financial (previously with Edward Jones)
- Robert Fross currently unaffiliated (previously with LPL Financial and SII Investments)
- Bryan Marc Gravel with LPL Financial (previously with Flagship Harbor Advisors and Citizens Securities)
- Benjamin Haas currently unaffiliated (previously with LPL Financial and Ameriprise Financial Services)
- Kevin Kraft with LPL Financial (previously with APS Investment Management Group and Mutual Securities)
- Shawn Michael Layton with LPL Financial (previously with Securities America Advisors and Securities America)
- Seth Leishman with LPL Financial (previously with Ostrofe Financial Consultants and National Planning Corporation)
- Evan Lunsford with LPL Financial (previously with Edward Jones and Northwestern Mutual Investment Services)
- Joseph Malboeuf with LPL Financial (previously with Lincoln Financial Securities Corporation and Edward Jones)
- Glenn Livingston with LPL Financial (previously with Invest Financial Corporation and Intersecurities)
- David Samuel Lockman currently unaffiliated (previously with The Huntington Investment Company and LPL Financial)
- Leonard Rickey currently unaffiliated (previously with LPL Financial and MML Investors Services)
- Paul Scott currently unaffiliated (previously with LPL Financial and Invest Financial Corporation)
- Carol Ann Tartaglia currently unaffiliated (previously with LPL Financial and Uvest Financial Services Group)
- David Samuel Waters with Cetera Advisors (previously with LPL Financial and Private Advisor Group)
- John Michael Horseman with AW Securities (previously with Allworth Financial, L.P. and LPL Financial)
- Thomas Boley Hunt with LPL Financial (previously with Wells Fargo Clearing Services and Wells Fargo Investments)
- Christopher Zelesnick with Allstate Financial Services (previously with Impactive Advisors and LPL Financial)
- Ted Albrecht with LPL Financial (previously with Householder Group Estate & Retirement Specialists and J.P. Morgan Securities)
- William Baumberger with LPL Financial (previously with Investment Professionals and Fifth Third Securities)
- John Broughton currently unaffiliated (previously with Citizens Securities and LPL Financial)
- Matthew S Brown with LPL Financial (previously with Ameriprise Financial Services and Ameriprise Advisor Services)
- Art Cardenas with LPL Financial (previously with Girard Securities and QA3 Financial Corp.)
- Steven Case with LPL Financial (previously with FSC Securities Corporation and National Planning Corporation)
- Christopher Cavallaro with LPL Financial (previously with Integrated Wealth Concepts and Lincoln Financial Advisors Corporation)
- Alberto Cavazos with LPL Financial (previously with UBS Painewebber and J.C. Bradford & Co.)
- Steven Champagne with LPL Financial (previously with Private Advisor Group and Morgan Stanley)
- Jane Everingham currently unaffiliated (previously with LPL Financial and American Investors Company)
- Lawrence Greenfield currently unaffiliated (previously with LPL Financial and Arete Wealth Management)
- Christopher Burtraw currently barred (previously with J.P. Turner & Company and LPL Financial)
- James Chiaro with LPL Financial (previously with Citizens Securities and PNC Investments)
- David Columb with LPL Financial (previously with B.C. Ziegler And Company and Ameritas Investment Corp.)
- Chase Crump with RFG Advisory (previously with Private Client Services and LPL Financial)
- Cheryl Brown with LPL Financial (previously with H. Beck and FSC Securities)
- Christopher Watts with LPL Financial (previously with Keystone Financial Group and Citigroup Global Markets)
- Christopher Riggs currently unaffiliated (previously with LPL Financial and Edward Jones)
- Joel Arivett currently unaffiliated (previously with Arvest Wealth Management and LPL Financial)
- Christopher Black currently barred (previously with LPL Financial and Wells Fargo Clearing Services)
- Chun Zhu with LPL Financial (previously with Waddell & Reed)
- Dain Stokes currently barred (previously with LPL Financial and Edward Jones)
- Daniel Zimmerman with LPL Financial (previously with Invest Financial Corporation and Investors Capital Corp.)
- David Roberson with LPL Financial (previously with Raymond James & Associates and Morgan Keegan & Company)
- Dominick Greco currently unaffiliated (previously with LPL Financial and Sagepoint Financial)
- Douglas Allen with LPL Financial (previously with Wells Fargo Advisors Financial Network and Wells Fargo Advisors)
- Eric Brown currently unaffiliated (previously with LPL Financial and Waddell & Reed)
- Frank Orlando with LPL Financial (previously with Signator Investors and Merrill Lynch, Pierce, Fenner & Smith Incorporated)
- Gayle Lob currently unaffiliated (previously with LPL Financial and IDS Life Insurance Company)
- James Couture currently barred (previously with LPL Financial and Lincoln Financial Securities Corporation)
- Joe Franklin with LPL Financial (previously with Raymond James & Associates and J.J.B. Hilliard, W.L. Lyon)
- John Stubbs currently unaffiliated (previously with LPL Financial and Morgan Stanley)
- John Milo with LPL Financial (previously with Waddell & Reed and Key Investment Services)
- John Emmanuel Simone Sr. with LPL Financial (previously with Wealthcare Advisory Partners and Financial Network Investment Corporation)
- Karen Briggs currently unaffiliated (previously with LPL Financial and Securities Service Network)
- Kevin McCallum currently unaffiliated (previously with LPL Financial and NBC Securities)
- Kimberly Kennedy with LPL Financial (previously with Presidential Brokerage and Valic Financial Advisors)
- Laurence Wajsman with LPL Financial (previously with CUNA Brokerage Services and First Union Securities)
- Lester Lee Jr. with LPL Financial (previously with Edward Jones)
- Mark Haenny with LPL Financial (previously with Cetera Advisors and First Allied Advisory Services)
- Mary Alice Henry LPL Financial (previously with Edward Jones and Prudential Securities Incorporated)
- Maryanne Bessler with LPL Financial (previously with Investors Capital Advisory and Investors Capital Corp)
- Michael Henschel with LPL Financial (previously with Uvest Financial Services Group)
- Oscar Lee Harrison II with LPL Financial (previously with Sorrento Pacific Financial and Raymond James Financial Services Advisors)
- Patrick Naughton with LPL Financial (previously with Uvest Financial Services Group and Webster Investment Services)
- Paul John Stanislaw Jr. currently unaffiliated (previously with LPL Financial and Uvest Financial Services Group)
- Rhett Bedwell currently barred (previously with LPL Financial and Arvest Wealth Management)
- Richard Lieberfarb with LPL Financial (previously with David Lerner Associates)
- Robert Eberst Jr. with LPL Financial (previously with Independent Financial Partners)
- Scott Williams with LPL Financial (previously with Raymond James Financial Services and J.J.B Hilliard, W.L. Lyons)
- Stephen Wedel with Private Client Services (previously with RFG Advisory and LPL Financial)
- Stephen Franklin with LPL Financial (previously with Associated Securities Corp. and Intersecurities)
- Stephen Levin currently unaffiliated (previously with Corecap Investments and LPL Financial)
- Steven Fairchild with LPL Financial (previously with National Planning Corporation)
- Terry Bailey with LPL Financial (previously with Wells Fargo Advisors)
- Richard DeYoung Jr. with LPL Financial (previously with Wells Fargo Clearing Services and Merrill Lynch, Pierce, Fenner & Smith Incorporated)
- William McDonough currently unaffiliated (previously with LPL Financial and Edward Jones)
- Joseph Brittingham with LPL Financial (previously with Edward Jones)
- David Casparian with LPL Financial (previously with Cetera Advisor Networks and Financial Network Investment Corporation)
- Anthony Makransky with LPL Financial (previously with Ameriprise Financial Services and Banc of America Investment Services)
- Deborah Anderson currently unaffiliated (previously with LPL Financial and Centaurus Financial)
- Christopher Watkins with Silver Oak Securities Incorporated (previously with Magnate Advisory Services and LPL Financial)
- Mark Zitzelsberger with LPL Financial (previously with Total Investment Planners and FSC Securities Corporation)
- Peter Evans with LPL Financial (previously with Securian Financial Services)
- Nicholas Ignatowski with LPL Financial (previously with Ameritas Investment Corp and The Advisors Group)
- Stephen Kerutis with LPL Financial (previously with Truist Advisory Services and Truist Investment Services)
- Kristy Nicol with LPL Financial (previously with Primevest Financial Services and Raymond James Financial Services Advisors)
- H. Brock Seibold with (previously with Cetera Advisor Networks)
- James Stottlemyre currently unaffiliated (previously with LPL Financial and Cetera Investment Services)
- Ken Balser currently barred (previously with Cetera Advisors and LPL Financial)
- Russell Nieland with Cetera Advisor Networks (previously with LPL Financial and TD Ameritrade)
- Brent Blaus with LPL Financial (previously with Cetera Investment Advisers and Cetera Investment Services)
- Gary Meagher with LPL Financial (previously with Cetera Advisor Networks and Linsco/Private Ledger Corp.)
- James Gibson with Cetera Advisors (previously with Private Advisor Group and LPL Financial)
- Michael David currently unaffiliated (previously with Cetera Advisor Networks and LPL Financial)
- Jimmy Maldonado with LPL Financial (previously with Invest Financial Corporation and Cetera Advisors)
- Mark Senofonte with First Heartland Capital, Inc. (previously with LPL Financial and Cetera Investment Services)
- Ivan Ji Cen with Cetera Investment Services (previously with Cetera Investment Advisers and LPL Financial)
- Callen Bryan with Cetera Advisor Networks (previously with Cetera Investment Advisers and LPL Financial)
- Daniel Kew with Cetera Investment Services (previously with LPL Financial and Citigroup Global Markets)
- Haiguang Yin with Cetera Investment Services (previously with LPL Financial and Uvest Financial Services Group)
- Jason Comes currently unaffiliated (previously with Cetera Advisor Networks and LPL Financial)
- Kevin McCoy with Cetera Investment Services (previously with Cetera Investment Advisers and LPL Financial)
- Mei Guo with Cetera Investment Services (previously with Cetera Investment Advisers and LPL Financial)
- Qiadong Zhao with Cetera Investment Services (previously with Cetera Investment Advisers and LPL Financial)
- Rebecca Ng-Tsang currently unaffiliated (previously with Cetera Investment Services and LPL Financial)
- Shuhong Rong currently unaffiliated (previously with Cetera Investment Services and LPL Financial)
- Michael Shonsey with Brokers Financial (previously with Brokers International Financial Services and LPL Financial)
- Yin Zhong with NI Advisors (previously with Cetera Investment Services and LPL Financial)
- Luann Chapmangatts with Securities America (previously with Securities America Advisors and LPL Financial)
- Michael Meehan with LPL Financial (previously with Lincoln Financial Advisors Corporation and Metlife Securities)
- Anthony Coyne with LPL Financial (previously with Householder Group Estate & Retirement Specialists and WM Financial Services)
- Allen Ostrofe currently unaffiliated (previously with LPL Financial and National Planning Corporation)
- William Powell currently unaffiliated (previously with USA Financial Securities Corporation and LPL Financial)
- Lawrence Potomac with LPL Financial (previously with Financial Insight Corporation and Associated Securities Corp.)
- Jonathan Cummings with LPL Financial (previously with Securities America Advisors and Securities America)
- Steven Dean with Northeast Planning Associates (previously with LPL Financial and Mutual Service Corporation)
- James Kidwell currently unaffiliated (previously with LPL Financial and Proequities)
- Thomas Griffiths with LPL Financial (previously with Great Valley Advisor Group and Strategic Wealth Advisors Group)
- John Dixon with Independent Financial Group (previously with LPL Financial and Bancwest Investment Services)
- James Helfinstine with LPL Financial (previously with National Planning Corporation)
- Gregory Henning with LPL Financial (previously with Uvest Financial Services Group)
- Kevin Houser with Ameriprise Financial Services (previously with LPL Financial and Wachovia Securities)
- Scott Klor currently unaffiliated (previously with LPL Financial and Uvest Financial Services Group)
- Peter Knittle with American Portfolios Financial Services (previously with American Portfolios Advisors and LPL Financial)
- William Knudsen with LPL Financial (previously with The Huntington Investment Company and Chase Investment Services Corp.)
- Charles Larocca with LPL Financial (previously with New England Securities)
- Margaret Logue with LPL Financial (previously with Citigroup Global Markets)
- Stacee Love-Malcolm with LPL Financial (previously with Financial Advocates Investment Management and Allstate Financial Services)
- Thomas Munker with Creative One Securities (previously with LPL Financial and Woodbury Financial Services)
- Thomas McCusker currently unaffiliated (previously with LPL Financial and Merrill Lynch, Piere, Fenner & Smith Incorporated)
- Jeffrey McMahon with LPL Financial (previously with BB&T Investment Services and Wells Fargo Advisors)
- Randy Peyman with LPL Financial (previously with SII Investments and Fortis Investors)
- Joffre Salazar currently unaffiliated (previously with American Portfolios Financial Services and LPL Financial)
- William Saplicki with LPL Financial (previously with First Allied Advisory Services and First Allied Securities)
- Erich Raasch with LPL Financial (previously with Invest Financial Corporation and Primevest Financial Services)
- Andrew Quinn with LPL Financial (previously with Banc of America Investment Services and Quick & Reilly)
- Thomas Polito with Citizens Securities (previously with Cetera Investment Advisers and LPL Financial)
- Samuel Phillips with LPL Financial (previously with Invest Financial Corporation and Nationwide Securities)
- Darin Stevens with LPL Financial (previously with Blue Water Asset Management and Invest Financial Corporation)
- Yvonne Silguero with LPL Financial (previously with Raymond James Financial Services)
- Antonio Reyna with Securities America (previously with Securities America Advisors and LPL Financial)
- Michael Weinand with LPL Financial (previously with KMS Financial Services and Lincoln Financial Advisors Corporation)
- Jake Warrington currently unaffiliated (previously with LPL Financial and MML Investors Services)
- John Welp with LPL Financial (previously with Invest Financial Corporation and ONB Investment Services)
- Jason Anderson currently barred (previously with Merrill Lynch, Piere, Fenner & Smith Incorporated and LPL Financial)
- Lawrence Avery with LPL Financial (previously with Edward Jones and Robert W. Baird & Co. Incorporated)
- Patrick Boland with LPL Financial (previously with Woodbury Financial Services and Proequities)
- Jason Boley with LPL Financial (previously with BMO Harris Financial Advisors and J.P. Morgan Securities)
- Keri Blake with LPL Financial (previously with Wealthcare Advisory Partners and Edward Jones)
- Justin Byrd with LPL Financial (previously with MML Investors Services, LLC NYLife Securities LLC)
- Johnny Ceballos with LPL Financial (previously with Golden State Wealth Management and Edward Jones)
- Andrew Wesner with LPL Financial (previously with Merrill Lynch, Piere, Fenner & Smith Incorporated)
- Cheryl Marquez with LPL Financial (previously with Waddell & Reed)
- Alex Gutierrez with LPL Financial (previously with TD Ameritrade and TD Ameritrade Investment Management)
- Bradley Hill with LPL Financial (previously with Cuso Financial Services and Edward Jones)
- Brent Jackson with LPL Financial (previously with Prudential Financial Planning Services and Pruco Securities)
- Burton Apfelbaum with LPL Financial (previously with MML Investors Services and Pruco Securities Corporation)
- Alfred Amato with LPL Financial
- Alan Fryman with Peak Brokerage Services (previously with Blackridge Asset Management and LPL Financial)
- Cesar Macedo with LPL Financial (previously with FSC Securities)
- Charles Salfity with LPL Financial (previously with The Householder Group, Estate & Retirement Specialists and Sunamerica Securities)
- Andrew Dittberner with LPL Financial (previously with A.G. Edwards & Sons and Edward D. Jones & Co.)
- Christopher Hargis with LPL Financial (previously with Primevest Financial Services)
- Cole Mills with LPL Financial (previously with Waddell & Reed)
- Curtis Howard with LPL Financial (previously with Golden State Wealth Management and Integrity Wealth Advisors)
- David Venegas with LPL Financial (previously with Cuna Brokerage Services and Questar Asset Management)
- David Nastri with LPL Financial (previously with Uvest Financial Services Group and Webster Investment Services)
- David Givnish with LPL Financial (previously with National Planning Corporation and Win Win Investment Planning)
- Dawn West with LPL Financial (previously with Capital One Advisors and Capital One Financial Advisors)
- Diane Hutchings currently unaffiliated (previously with LPL Financial and Pruco Securities)
- Dominic Debruin currently barred (previously with LPL Financial and Waddell & Reed)
- Don Rudolph currently unaffiliated (previously with LPL Financial and Invest Financial)
- Donovan Ehrman with LPL Financial (previously with Cuna Brokerage Services and Strategic Advisers)
- Edward Miller with LPL Financial (previously with Financial Resources Group Investment Services and Uvest Financial Services Group)
- Edwin Egger with LPL Financial (previously with Merrill Lynch, Pierce, Fenner & Smith Incorporated)
- Ernest Renner with LPL Financial (previously with SLR Financial and Allpoint Financial Group)
- Eugene Yelverton with LPL Financial (previously with Securities America Advisors and Securities America)
- Frederick Guist with LPL Financial (previously with SII Investments and Ameritas Investment)
- Gary Barney with LPL Financial (previously with Securities America and The O.N. Equity Sales Company)
- George Jameson currently unaffiliated (previously with LPL Financial and Morgan Stanley)
- Gleason Swassing III currently unaffiliated (previously with LPL Financial and Edward Jones)
- Gregory Shoemaker with LPL Financial (previously with Cornerstone Wealth Management and Edward Jones)
- Gregory Kearney with LPL Financial (previously with Uvest Financial)
- Guillermo Gastelum with LPL Financial (previously with BBVA Securities and BBVA Compass Investment Solutions)
- Ian Baker with LPL Financial (previously with IHT Wealth Management and Private Advisor Group)
- Ilan Tsapovski with LPL Financial (previously with Citigroup Global Markets and Merrill Lynch, Pierce, Fenner & Smith Incorporated)
- Jack Biedebach with LPL Financial (previously with City National Securities and Chase Investment Services)
- James Wagner with LPL Financial (previously with Waddell & Reed)
- Jeanann Kramer with LPL Financial (previously with Gateway Wealth Partners and Advisors’ Pride)
- Jonathan Bridges with LPL Financial (previously with Edward Jones)
- John Pelletier with LPL Financial (previously with BMO Harris Financial Advisors and M&I Financial Advisors)
- Joseph Altic with LPL Financial (previously with ADK Wealth Advisory Group and American Express Financial Advisors)
- Joseph Pearce with LPL Financial (previously with Ameriprise Financial Services and IDS Life Insurance Company)
- Julius Pappas with LPL Financial (previously with MML Investors Services and MSI Financial Services)
- Keith Laterrade with LPL Financial (previously with Edward Jones)
- Kenneth Klein with LPL Financial (previously with Hornor, Townsend & Kent)
- Kenneth Christie with LPL Financial (previously with Spectrum Wealth Advisory Group and The Wealth Consulting Group)
- Lee Nordstrom currently barred (previously with LPL Financial and Vorpahl Wing Securities)
- Marcus McGlasson currently unaffiliated (previously with LPL Financial and Raymond James Financial Services)
- Mark Burns with LPL Financial (previously with The Wealth Consulting Group and Abound Financial)
- Mark Hoover with LPL Financial (previously with Waddell & Reed)
- Mark Miller with LPL Financial (previously with PFS Investments)
- Matthew Macek currently unaffiliated (previously with LPL Financial and Wells Fargo Clearing Services)
- Melinda McCullough with LPL Financial (previously with BFC Planning and Berthel Fisher & Company Financial Services)
- Merri Hall with LPL Financial (previously with M&T Securities and Cadaret, Grant & Co.)
- Michael Mattie currently unaffiliated (previously with LPL Financial and Wachovia Securities)
- Michael Fetzner with LPL Financial (previously with Royal Alliance Associates and Summit Financial Services)
- Michael Hatch with LPL Financial (previously with American Express Financial Advisors and IDS Life Insurance Company)
- Michael Rainbolt with LPL Financial
- Michael McHugh with LPL Financial (previously with IFG Network Securities)
- Michael Haley with LPL Financial (previously with National Planning Corporation and Marketing One Securities)
- Natasha Titova with LPL Financial (previously with Highpoint Planning Partners and Level Four Advisory Services)
- Nicholas Canuso with LPL Financial (previously with Rothman Securities and NYLife Securities)
- Patrick Pepper with LPL Financial (previously with Edward Jones and Morgan Stanley)
- Peter Smith currently unaffiliated (previously with LPL Financial and Raymond James Financial Services)
- Randy Kirkpatrick with LPL Financial (previously with Stratos Wealth Partners)
- Raymond Velasco, Sr. currently unaffiliated (previously with LPL Financial and Metlife Securities)
- Robert Patti with LPL Financial (previously with Stratos Wealth Partners and Zacks Investment Management)
- Robert Cadena, Jr. with LPL Financial (previously with Invest Financial Corporation and MML Investors Services)
- Robert Berry currently unaffiliated (previously with LPL Financial and Wells Fargo Advisors)
- Ronald Mahorney currently unaffiliated (previously with LPL Financial and Painewebber Incorporated)
- Ryan Purkiss with LPL Financial (previously with First Allied Securities and Wachovia Securities)
- Samuel Izaguirre with LPL Financial (previously with Independent Financial Partners and Chase Investment Services Corp.)
- Shannon Neal with LPL Financial (previously with Invest Financial Corporation and Investment Professionals)
- Steven Rose currently unaffiliated (previously with LPL Financial and MML Investors Services)
- Steven Farley currently unaffiliated (previously with LPL Financial and Edward D. Jones & Co., L.P.)
- Teresa Owsley with LPL Financial (previously with Stratos Wealth Partners and Huntington Investment Company)
- Timothy Avila currently unaffiliated (previously with LPL Financial)
- Todd Warner currently unaffiliated (previously with LPL Financial and Metlife Securities)
- William Dendy with Raymond James Financial Services (previously with LPL Financial and Prospera Financial Services)
- Kenneth Baize with LPL Financial (previously with American Capital Management and American Equity Investment Corporation)
- Loreen Gilbert with LPL Financial (previously with 401 (K) Investment Advisors and Princor Financial Services Corporation)
- Ryan Hall with LPL Financial (previously with Centaurus Financial and MML Investors Services)
- Claiborne Lagrone with LPL Financial (previously with Hancock Whitney Investment Services and Allstate Financial Advisors)
- Duncan MacEachern with LPL Financial (previously with Centaurus Financial and Wachovia Securities)
- Matthew Engelau with LPL Financial
- Paul Celentano Jr. with LPL Financial (previously with Harbor Financial Services and Metlife Securities)
- Russell Pierce with Newbridge Securities Corporation (previously with Newbridge Financial Services Group and LPL Financial)
- Chadwick Richards with LPL Financial (previously with Waddell & Reed)
- Troy Talamelli with First Citizens Investor Services (previously with LPL Financial and Allianz Global Investors Distributors)
- Trent Bryson with LPL Financial (previously with Global Retirement Partners and Independent Financial Partners)
- Chad Zitzelsberger with LPL Financial (previously with Total Investment Planners and Northwestern Mutual Investment Services)
- Norman Coates with Securities America (previously with Securities America Advisors and LPL Financial)
- Denise Deleo with LPL Financial (previously with Waddell & Reed)
- Brenton Ditto with LPL Financial (previously with Private Advisor Group and J.J.B. Hilliard, W.L. Lyons)
- Jeffrey Karp with LPL Financial (previously with Mony Securities Corporation and Trusted Advisors)
- Rick Kent with Merit Financial Advisors (previously with LPL Financial and Lifestyle Planning Solutions)
- David Nieset with LPL Financial (previously with Avantax Advisory Services and Avantax Investment Services)
- Andy Rampersaud with LPL Financial (previously with Securities America Advisors and Securities America)
- Eric Schwartz with LPL Financial (previously with Kinecta Financial & Insurance Services and First Brokerage America)
Did Misconduct By an LPL Financial Advisor Impact Your Investments?
If you have lost money investing with any of these LPL Financial advisors or others within this brokerage firm, it’s important that you reach out to an investment loss attorney quickly because the statutes of limitations can bar your claims. Call our legal team at Patil Law toll-free at 1-800-950-6553 or reach out to us via the secure and private online form for a free initial consultation.
LPL Financial Has Many Regulatory Complaints and Fines
There have been approximately one hundred eighty-seven (187) state and self-regulatory body disclosure events against LPL Financial; that is, final and formal proceedings initiated by a regulatory authority like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) for a violation(s) of investment-related rules or regulations. In addition, there have been countless customer complaints filed against LPL Financial for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record.
Our legal team at Patil Law has reported and written about these regulatory problems and customer complaints over many years. A few of the notable FINRA Sanctions for its Supervisory Failures are below.
A Closer Look Into LPL Financials’ Regulatory Issues
LPL Financial has been repeatedly censured, warned, and fined for its own misconduct and failure to supervise its army of financial advisors. Details of one hundred eighty-seven regulatory issues are listed below:
Fined $3.1 Million for Alleged Supervisory Failures Allowing Financial Advisors to Forge Customer Signatures (AWC No. 2020067897601)
Overview from FINRA’s Disciplinary Office:
From May 2018 to August 2020, LPL failed to establish and maintain a system reasonably designed to supervise the transmission of customer funds by wire or check to third parties and to respond reasonably to red flags of potential conversion. During this period, two LPL representatives, acting independently of each other, converted approximately $2.4 million from 13 LPL customers through third-party transfers.2 As a result, LPL violated FINRA Rules 3110(a) and 2010.
In addition, from January 2018 through January 2022, LPL failed to have a supervisory system reasonably designed to detect possible instances of signature forgery or falsification. During this period, at least 50 LPL registered representatives electronically signed another person’s name on over 1,000 LPL documents, including on documents which were required books and records of the firm. One was an electronic forgery on a wire transfer request form in August 2020, which was part of the conversion described above. As a result, LPL violated FINRA Rules 3110(a) and 2010, as well as Section 17(a) of the Securities Exchange Act of 1934 (“Exchange Act”), Exchange Act Rule 17a-3, and FINRA Rules 4511 and 2010.
Fined $150,000 for Alleged Supervisory Failures in Investigating Registered Representative’s Undisclosed Outside Business Activities (AWC No. 2020067764002)
Overview from FINRA’s Disciplinary Office:
From September 2018 through August 2019, LPL failed to investigate red flags related to a registered representative’s (the Representative) undisclosed outside business activities, and as a result, the firm failed to reasonably supervise transfers of funds by the Representative’s LPL customers to third parties, including a purported investment advisory firm (the Entity), after which the customers’ funds were converted by a third party. As a result, LPL violated FINRA Rules 3110 and 2010.
Fined $300,000 for Alleged Miscalculation of Required Customer Reserve Obligations (AWC No. 2020068870301)
Overview from FINRA’s Disciplinary Office:
Between at least December 2018 and April 2020, Respondent failed to accurately calculate its required customer reserve, resulting in two hindsight deficiencies, totaling approximately $162 million. As a result, Respondent violated § 15(c) of the Securities Exchange Act of 1934, Exchange Act Rule 15c3-3(e), and F1NRA Rule 2010. The firm’s failure to accurately calculate its customer reserve obligations caused the firm to maintain inaccurate books and records and to file at least 17 Financial and Operational Combined Uniform Single (FOCUS) reports that inaccurately reported its customer reserve. As a result, Respondent violated Exchange Act § 17(a), Exchange Act Rules 17a-3 and 17a-5, and FINRA Rules 4511 and 2010. In addition, Respondent’s supervisory system, including written procedures, was not reasonably designed to achieve compliance with customer reserve requirements. As a result, Respondent violated FINRA Rules 3110 and 2010.
Fined $982,354 for Alleged Supervisory Failures Allowing Financial Advisors to Make Recommendations to Customers Specifically, The Rollover of 529 Savings Plan Investments from One State Plan to Another (AWC No. 2019062530101)
Overview from FINRA’s Disciplinary Office:
From January 2013 to March 2020, LPL failed to establish and maintain a supervisory system reasonably designed to supervise registered representatives’ recommendations to customers that they rollover 529 savings plan investments from one state plan to another. Specifically, LPL did not have policies, procedures or training regarding available sales charge waivers or special share classes that decreased the cost of 529 plan rollover transactions. As a result of the foregoing, LPL violated MSRB Rule G-27. LPL voluntarily self-reported potential issues with its supervisory system to FINRA as part of FINRA’s 529 Plan Share Class Initiative announced in Regulatory Notice 19-04 and proposed a plan to remediate affected customers.
Accordingly, this AWC includes an order for restitution plus interest of $1,203,392, to be paid to owners of 1,941 accounts, and a censure, but no fine.
Fined $6,500,000 for Alleged Supervisory Failures in Complying with the Three Regulatory Obligations: Record Retention, Fingerprinting and Screening of Associated Persons, and Supervision of Consolidated Reports (AWC No. 2018059192701)
Overview from FINRA’s Disciplinary Office:
LPL failed to establish and maintain a supervisory system, including written procedures, reasonably designed to achieve compliance with three regulatory obligations: record retention, fingerprinting and screening of associated persons, and supervision of consolidated reports.
Federal securities laws and regulations and FINRA rules require broker-dealers to maintain certain broker-dealer and customer records in a form and manner designed to prevent their loss, alteration, or deletion. Protecting the integrity of these required records is an essential obligation for broker-dealers because review of such records is the primary means by which regulators protect investors and examine for misconduct.
From January 2014 to September 2019, LPL failed to establish and maintain a supervisory system, including written procedures, reasonably designed to achieve compliance with certain of its record retention obligations, in violation of NASD Rule 3010 and FINRA Rules 3110 and 2010. As a result, among other things, the firm failed to retain electronic records in the required format, preserve certain electronic records, and notify FINRA prior to employing electronic storage media, in violation of Exchange Act § 17(a), Exchange Act Rule 17a-4 and FINRA Rules 4511 and 2010. The firm’s failure affected at least 87 million records and led to the permanent deletion of over 1 5 million customer communications maintained by a third-party data vendor. Further, LPL failed to send account notices that are required to be sent to customers at 36-month intervals for each account in which a suitability determination had been made (36-Month Letters) to over one million customers in violation of Exchange Act § 17(a), Exchange Act Rule 17a-3, and FINRA Rules 4511 and 2010.
Federal securities laws also require that FINRA member firms fingerprint associated persons prior to or upon association with a broker-dealer. Member firms review the fingerprint results as part of their background check to determine, among other things, whether a prospective associated person has previously engaged in misconduct that subjects that person to a statutory disqualification. As set forth in Exchange Act § 3(a)(39), certain criminal and regulatory events will subject a person to a statutory disqualification. Among other things, the fingerprint results provide information about a prospective associated person’s criminal background. From January 2014 through the present, LPL failed to fingerprint more than 7,000 non-registered associated persons and thus failed to screen these individuals for statutory disqualification based on criminal convictions. This failure arose from the firm’s failure to maintain a reasonable supervisory system and procedures to identify and properly screen all individuals who became associated with the firm in a non-registered capacity. The firm self-reported this failure to FINRA and commenced a remedial review. Separately, from January 2017 to September 2019, LPL permitted a non-registered associated person, who was subject to statutory disqualification, to remain associated with the firm. As a result of the foregoing, LPL violated Article III, Section 3(b), of FINRA’s By-Laws, Exchange Act § 17(a) and (f), Exchange Act Rules 17a-3 and 17f-2, NASD Rule 3010, and FINRA Rules 3110, 4511, and 2010.
Finally, from May 2015 to the present, LPL failed to establish and maintain a supervisory system reasonably designed to supervise certain consolidated reports. LPL was not aware of, and therefore failed to reasonably supervise, certain tools that its approved third-party vendors provided to the firm’s registered representatives to create and disseminate consolidated reports. In particular, the firm’s vendors created “non-finalized” consolidated reports, which, although intended for internal use, could be sent to customers. Nonetheless, the vendors did not send such reports to LPL and the firm therefore did not review them. The firm’s vendors also allowed representatives and customers to directly access consolidated reports on the vendors’ websites, and the firm did not receive or review consolidated reports that its representatives disseminated in this manner. The firm also failed to review assets that were manually entered by representatives on consolidated reports when the representatives categorized them as “non-securities related,” even when the manually entered assets were evidently securities-related. A former registered representative of the firm exploited these supervisory deficiencies in perpetrating a Ponzi scheme through which he converted at least $1,000,000 of LPL customers’ money. As a result, LPL violated Exchange Act § 17(a), Exchange Act Rule 17a-4, and FINRA Rules 3110, 4511, and 2010.
Fined $300,000 for Alleged Supervisory Failures in Establishing, Maintaining, and Enforcing the Written Supervisory Procedures (“WSPs”) (AWC No. 2018058621001)
Overview from FINRA’s Disciplinary Office:
From January 1, 2014 through September 30, 2018 (the “Relevant Period”), LPL failed to establish and maintain a supervisory system, and failed to establish, maintain, and enforce written supervisory procedures (“WSPs”), reasonably designed to achieve compliance with FINRA Rule 2090, which requires member firms to use “reasonable diligence” to determine “the essential facts” concerning every customer, including the “authority of each person acting on behalf of such customer.” Specifically, with respect to accounts established under the Uniform Gifts to Minors Act and/or the Uniform Transfers to Minors Act (collectively, “UTMA Accounts”), the Firm failed to establish, maintain, and enforce supervisory systems and procedures to take into account changes in the authority of custodians of such accounts to effect transactions on behalf of the beneficiaries of those accounts. Based on the foregoing, LPL violated NASD Rules 3010(a) and 3010(b), and FINRA Rules 3110(a), 3110(b), and 2010.
Fined $2.75 Million for Alleged Failure of Its Automated Anti-money Laundering (“AML”) Surveillance System and Supervisory Failures in Filing Critical Information With the Government and With FINRA (AWC No. 2016050751901)
Overview from FINRA’s Disciplinary Office:
As a result of AML program and supervisory failures, the Firm failed to file with the government and with FINRA information critical to the protection of investors and the public.
First, as a result of its unreasonably designed AML program, the Firm failed to investigate certain attempts to gain unauthorized access to electronic systems and potential illegal activity carried out by electronic systems (collectively “cyber related events”) that should have resulted in the filing of Suspicious Activity Reports (“SARs”). This failure stemmed primarily from the Firm’s use of a “fraud case chart” that provided inaccurate guidance to the Firm’s AML employees concerning investigation and reporting requirements associated with suspicious activity related to incidents when third parties used electronic means to attempt to compromise a customer’s email or brokerage account. As a result of employees’ reliance on the inaccurate fraud case chart, among other things, the Firm failed to investigate certain cyber-related events and to file more than 400 SARs; over half of the subsequently filed SARs indicate that the cyber-events were unsuccessful.
Second, the Firm failed to file or amend Forms U4 or US to report certain customer complaints. Specifically, the Firm too narrowly interpreted the requirement that a complaint contain “a claim for compensatory damages of $5,000 or more.” The Firm incorrectly interpreted this phrase to mean that it was not required to report any complaint that did not expressly request compensation, even in instances when the customer alleged a specific sales practice violation that caused him or her a loss of $5,000 or more, and the complaint, when viewed as a whole, made clear that the investor was seeking compensation for such loss. As a result, the Firm failed to report on Forms U4 and U5 at least 31 reportable customer complaints alleging sales practice violations involving the Firm’s registered representatives. The Firm also failed to amend in a timely manner its registered representatives’ Forms U4 and U5 to disclose at least 149 customer complaints and other reportable events, including judgments, bankruptcies, terminations, and regulatory and criminal actions.
By reason of the foregoing, LPL violated Article V, Sections 2 and 3 of the FINRA By-Laws, NASD Rule 3010 and FINRA Rules 3110, 3310 and 2010.
Fined $750,000 for Alleged Failure to Maintain Over 18.3 Million Electronic Communications In Non-Erasable And No-Rewritable Format Known As WORM (Write Once, Read Many) Format (AWC No. 2014043539001)
Overview from FINRA’s Disciplinary Office:
From December 23,2010 to November 17, 2015, the Firm failed to maintain over 18.3 million electronic communications in non-erasable and no-rewritable format, known as WORM format, as required by Section 17(a) of the Exchange Act, Rule 17a-4(f) thereunder, NASD Rule 3110 and FINRA Rule 4511. WORM stands for “write once, read many,” and is intended to prevent the alteration or destruction of broker-dealer records maintained on electronic storage media. Additionally, from January 1, 2010 to June 24, 2016, the Firm failed to retain in WORM format approximately 231 check registers. Finally, LPL’s written supervisory procedures failed to have an adequate supervisory process concerning WORM compliance, in violation ofNASD Rule 3010 and FINRA Rule 3110.
Fined $900,000 For Alleged Supervisory Failures In Sending, And Producing Records Of Account Notices Required Under The Exchange Act (AWC No. 2015045887301)
Overview from FINRA’s Disciplinary Office:
From 2009 to the present, LPL failed to send, and to create records that it had sent to customers, more than 1.6 million account notices required under Rule 17a-3(a)(17) of the Exchange Act. The Exchange Act rule requires these account notices be sent to customers at 36-month intervals for each account in which a suitability determination had been made. Over this seven-year period, LPL failed to send over 25 percent of the required notices. As a result, LPL violated Rule 17a-3(a)(17), NASD Rules 3110 and FINRA Rules 4511 and 2010.
In addition, the Firm failed to establish, maintain and enforce a supervisory system and written supervisory procedures reasonably designed to achieve compliance with applicable laws and regulations relating to the creation and distribution of such account records. As a result, LPL violated NASD Rule 3010, and FINRA Rules 3110 and 2010.
Fined $375,000 For Alleged Supervisory Failures In Supervising Sales of Brokered Certificates of Deposit (AWC No. 2015045703001)
Overview from FINRA’s Disciplinary Office:
From January 2010 through at least December 2016 (the “Relevant Period”), LPL failed to reasonably supervise the sale of certain brokered certificates of deposit (“Brokered CDs”), which the firm characterized as non-security CDs because they were FDIC insured instruments. In particular, the Firm failed to ensure that (1) its registered representatives were trained on all material risks and features of Brokered CDs and (2) the Firm adequately disclosed all material risks and features of Brokered CDs to customers. By virtue of the foregoing, LPL violated NASD Rule 3010(a), and. FINRA Rules 3110(a) and 2010.
Fined $5.72 Million For Alleged Unfair Treatment of Certain Retirement Plan And Charitable Organization Customers (AWC No. 2015045270901)
Overview from FINRA’s Disciplinary Office:
Since at least July 1, 2009, the Firm has disadvantaged certain retirement plan and charitable organization customers who were eligible to purchase Class A shares in certain mutual funds without a front-end sales charge (“Eligible Customers”). These Eligible Customers were instead sold Class A shares with a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses. During this period, LPL has failed to establish and maintain a supervisory system and procedures reasonably designed to ensure that Eligible Customers who purchased mutual fund shares received the benefit of applicable sales charge waivers. As a result, the Firm violated NASD Conduct Rule 3010 (for misconduct before December 1, 2014) and FINRA Rules 3110 (for misconduct on or after December 1, 2014) and 2010.
Fined $10 Million for Alleged Failure in Allocating Enough Resources for Supervisory Duties (AWC No. 2013035109701)
Overview from FINRA’s Disciplinary Office:
Beginning in 2007, LPL Financial Holdings, Inc. pursued a strategy of significantly increasing the size of its wholly-owned broker-dealer subsidiary, LPL. This strategy included acquiring numerous financial services firms, consolidating them with LPL and recruiting registered representatives from other broker-dealers. From 2007 ?o 2013, the number of registered representatives grew from approximately 8,322 to 17,601: and the Firm’s revenues grew from approximately $2.28 billion for the fiscal year ended December 31,2007 to approximately $4.05 billion for the fiscal year ended December 31,2013.
The Firm, however. did not accompany this rapid growth with a concomitant dedication of sufficient resources to permit the Firm to meet its supervisory obligations. As a result, the Firm failed to have adequate systems and procedures in place of supervising certain aspects of its business, including the sales of particular complex products and the review of trades and delivery of trade confirmations.
For example, LPL failed to reasonably supervise its sales of complex non-traditional exchange traded funds ( ‘ETFs ). The Firm failed to monitor the length of time these securities were held in customer accounts, permitted the breach of the Firm’s allocation limits, failed to deliver prospectuses to customers buying these securities, and permitted sales by certain representatives who had not taken the mandatory Firm-developed training on the risks of these products. LPL failed to reasonably supervise its sales of variable annuities, in some instances permitting sales without disclosing surrender fees. The Firm used a faulty automated surveillance system that excluded certain mutual fund ‘switch’ transactions from supervisory review, and it failed to reasonably supervise sales of Class C mutual fund shares. The Firm also failed to supervise sales of ‘non-traded real estate investment trusts (REITS) by, among other things, failing to identify accounts eligible for volume sales charge discounts (volume discount).
Multiple deficiencies affected LPL’s systems for reviewing trading activity in customer accounts. The Firm used a surveillance system, which, due to technical flaws, failed to generate alerts for certain high-risk activity including low priced equity transactions, actively traded accounts, asset movements, and potential employee front-running. The Firm used a separate, but faulty, automated system to review its trade blotter, but this system failed to display trading activity past due for supervisory review. The Firm failed to deliver trade confirmations to customers investing in LPL advisory programs resulting from deficiencies that affected over 67,000 accounts and 14 million trades, and it failed to report certain trades to FINRA and MSRB.
As a result, LPL violated numerous federal securities laws and FINRA and MSRB rules.
(AWC No. 2012031659001)
Overview from FINRA’s Disciplinary Office:
In Trading and Market Making Surveillance (“TMMS”) Examination No. 20120316590, the staffofFINRA’s Department of Market Regulation reviewed the trading activity of the the firm as set forth in Exhibit 1 for trade date August 22, 2012 (the “TMMS review period”).
In Review No. 20120337436, the Trade Reporting and Compliance Engine (“TRACE”) Team of the Department of Market Regulation reviewed TRACE reporting by the firm for the period of February 6, 2012 through June 30,2012 (the “TRACE review period”).
Fined $950,000 for Alleged Supervisory Failures In Identifying and Determining Whether Transactions were in Contravention of Firm, Prospectus or State Suitability Standards and Failure to Provide Written Supervisory Procedures (AWC No. 2011027170901)
Overview from FINRA’s Disciplinary Office:
Between January 1, 2008 and July 1, 2012, the Firm violated NASD Rule 3010(a) and 3010(b), NASD Rule 2110 and FINRA Rule 2010 by failing to implement an adequate supervisory system for the sale of alternative investments that was reasonably designed to achieve compliance with NASD Rule 2310, and state suitability requirements. Specifically, the Firm failed to have a reasonable supervisory system and procedures to identify and determine whether purchases of non-traded real estate investment trusts (REITs), oil and gas partnerships, business development companies (“BDCs”), equipment leasing programs, real estate limited partnerships (Real estate LPs”), hedge funds, managed futures and any other illiquid pass-through investments (collectively, Alternative Investments) caused a customer’s account to be unsuitably concentrated in Alternative Investments in contravention of LPL, prospectus or certain state suitability standards. The computer system and written materials used by LPL’s supervisory personnel did not consistently identify Alternative Investment transactions that fell outside LPL’s internal suitability guidelines, prospectus or state suitability standards. In addition, the Firm did not adequately train its supervisory staff to appropriately analyze state suitability standards as part of their suitability review of certain Alternative Investment transactions.
The Firm also failed to have compliance or written supervisory procedures (WSPs) reasonably designed to achieve compliance with NASD Rule 2310 and state suitability requirements. Specifically, the Firm’s WSPs did not delineate the supervisory steps to be taken with respect to Alternative Investment transaction reviews. In addition, the WSPs failed to offer any guidance to its registered representatives or reviewing principals regarding analyzing the state suitability standards for certain Alternative Investments such as REITs, BDCs and managed futures.
As a result of these supervisory deficiencies, between January 1,2008 and July 1, 2012, a sampling of REIT transactions revealed that LPL approved 106 Alternative Investment transactions in contravention of Firm, prospectus or state suitability standards.
Fined $7.5 Million for Alleged Supervisory Failures In Supervising Representatives and Responding to Regulatory Requests (AWC No. 2012032218001)
Overview from FINRA’s Disciplinary Office:
From 2007 to 2013, LPL’s email review and retention systems failed repeatedly, leaving the firm unable to meet its obligations to supervise its representatives and respond to regulatory requests. The firm was aware of these pervasive failures and the overwhelming complexity of its email system, but never took adequate remedial measures to address these shortcomings or simplify its email system. As a consequence, the firm suffered at least 35 significant failures that prevented it, at various points in time, from accessing hundreds of millions of emails and reviewing tens of millions of emails. Because of LPL’s numerous deficiencies in retaining and surveilling emails, it failed to produce all requested email to certain regulators, and also likely failed to produce all emails to certain private litigants and customers in arbitration proceedings.
The firm had ample notice of, and many opportunities to correct, the numerous failings of its email system. In 2010, an internal audit of LPL’s email supervision system had preliminarily discovered certain anomalies in the firm’s surveillance of emails. This audit was stopped by a senior audit executive. If the audit had continued as scheduled, it would have likely uncovered one of LPL’s significant supervision problems—its failure to supervise certain “doing business as” (“DBA”) email addresses. In addition, senior LPL executives were informed about the firm’s numerous email failings, including supervision of DBA email, at a September 2010 Risk Oversight Committee (“ROC”) meeting. Shortly after this meeting, a project was approved to address some of LPL’s email deficiencies. However, the firm never implemented this project.
In July 2011, the firm reported its failure to review DBA emails, which eventually was determined to affect over 28 million emails, to FINRA pursuant to Rule 4530(b). In response to a request from FINRA staff for more information about this significant email issue, LPL submitted a letter and chronology that inaccurately stated that the issue had been discovered in June 2011 even though certain LPL personnel had information that would have led to the discovery of the issue as early as 2008. Moreover, the letter stated that there were no red flags suggesting any issues with DBA email accounts. In fact, there were numerous red flags related to the supervision of DBA emails that were known to many LPL employees years prior to the firm’s Rule 4530 report.
(AWC No. 2009020204701)
Overview from FINRA’s Disciplinary Office:
In connection with matter 20090202047, the Fixed Income team of the Department of Market Regulation staff (“staff”) reviewed the firm’s compliance with municipal bond fair pricing requirements during the period from January 1,2009 through March 31,2009 (the ”municipal bond review period”).
In connection with matter 20090209494, the Fixed Income staff reviewed the firm’s compliance with corporate bond fair pricing requirements during the period from January 1,2009 through March 31,2009 (the “corporate bond review period”).
Fined $400,000 for Alleged Supervisory Failures In Monitoring and Ensuring Timely Delivery of Mutual Fund Prospectuses (AWC No. 2011029101501)
Overview from FINRA’s Disciplinary Office:
From January 1,2009 through June 30,20-11 (the “Relevant Mutual Fund Review Period”), LPL failed to implement and maintain adequate supervisory systems and procedures to monitor and ensure the timely delivery of mutual fund prospectuses, as required by Section 5(b)(2) of the Securities Act of 1933 (the “Securities Act”). This failure violated NASD Conduct Rule 3010(a)(1) and (b)(1), which also constitutes a violation of FINRA Rule 2010.
(AWC No. 2010024975401)
Overview from FINRA’s Disciplinary Office:
In connection with matter 20100249754, the Fixed Income team of the Department of Market Regulation staff (“staff”) reviewed the firm’s compliance with MSRB reporting requirements during the period from July 1, 2010 through September 30, 2010.
In connection with matter 20110263185, the staff reviewed the firm’s compliance with TRACE reporting requirements during the period from October 1, 2010 through December 31, 2010.
(AWC No. 2008012537201)
Overview from FINRA’s Disciplinary Office:
This matter is the result of three reviews. In Matter No. 20080125372, the OATS Compliance Team reviewed the firm’s compliance with Order Audit Trail System (“OATS”) reporting requirements during the period October 1 to December 31,2007. hi Matter No. 20080157723, the OATS Compliance Team reviewed the firm’s compliance with OATS reporting requirements during the period July 1 to September 30,2008. In Matter No. 20090171794, the TRACE Corporate Bonds Team reviewed the firm’s compliance with Trade Reporting and Compliance Engine (“TRACE”) reporting requirements during the period October 1 to December 31,2008.
Fined $25,000 for Alleged Failure to Review Broadcasts (AWC No. 2010021545201)
Overview from FINRA’s Disciplinary Office:
From March 2005 through March 2010, two LPL Representatives conducted more than 500 live call-in radio shows. Although the Firm’s procedures called for quarterly reviews, LPL failed to review the broadcasts.
Fined $100,000 for Alleged Failure to Subject Emails to a Sample Review (AWC No. 2009016570001)
Overview from FINRA’s Disciplinary Office:
For a year and a half, LPL failed to subject certain of its business-related emails to a sample review as required by its written supervisory procedures. This conduct violated NASD Conduct Rules 3010 and 2110 and FINRA Rule 2010.
Fined $100,000 for Alleged Supervisory Failures In Monitoring All Transmittals of Funds From Customers to Third Party Accounts (AWC No. 2009016922702)
Overview from FINRA’s Disciplinary Office:
During the period from December 2005 through October 2008, LPL failed to establish, maintain and enforce a supervisory system that was reasonably designed to review and monitor all transmittals of funds from the accounts of customers to third party accounts, in violation of NASD Rules 3010(a), 3012(a)(2)(B)(i)) and 2110. Specifically, LPL’s control procedures for review of third-party transmittals through the OSJ Review Tool did not address third-party journal transactions, LPL failed to document management approval of third party journals, and LPL failed to send confirmation letters to customers on seven occasions. As a result, journals from customer accounts were not identified where an LPL registered representative was converting cash and the proceeds from the sale of securities journaled out of customer accounts.
(AWC No. 2007011340401)
Overview from FINRA’s Disciplinary Office:
In connection with 20070113404, the staff of the Department of Market Regulation (the “staff’) reviewed the firm’s compliance with best execution requirements in corporate bond transactions during the period July 1,2007 through September 30,2007 (the “review period”).
Fined $175,000 for Alleged Supervisory Failures In Reviewing and Monitoring Its Variable Annuity Exchange Business (AWC No. 2009017682701)
Overview from FINRA’s Disciplinary Office:
On December 4, 2006, the Firm entered into an AWC in which FINRA found that it had failed to establish, maintain and enforce an adequate supervisory system reasonably designed to review and monitor its variable annuity exchange business. Pursuant to the AWC, LPL was required to retain an independent consultant to review and make recommendations regarding the Firm’s ongoing system-wide upgrades to its centralized online order-entry system that was designed to standardize and enhance the Firm’s overall review of variable annuity exchanges to reasonably ensure that it was in compliance with federal laws and NASD Rules relating to the sale of variable annuities.
While LPL implemented its new Annuity Order Entry system (“AOE”) by October 2008 and made the use of the system mandatory, the Firm failed to enforce the mandatory usage of the AOE by its registered representatives until October 2009. As a result, between October 2008 and October 2009, LPL registered representatives entered orders for approximately 15% of the Firm’s variable annuity exchange transactions using the Firm’s legacy automated system. By railing to enforce the mandatory use of the AOE system for this one year period, LPL failed to enforce its written supervisor)’ procedures relating to variable annuity exchange transactions in violation of NASD Rules 3010 and 2110 and FINRA Rule 2010.
Fined $125,000 for Alleged Unsuitable Securities Recommendations (AWC No. E062004027401)
Overview from FINRA’s Disciplinary Office:
This matter involves unsuitable recommendations of securities in 1999 and 2000 by Phillip Scott Eggers, a registered representative of Linsco/Private Ledger Corp., to six customers who had retired from their jobs at Procter & Gamble, rolled over their profit sharing plan accounts to Individual Retirement Accounts, and set up these accounts for systematic withdrawals under the provisions of Section 72(t) of the Internal Revenue Code, At times, Eggers used discretion, without written authority, to effect sales to fund certain of these withdrawal transactions. He also distributed misleading sales literature to the customers, Egger’s employing member firm, Linsco/Private Ledger Corp., failed to reasonably supervise him.
Fined $300,000 for Alleged Supervisory Failures In Establishing, Maintaining, and Enforcing Written Procedures for Variable Annuity Exchange Business (AWC No. EAF0400610003)
Overview from FINRA’s Disciplinary Office:
During the period January 1, 2003, to December 31, 2004 (“the review period”), LPL violated NASD Conduct Rules 3010 and 2110 by failing to establish, maintain, and enforce an adequate supervisory system, including written procedures, reasonably designed to review and monitor its variable annuity exchange business.
LPL’s supervisory system also relied, in significant part, upon automated, coded reports to evaluate its variable annuity exchanges. For all or part of the review period, those automated reports failed to capture certain information necessary for the proper evaluation of exchanges, such as whether a death benefit was lost, a comparison of contract charges, and a detailed reason for the exchange. In addition, LPL registered representatives occasionally failed to code their exchange transactions correctly on the automated reports, which may have caused compliance analysts not to identify and review certain transactions as exchanges
LPL’s policies and procedures called for the review of variable annuity transactions, including all exchanges, by registered principals as follows: Office of Supervisory Jurisdiction (“OSJ”) principals performed the initial review and approval of variable annuity exchange transactions submitted by registered representatives under their supervision (including registered representatives working at non-OSJ branch locations). Compliance Analysts in the LPL Compliance Department reviewed and approved variable annuity exchange transactions submitted by OSJ principals. Registered principals in the firm’s Compliance Department also examined certain transactions listed on surveillance reports utilized by LPL to identify transactions that might warrant additional supervisory review. In reviewing variable annuity exchange transactions, these OSJ principals and Compliance Department principals had available to them various sources of relevant information, including new account documentation, account records, applications and transactional paperwork, prospectuses or other offering documents, customer correspondence and registered representative notes. However, the firm’s written policies and procedures did not require that its principals utilize these sources of information and the firm did not provide adequate guidance to its principals regarding when or how to utilize some of such information.
LPL’s written procedures also provided insufficient guidance to compliance analysts in assessing the suitability of a variable annuity exchange. The procedures suggested that analysts review certain categories of information, such as investment objectives, age, and financial information. The procedures also suggested that analysts further review a variable annuity exchange if it met certain parameters. However, in some cases, certain information needed for the review, such as, whether the OSJ principal or registered representative was the agent of record on the original contract that was being exchanged and whether the facts and circumstances of each transaction supported the rationale for the exchange, was not readily available to supervisory personnel.
In light of these and other supervisory deficiencies relating to variable annuity exchanges, as discussed below, LPL violated NASD Rules 3010 and 2110.
Fined $2.40 Million for Alleged Purchase Recommendations to Customers Through Registered Representatives (AWC No. E112003071801)
Overview from FINRA’s Disciplinary Office:
This matter arises from a review of LPL’s sales of Class B and Class C shares of mutual funds between January 1,2002 and September 30,2003 (the “review period”). Within the review period LPL effected transactions where it made recommendations to customers to purchase Class B and Class C shares through its registered representatives, known as financial advisors (“FAs”). In connection with its recommendations, LPL did not consider or adequately disclose, at the point of purchase, on a consistent basis, that an equal investment in Class A shares would generally have been more advantageous for certain customers. Accordingly, LPL will undertake a remediation plan that includes a review of more than 22,423 transactions involving at least 2,070 customer households.
In particular, the firm did not adequately consider that large investments in Class A shares of mutual funds entitle customers to breakpoint discounts on sales charges, generally beginning at the $50,000 investment level, which are not available for investments in Class B and Class C shares. In fact, customers may be entitled to breakpoints based upon a single mutual fund purchase, multiple purchases in the same “family of funds,” and/or mutual fund investments held, at the time of the new purchase, by members of the customer’s “household.” as that term is defined in the prospectus of the fund in which the shares are being purchased. Unlike Class A shares, Class B shares are also subject to contingent deferred sales charges (“CDSCs”) for a period of time, generally six years, as well as higher ongoing Rule 12b-l fees for as long as the Class B shares aTe held. The CDSCs and the higher ongoing Rule 12 b-l fees significantly affect the return on customers’ mutual fund investments.
In addition, LPL’s supervisory and compliance policies and procedures during the review period were not reasonably established, maintained and/or enforced so that the firm, at the point of each sale, provided adequate disclosure of, or consideration to, on a consistent basis, the benefits of the various mutual fund share classes as they applied to certain individual customers.
As a result of the foregoing, LPL violated NASD Conduct Rules 2110,2310, and 3010.
Fined $75,000 for Alleged Supervisory Failures In Overseeing Representatives’ Wire Transfers (AWC No. E012002060302)
Overview from FINRA’s Disciplinary Office:
NASD Rules 2110, 3010(A), 3010(B) – Respondent member failed to establish, maintain and enforce a reasonable system or written procedures to supervise the activities of registered persons in connection with their use of wire transfers.
Fined $3,602,398 for Alleged Bias In Selling Mutual Fund Shares Based On Brokerage Fees (AWC No. CE4050009)
Overview from FINRA’s Disciplinary Office:
This matter involves violations of NASD Rule 2830(k), which prohibits member firms from favoring or disfavoring the sale or distribution of mutual fund shares on the basis of brokerage commissions received by the firm, prohibits member firms from arranging for a specific amount or percentage of brokerage commissions to be directed to the firm conditioned on the firm’s sale of mutual fund shares, and prohibits member firms from recommending the purchase of mutual fund shares on the basis of brokerage commissions received or expected to be received by the firm from any source.
From January 2001 through December 2003, LPL maintained shelf space (or revenue sharing) programs in which participating mutual fund complexes paid a fee in return for preferential treatment, which included enhanced access to the firm’s sales force, participation in firm meetings and placement of promotional material on the firm’s internal website. One fund complex paid all, and some paid part of their fees for participating in the programs by directing over $14,4 million in brokerage commissions to LPL. Those commission payments violated NASD Conduct Rules 2830(k) and 2110.
Fined $250,000 for Alleged Supervisory Failures In Overseeing a Branch and Improper Use of Electronic Signatures (Docket/Case Number: E-2022-0055)
Overview from FINRA’s Disciplinary Office:
Improper use of electronic signatures and failure to exercise appropriate supervision of an LPL branch office.
Fined $190,000 for Alleged Supervisory Failures In Registering Its Representatives (Docket/Case Number: 230028)
Overview from FINRA’s Disciplinary Office:
From January 2018 until June 2023, LPL Financial, LLC failed to register at least one of its representatives as an investment adviser representative in Pennsylvania in violation of Section 301(c.1)(1)(II) of the PA Securities Act of 1972.
Fined $350,000 for Alleged Supervisory Failures In Overseeing Two Former Agents Who Misappropriated Approximately $1.1 Million From Clients (Docket/Case Number: CO-21-201911026-S)
Overview from FINRA’s Disciplinary Office:
The consent order alleged that the firm violated Section 36B-31-6F of the regulations under the Connecticut Uniform Securities Act by failing to enforce its supervisory procedures with regard to two former agents of the firm, Connecticut residents James Thomas Booth (CRD number 1906145) and Matthew O. Clason (CRD number 4692266). Booth allegedly misappropriated approximately $1.1 million from his LPL Financial LLC clients, and pleaded guilty to one count of securities fraud in Federal Court (United States V. James T. Booth, Crim. No. 19-CR-00699-JGK (S.D.N.Y)). On November 17, 2020. Booth was sentenced to a 42-month prison term. Booth’s conduct also involved generating consolidated client account statements with fictitious investments and sending those statements to clients in an effort to deceive clients about the value of their accounts. Booth had been the subject of a June 18, 2020 order issued by the Commissioner revoking Booth’s registration as a broker-dealer agent and investment adviser agent and fining Booth $100,000, a penalty amount that remains unpaid. The revocation was uncontested. The consent order acknowledged that LPL Financial LLC had entered into settlements with those firm clients who were affected by Booth’s scheme, and that the firm had repaid those clients a total of $1,636,347.07. Clason purportedly opened a joint bank account with an LPL Financial, LLC customer without the firm’s knowledge, then transferred approximately $668,000 from the customer’s brokerage account to the joint account. Clason then proceeded to withdraw at least $620,000 from the joint account for his personal use without the customer’s knowledge or consent. On May 12, 2021, in connection with the foregoing conduct, Clason pleaded guilty to one count of wire fraud in Federal Court (United States V. Matthew O. Clason, Crim. No. 3:21-CR-00066 (D.Conn)). Clason is currently scheduled to be sentenced on December 7, 2021. The LPL Financial LLC customer affected by Clason’s conduct has since been fully compensated through a February 25, 2021 settlement involving the firm and other parties. LPL Financial, LLC contributed $500,000 to that settlement.
Fined $750,000 for Alleged Supervisory Failures In Verifying And Responding To Conflicting Information, Resulting In Unauthorized Wire Transfers Initiated By A Representative (Docket/Case Number: 3-20612)
Overview from FINRA’s Disciplinary Office:
The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are instituted pursuant to Section 8A of the Securities Act of 1933 (“Securities Act”), Sections 15(B) and 21C of the Securities Exchange Act of 1934 (“Exchange Act”), and Sections 203(E) and 203(K) of the Investment Advisers Act of 1940 (“Advisers Act”) against LPL Financial LLC (“respondent” or “LPL”).
The Commission finds that these proceedings arise out of respondent’s failure to verify and respond to conflicting information when it opened a customer account and processed wire transfers at the request of Eugenio Garcia Jimenez, Jr. (“Garcia”). As alleged in the commission’s December 1, 2020 complaint against Garcia, he acted as an unregistered investment adviser and misappropriated $7.1 million of taxpayer funds from the Municipio Autonomo de Mayaguez, Puerto Rico (“The City”) over the course of seven months in 2016. The city entrusted Garcia to provide advice and carry out his promise strategy to invest $9 million of city funds such that they had principal protection and 8-10% returns.
After misappropriating $4.1 million of the city’s funds through an account at brokerage firm 1, Garcia approached LPL in April 2016 to open an investment account. During its review before opening the account, LPL failed to comply with its customer identification program procedures and, despite various individual in different departments questioning the account’s beneficial ownership, source of funds, and reason for transfer from the brokerage firm 1, Garcia opened an account controlled by him at LPL in June 2016. LPL subsequently processed wire transfers that Garcia requested. In the less than one month before LPL froze (and later liquidated) the account, Garcia was able to misappropriate an additional $3.1 million of city funds.
Through certain failures, LPL was a cause of Garcia’s violations of Securities Act Sections 17(A)(2) and (3) and Advisers Act Section 206(2), which prohibit fraudulent conduct in the offer or sale of securities and upon any client or prospective investment advisor client. Further, LPL willfully violated Exchange Act Section 17(A) and Rule 17A-8 thereunder, which require broker-dealers to comply with reporting, record keeping and record retention requirements in regulations implemented under the Bank Secrecy Act, including the Customer Identification Program Rule (31 C.F.R.§1023.22, The “Clip Rule”).
Fined $2,000 for Allegedly Establishing Two Unauthorized Restricted Accounts
Overview from FINRA’s Disciplinary Office:
The South Dakota Division of Insurance (“Division”) alleged LPL Financial LLC (“LPL”) established two accounts in restricted status without adequate permission, in violation of SDCL 47-31B-412(D)(9).
Fined $400,000 for Allegedly Obtained Unsecured Promissory Notes From Clients For An Investment Opportunity In Africa Falsely Endorsed By Celebrities (Docket/Case Number: I-2019000029)
Overview from FINRA’s Disciplinary Office:
LPL agent Dain Stokes solicited and obtained unsecured promissory notes from three clients for a fraudulent “celebrity backed” investment opportunity in Africa. Stokes used the money for personal expenses and there was no investment in Africa. LPL failed to reasonably supervise Stokes and could have prevented the fraudulent scheme from taking place at several junctures.
Fined $3,000 for Allegedly Failing To Report Administrative Actions On Time
Overview from FINRA’s Disciplinary Office:
The Ohio Department of Insurance (“Department”) found LPL Financial LLC failed to timely report administrative actions to the Department, in violation of Section 3905.22(A) pursuant to title 39 of the revised code.
Fined $499,000 for Alleged Supervisory Failures In Preventing The Sales of Unregistered Securities In Georgia (Docket/Case Number: ENSC-190782)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), the Georgia Securities Division (Division) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Georgia; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities Registration Requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from a failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities Registration Requirements.
Fined $1,100,000 for Alleged Unregistered Activity And Delayed Reporting Of Disclosure Events (Docket/Case Number: E-2019-0041)
Overview from FINRA’s Disciplinary Office:
Unregistered activity and failure to timely report disclosure events on Forms U4 and U5.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 18-0018)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate task force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), the West Virginia Securities Division (Division) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in West Virginia; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities Registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities Registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 19-016)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate task force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Tennessee Department of Commerce and Insurance (Department) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Tennessee; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with state securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities Registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 19-067)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), the Office of The Attorney General of the State of New York (OAG) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State securities registration requirements; and certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 98196)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), the Iowa Insurance Division (Division) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Iowa; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, nonexempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 18-04)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Wyoming Secretary of State alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Wyoming; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 19-014)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Ohio Division of Securities (Division) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Ohio; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use and subsequent cancellation of certain third-party services utilized for compliance with State securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $450,000 for Alleged Supervisory Failures in following Blue Sky Laws (Docket/Case Number: SEC-2018-00027)
Overview from FINRA’s Disciplinary Office:
Offered and sold unregistered non-exempt securities in Virginia, failed to invest resources to comply with Blue Sky Laws, failed to supervise flow of information as required by State Securities Registration Requirements, failed to reasonably supervise agents, staff & employees to prevent the sale of unregistered non-exempt securities and canceled third party services critical for compliance with Blue Sky Laws, failed to maintain books & records and conduct appropriate & necessary due diligence regarding use of third party services for compliance with Blue Sky Laws.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Nebraska Department of Banking & Finance (Department) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Nebraska; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $450,000 for Allegedly Offering And Selling Unregistered, Non-Exempt Securities (Docket/Case Number: IC19-CAF-01)
Overview from FINRA’s Disciplinary Office:
LPL offered and sold unregistered, non-exempt securities in Texas in violation of Section 7 of the Texas Securities Act. LPL failed to reasonably supervise the flow of information to ensure full and proper compliance with the State Securities Registration Compliance and failed to maintain adequate systems to reasonably supervise agents, staff, and employees to prevent the sale of unregistered, non-exempt securities. LPL acted negligently in canceling certain third-party services critical for compliance with Blue Sky Laws, rules and regulations. LPL failed to conduct appropriate and necessary due diligence regarding the retention, use, and subsequent cancellation of certain third-party services.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 17-170-S)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Alaska Division of Banking and Securities (Division) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities
Overview from FINRA’s Disciplinary Office:
LPL offered and sold unregistered, non-exempt securities in New Jersey. LPL failed to invest sufficient and appropriate resources in personnel, expertise, systems, and operations to adequately comply with Blue Sky Laws, Rules, and Regulations. LPL failed to reasonably supervise the flow of information to ensure full and proper compliance with State Securities Registration Requirements. LPL failed to maintain adequate systems to reasonably supervise agents, staff, and employees to prevent the sale of unregistered, non-exempt securities. LPL failed to supervise agents, staff and employees in the performance of duties with respect to systems operation, process, and checks and balances to ensure compliance with Blue Sky Laws, Rules, and Regulations. LPL canceled certain third-party services critical for compliance with Blue Sky Laws, rules, and regulations. LPL failed to maintain books and records necessary to ensure full and proper compliance with Blue Sky Laws, Rules, and Regulations. LPL failed to conduct appropriate and necessary due diligence regarding the retention, use, and subsequent cancellation of certain third-party services critical for compliance with Blue Sky Laws, Rules, and Regulations.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered Securities (Docket/Case Number: 19E079/2018-6509)
Overview from FINRA’s Disciplinary Office:
Respondent sold unregistered, non-exempt securities in Kansas; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities; canceled certain third-party services critical for compliance with Blue Sky Laws; and failed to maintain certain books and records to ensure full compliance for State Securities Registration Requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: SEC-2018-147)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Office of The Commissioner of Securities and Insurance, Montana State Auditor (CSI) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Montana; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
29Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 17 SEC 053)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The North Carolina Securities Division (Division) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in North Carolina; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing The Sale of Unregistered Securities (Docket/Case Number: 19-15384)
Overview from FINRA’s Disciplinary Office:
LPL failed to establish and maintain reasonable policies and procedures to prevent the sale of unregistered, non-exempt securities to its customers and failed to maintain required and necessary books and records.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 20181123)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Securities Division of The Office of The Attorney General of South Carolina (Division) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in South Carolina; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 18-094)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Oklahoma Department of Securities (Department) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Oklahoma; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 52367)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Minnesota Department of Commerce (Department) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Minnesota; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing The Offering and Selling Unregistered Securities and Maintaining Records (Docket/Case Number: S-18-0034)
Overview from FINRA’s Disciplinary Office:
Offer and sale of unregistered, nonexempt securities; failure to maintain necessary books & records; failure to supervise.
Fined $8,115,290.79 for Alleged Breaches Of Fiduciary Duty And Inadequate Disclosures (Docket/Case Number: 3-19039)
Overview from FINRA’s Disciplinary Office:
IA Release 5136, March 11, 2019: The Securities and Exchange Commission deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be instituted against LPL Financial LLC (“respondent”). On the basis of this order and respondent’s offer, the commission finds that these proceedings arise out of breaches of fiduciary duty and inadequate disclosures by the respondent in connection with its mutual fund share class selection practices and the fees it received. At times during the relevant period, respondent purchased, recommended, or held for advisory clients mutual fund share classes that charged 12B-1 fees instead of lower-cost share classes of the same funds for which the clients were eligible. Respondent received 12B-1 fees in connection with these investments. Respondent failed to disclose in its Form ADV or otherwise the conflicts of interest related to (A) its receipt of 12B-1 fees, and/or (B) its selection of mutual fund share classes that pay such fees. During the relevant period, respondent received 12B-1 fees for advising clients to invest in or hold such mutual fund share classes. As a result of the conduct, respondent willfully violated sections 206(2) and 207 of the Advisers Act.
Fined $499,000 for Allegedly Offered And Sold Unregistered, Non-Exempt Securities (Docket/Case Number: S-18-2474-18-CO01)
Overview from FINRA’s Disciplinary Office:
On March 4, 2019, the Securities Division entered a consent order with LPL Financial LLC (“LPL Financial”). In connection with an investigation conducted by a multi-state task force coordinated among members of the North American Securities Administrators Association, the Securities Division alleged that from 2006 to 2018, LPL Financial offered and sold unregistered, non-exempt securities in violation of RCW 21.20.140; failed to reasonably supervise its agents, staff, and employees to prevent the sale of unregistered, non-exempt securities; and failed to maintain books and records necessary to ensure full and proper compliance with State Securities Laws, Rules, and Regulations in violation of RCW 21.20. 100. LPL Financial has agreed to make customer remediation, perform a comprehensive review of its policies and procedures, and authorize the Securities Division to conduct audits, inspections, or examinations of LPL Financial to ensure compliance with this order. LPL Financial neither admitted nor denied the allegations, but agreed to cease and desist from violations of RCW 21.20.140 and 21.20.100. LPL Financial agreed to pay a fine of $499,000. LPL Financial waived its right to a hearing and to Judicial review of the matter.
Fined $499,000 for Alleged System Wide Problem of Unregistered Securities Sales (Docket/Case Number: INV2018-00022)
Overview from FINRA’s Disciplinary Office:
LPL had a system wide problem of unregistered securities sales from 2006 to 2018 when they discontinued a third party service provider that checked Blue Sky status on certain securities sales. Books and records violation, unregistered securities and failure to supervise. Problem was national in scope effecting all 50 states and districts of us.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 18-SC-002)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Rhode Island Division of Business Regulation Securities Division (Division) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Rhode Island; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $40,000 for Allegedly Inaccurately Classifying Non-Traded Real Estate Investment Trusts and Business Development Companies (Docket/Case Number: 20167652)
Overview from FINRA’s Disciplinary Office:
The Securities Division of the Office of the Attorney General of South Carolina (Division) alleged that during the period approximately January 2012 to March 2016 (relevant period), certain non-traded real estate investment trusts and non-traded business development companies were inaccurately classified as equities on certain client account statements in violation of S.C. Code Ann. Section 35-1-411 (C)(1) and S.C. Code of Regulations Section 13-405(A)(1).
Fined $499,000 for Alleged Supervisory Failures In Preventing The Sale of Unregistered, Non-exempt Securities (Docket/Case Number: SB-CO-10-18)
Overview from FINRA’s Disciplinary Office:
The settlement stems from an investigation led by NASAA State Securities Regulators regarding the failure to establish and maintain reasonable policies and procedures to prevent the sale of unregistered, non-exempt securities by LPL to its customers.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The North Dakota Securities Department (Department) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in North Dakota; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: SEU-2018-014)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Hawaii Department of Commerce and Consumer Affairs (Department) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Hawaii; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 2017-0591)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Maryland Division of Securities (Division) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Maryland; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The U.S. Virgin Islands Division of Banking, Insurance and Financial Regulation (Division) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in the U.S. Virgin Islands; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures in Supervising Agents to Comply With Blue Sky Laws (Docket/Case Number: SD-18-0041)
Overview from FINRA’s Disciplinary Office:
The Division alleged respondent failed to reasonably supervise agents to ensure compliance with Blue Sky Laws and to prevent the sale of unregistered, non-exempt securities, warranting sanctions under section 61-1-6(2)(A)(II)(J) of the Utah Uniform Securities Act.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: S-238691(LX))
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Wisconsin Division of Securities (Division) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Wisconsin; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $40,000 for Allegedly Inaccurately Classifying Non-Traded Real Estate Investment Trusts and Business Development Companies (Docket/Case Number: S-16-006916-OR02)
Overview from FINRA’s Disciplinary Office:
The Arkansas Securities Department (Department) alleged that during the period approximately January 2012 to March 2016 (relevant period), certain non-traded real estate investment trusts and non-traded business development companies were inaccurately classified as equities on certain client account statements in violation of the rules of the Arkansas Securities Commissioner.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: S-21062A-18-0365)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Arizona Corporation Commission (Commission) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Arizona; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 2018-CDS-062)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Colorado Division of Securities (Division) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Colorado; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 2018-7-03)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The State of Idaho, Department of Finance alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Idaho; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities by LPL to Idaho residents, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $40,000 for Allegedly Inaccurately Classifying Non-Traded Real Estate Investment Trusts and Business Development Companies (Docket/Case Number: LS-17-2288)
Overview from FINRA’s Disciplinary Office:
The Mississippi Securities Division (Division) alleged that during the period approximately January 2012 to March 2016 (relevant period), certain non-traded real estate investment trusts and non-traded business development companies were inaccurately classified as equities on certain client account statements in violation of Miss. Code. Ann. Section 75-71-411(C)(1) and Mississippi Securities Act Rules 5.15.
Fined $450,000 for Alleged Supervisory Failures In Reviewing Emails of Agents and Conducting Examinations for Branch Offices in Indiana (Docket/Case Number: 18-0082 CA)
Overview from FINRA’s Disciplinary Office:
The Indiana Securities Division (Division) alleged that during the period of approximately 2013 through September 2017 (relevant period) LPL Financial LLC (LPL) failed to review certain emails of its Indiana agents and failed to conduct annual examinations for certain branch offices located in Indiana in contravention of 710 IAC 4-7-6(D)(1) (2017) and 710 IAC 4-7-6(D)(9) (2017).
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 90555-S)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The State of Florida, Office of Financial Regulation (Office) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Florida; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities by LPL to Florida residents, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 18-032-S)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Vermont Department of Financial Regulation (Department) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Vermont; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities by LPL to Vermont residents, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 1800307)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Illinois Securities Department (Department) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities by LPL, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $35,000 for Allegedly Misclassifying Securities on Clients’ Monthly Statements (Docket/Case Number: CO-2018-0024)
Overview from FINRA’s Disciplinary Office:
Alabama Securities Commission opened an investigation as part of a coordinated inquiry by State regulators from Arkansas, South Carolina, Mississippi and Alabama of LPL Financial LLC to determine whether LPL systematically misclassified securities on clients’ monthly statements. LPL then entered into a consent order with the States, in which it paid and administrative assessment of $25,000 and investigative costs of $10,000.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: CO-18-8453-S)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The State of Connecticut Department of Banking (Department) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Connecticut; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities by LPL to Connecticut residents, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The California Department of Business Oversight (Department) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in California; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities by LPL to California residents, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Overseeing Their Agents and Employees (Docket/Case Number: 180091)
Overview from FINRA’s Disciplinary Office:
Failed to reasonably supervise LPL agents and employees, as determined through an investigation conducted by a Multistate task force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), during the period of approximately October 1, 2006 through May 1, 2018. This resulted in violation of applicable sections of the Pennsylvania Securities Act of 1972.
Fined $499,000 for Alleged Supervisory Failures in Establishing and Maintaining Policies To Prevent Sales of Unregistered and Non-exempt Securities (Docket/Case Number: INV18-104)
Overview from FINRA’s Disciplinary Office:
A coordinated investigation into LPL’s failure to establish and maintain reasonable policies to prevent the sale of unregistered, non-exempt securities by LPL to its customers, including LPL’s retention, use, and subsequent cancellation of certain third-party services integral to LPL’s compliance with State Securities Registration Requirements (“Blue Sky” Laws); and certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to significant compliance issues resulting from such failure during the period of approximately October 1, 2006 through May 1, 2018.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: AP-18-12)
Overview from FINRA’s Disciplinary Office:
Violations of Sections 409.3-301, 409.4-411(C)(1), and 409.4-412(D)(9). In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Missouri Securities Division (Division) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Missouri; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities by LPL to Missouri residents, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: S-17-0078-18-OR-01)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Arkansas Securities Department (Department) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Arkansas; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities by LPL to Arkansas residents, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: LS-17-2768)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Securities Division of the Mississippi Secretary of State’s Office (Division) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Mississippi; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities by LPL to Mississippi residents, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: S-17-0078-18-OR-01)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Arkansas Securities Department (Department) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Arkansas; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities by LPL to Arkansas residents, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 3006)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The South Dakota Division of Insurance (Division) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in South Dakota; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities by LPL to South Dakota residents, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 15-099-0049)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Securities Division of the New Mexico Regulation and Licensing Department (Division) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in New Mexico; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities by LPL to New Mexico residents, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 336330)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The State of Michigan, Department of Licensing & Regulatory Affairs, Corporations, Securities & Commercial Licensing Bureau (Bureau) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Michigan; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities by LPL to Michigan residents, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 18-0027)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Investor Protection Unit (IPU) of the Delaware Department of Justice alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) failed to reasonably supervise and maintain adequate systems to comply with State Securities Registration requirements, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 2018-AH-00040)
Overview from FINRA’s Disciplinary Office:
The Kentucky Department of Financial Institutions opened an investigation as part of a coordinated inquiry by state regulators from multiple jurisdictions of LPL Financial to determine whether LPL made sales transactions for non-registered and/or non-exempt securities during the time period beginning October 1, 2006, through May 1, 2018. At the end of the inquiry it was determined that LPL violated the Kentucky Securities Act related to the sale of unregistered securities, failure to supervise, books and records requirements. LPL then entered into an Admin. Consent Order with the state in which it paid a penalty.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: OFI-2018-04)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Louisiana Office of Financial Institutions (OFI) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Louisiana; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities by LPL to Louisiana residents, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Puerto Rico Office of the Commissioner of Financial Institutions (OCFI) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Puerto Rico; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities by LPL to Puerto Rico residents, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: 18-0069 CO)
Overview from FINRA’s Disciplinary Office:
In connection with an investigation conducted by a Multistate Task Force coordinated among members of the North American Securities Administrators Association Inc. (NASAA), The Indiana Securities Division (Division) alleged that during the period of approximately October 1, 2006 through May 1, 2018 (relevant period), LPL Financial LLC (LPL) sold unregistered, non-exempt securities in Indiana; failed to reasonably supervise and maintain adequate systems to prevent the sale of unregistered, non-exempt securities by LPL to Indiana residents, including with respect to LPL’s retention, use, and subsequent cancellation of certain third-party services utilized for compliance with State Securities registration requirements; certain other deficiencies within LPL’s compliance structure related to LPL’s controls, monitoring and reporting tools, and escalation protocols in relation to LPL’s response to compliance issues resulting from such failure; and LPL’s failure to maintain certain books and records to ensure full and proper compliance for State Securities registration requirements.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: CO-2018-0012)
Overview from FINRA’s Disciplinary Office:
Alabama Securities Commission opened an investigation as part of a coordinated inquiry by state regulators from multiple jurisdictions of LPL Financial to determine whether LPL made sales transactions for non-registered and/or non-exempt securities during the time period beginning October 1, 2006 through May 1, 2018. At the end of the inquiry it was determined that LPL violated the Alabama Securities Act related to the sale of unregistered securities, failure to supervise, books and records requirements. LPL then entered into a consent order with the state in which it paid an administrative assessment and investigative cost.
Fined $499,000 for Alleged Supervisory Failures In Preventing Sales of Unregistered, Non-Exempt Securities (Docket/Case Number: E-2017-0067)
Overview from FINRA’s Disciplinary Office:
Failure to supervise, offer and sale of unregistered and non-exempt securities, and failure to maintain required and necessary books and records.
Fined $200,000 for Allegedly Engaging In Dishonest Of Unethical Practices (Docket/Case Number: SD-18-0013)
Overview from FINRA’s Disciplinary Office:
The Division alleged respondent engaged in dishonest of unethical practices under Section 61-1-6(2)(A)(II)(G) of the Utah Uniform Securities Act (Act) and failed to reasonably supervise under Section 61-1-6(2)(A)
Fined $2,500 for Alleged Supervisory Failures In Overseeing Their Representatives Regarding Non-Traded REITs Sales (Docket/Case Number: 14 SEC 035)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations y by a Multistate task force with the North American Securities Administrators Association Inc. (NASAA), The North Carolina Securities Division (Division) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its North Carolina representatives regarding the sale of non-traded REITs.
Fined $10, 934.13 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: SB-03-18)
Overview from FINRA’s Disciplinary Office:
State Securities Regulators from multiple jurisdictions conducted a coordinated investigation of LPL to determine whether non-traded REITs/sales transactions executed by LPL violated respective State Laws. The District of Columbia Department of Insurance, Securities & Banking Securities Division alleged that LPL Financial, LLC failed to implement an adequate supervisory system and enforce its procedures regarding the sales of non-traded REITs.
Fined $950,000 for Alleged Supervisory Failures in Ensuring Their Clients Followed Guidelines (Docket/Case Number: 2016-502)
Overview from FINRA’s Disciplinary Office:
LPL failed to ensure that its clients investing in AIS satisfied the New Jersey prospectus suitability requirements. LPL failed to ensure that its clients investing in AIS satisfied LPL’s own AI guidelines.
LPL failed to ensure client’s liquid net worth was accurately calculated on all forms. LPL failed to properly document changes to account profile information as reflected on revised AI forms. LPL failed to confirm the accuracy of client’s investment profiles every thirty-six months as required.
Fined $25,000 for Alleged Supervisory Failures Allowing a Representative to Operate a Ponzi Scheme in Secret (Docket/Case Number: 16 ADM 001)
Overview from FINRA’s Disciplinary Office:
The Secretary of State of North Carolina and Securities Administrator, alleged that LPL failed to reasonably supervise Charles Fackrell, one of its registered representatives, who, unbeknownst to LPL, operated a Ponzi scheme in which he encouraged individuals to invest money in fictitious entities. Fackrell generally diverted the funds for personal expenses, although some funds were paid to investors to perpetuate the appearance of returns. After LPL was alerted to Fackrell’s criminal and unapproved activities, it immediately investigated and terminated him.
Fined $28,095.38 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: SEC-2015-00052)
Overview from FINRA’s Disciplinary Office:
State Securities Regulators from multiple jurisdictions conducted a coordinated investigation of LPL to determine whether non-traded REITs sales transactions executed by LPL violated respective State Laws. The Virginia Securities Division alleged that LPL Financial, LLC failed to implement an adequate supervisory system and enforce its procedures to supervise its Virginia reps regarding the sales of non-traded REITs.
Fined $11,939.46 for Allegedly Selling Shares of Non-Traded REITS (Docket/Case Number: 16-12553)
Overview from FINRA’s Disciplinary Office:
An investigation determined that LPL sold shares of non-traded REITs to Maine investors that were in violation of the prospectus standards of the specific REIT, were in violation of LPL’s own guidelines for the sale of alternative investments, or were inconsistent with LPL’s policies and procedures.
Fined $11,074.81 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: 16-038-S)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the Vermont Securities Division (Division) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its Vermont representatives regarding the sale of non-traded REITs.
Fined $1,000,000 for Alleged Supervisory Failures In Overseeing Advisors In Credit Union Premises (Docket/Case Number: R-2016-0095)
Overview from FINRA’s Disciplinary Office:
The Massachusetts Securities Division alleged that LPL Financial failed to supervise financial advisors located on Credit Union premises, including the supervision of certain compensation and certain aspects of disclosures related to its business conducted on the Credit Union premises.
Fined $11,397.81 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: SEC 2013-59)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the Montana Securities Department (Department) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its Montana representatives regarding the sale of non-traded REITs.
Fined $975,000 for Alleged Supervisory Failures Allowing A Representative to Fabricate Suitability Profiles of Clients (Docket/Case Number: E-2016-0039)
Overview from FINRA’s Disciplinary Office:
The Enforcement Section alleges that LPL Advisor, Roger S. Zullo, fabricated the suitability profiles of numerous LPL clients, selling them scores of large, illiquid, unsuitable, high commission variable annuities, at substantial upfront profits to himself and LPL, in violation of Sections 101, 102, and 204(A)(2)(G) of the Act. The Enforcement Section further alleges that LPL failed in its responsibility to supervise Roger S. Zullo, in violation of Section 204(A)(2)(J).
Fined $19,825.37 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: SEU-2015-044)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multistate task force with the North American Securities Administrators Association Inc. (NASAA), the Hawaii Department of Commerce and Consumer Affairs (Department) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its Hawaii representatives regarding the sale of non-traded REITs.
Fined $64.363.95 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: OFI-2016-003)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the Louisiana office of Financial Institutions (Office) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its Louisiana representatives regarding the sale of non-traded REITs.
Fined $28,172.31 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: 2015-0464)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the Maryland Securities Division (Division) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its Maryland representatives regarding the sale of non-traded REITs.
Fined $12,344.55 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: 15-03)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the Wyoming Secretary of State Compliance Division (Division) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its Wyoming representatives regarding the sale of non-traded REITs.
Fined $21,245.14 for Alleged Supervisory Failures In Complying With Applicable Securities Laws Connected With Non-Traded REITs (Docket/Case Number: 16-017)
Overview from FINRA’s Disciplinary Office:
The Enforcement Division alleged that LPL Financial LLC failed to implement an adequate supervisory system that was reasonably designed to achieve compliance with applicable Securities Laws in connection with non-traded REITs. The Enforcement Division also alleged that LPL Financial LLC also failed to enforce its written procedures to supervise the activities of its registered representatives.
Fined $100,000 for Alleged Supervisory Failures In Reviewing Agents’ Communications and Allowing Agent to Borrow Money From Clients (Docket/Case Number: E-2015-0112)
Overview from FINRA’s Disciplinary Office:
The Enforcement Section alleged that LPL Financial LLC failed to supervise its agents when it failed to review those agents’ misleading communications with the public in connection with the purchase and sale of an agents’ book of business.
The Enforcement Section also alleged that LPL Financial LLC failed to supervise its agent when such agent borrowed money from a client and lost that money in speculative trading for his own account.
Fined $24,642.20 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sale of Non-Traded REITs (Docket/Case Number: S-15-0126)
Overview from FINRA’s Disciplinary Office:
Director of the Oregon Department of Consumer and Business Services alleged that LPL Financial, LLC (LPL) failed to implement an adequate supervisory system and failed to enforce its procedures to supervise its Oregon salespersons regarding the sale of non-traded REITs.
Fined $80,000 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: 15037)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the South Carolina Securities Commission (Securities Commission) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its South Carolina representatives regarding the sale of non-traded REITs.
Fined $19,347.74 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: S-15-0038)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Administrators Association, Inc. (NASAA), the Arkansas Securities Commissioner alleged that LPL Financial, LLC (LPL) failed to implement an supervisory system and enforce its procedures to supervise its Arkansas representatives regarding the sale of non-traded REITs.
Fined $32,522.13 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: 16-008)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the Ohio Division of Securities (Division) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its Ohio representatives regarding the sale of non-traded REITs.
Fined $33,714.11 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: 15002)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the Tennessee Securities Division (Division) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its Tennessee representatives regarding the sale of non-traded REITs.
Fined $25,928.70 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: S-233431(LX))
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the Wisconsin Division of Securities (Division) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its Wisconsin representatives regarding the sale of non-traded REITs.
Fined $10,013.22 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: 6)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the U.S. Virgin Islands Division of Banking and Insurance (Division) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its U.S. Virgin Islands representatives regarding the sale of non-traded REITs.
Fined $2,000 for Alleged Misrepresentation of Benefits and Suitability By a Non-Resident Insurance Producer (Docket/Case Number: 15-0242)
Overview from FINRA’s Disciplinary Office:
LPL consented to the entry of a consent order with the Insurance Commissioner of the State of Washington, after its investigation into the conduct of a non-resident insurance producer after receiving a complaint from an insured alleging that he misrepresented the benefits and suitability of an annuity. More than one of the insurance producers’ violations were known or should have been known by one or more individuals acting on behalf of LPL, and LPL neither reported the violations nor took corrective action. The insurance commissioner levied a fine in the amount of $2,000.00.
Fined $22,841.84 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: 2016-AH-0010)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the Kentucky Department of Financial Institutions (Department) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its Kentucky representatives regarding the sale of non-traded REITs.
Fined $18,267.52 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: CO-2016-0002)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the Alabama Securities Commission (Commission) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its Alabama representatives regarding the sale of non-traded REITs.
Fined $11,012.50 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the North Dakota Securities Department (Department) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its North Dakota representatives regarding the sale of non-traded REITs.
Fined $95,000 for Alleged Supervisory Failures In Conducting Financial Statement Reviews (Docket/Case Number: IC16-CAF-02)
Overview from FINRA’s Disciplinary Office:
LPL failed to enforce their own supervisory procedures with respect of financial statement reviews, and therefore violated 115.10(B)(1) of the Texas State Securities Board Rules (“Rules”). LPL received a tip that an agent received a loan from a client for one million ($1,000,000). LPL did not conduct a review of the loan, in which the agent provided the name of the source of the loan; however, LPL failed to identify that the source was in fact a client of an agent. Eighteen months later again the same agent again received another loan from the same client. LPL opened another review and this time was able to identify that the loan was from a client. LPL terminated said agent.
LPL termination of the agent is in response to frim procedures; however, termination of agent should have occurred eighteen months earlier.
Fined $16,182.86 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: 16E002/2016-6358)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association, Inc. (NASAA), the office of the Kansas Securities Commissioner alleged that LPL Financial, LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its Kansas representatives regarding the sale of non-traded REITs.
Fined $65,766.07 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: S-15-1795-15-C001)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the Washington Department of Financial Institutions Securities Division (Division) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its Washington representatives regarding the sale of non-traded REITs.
Fined $140,220.11 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the California Department of Business Oversight (Department) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its California representatives regarding the sale of non-traded REITs.
Fined $40,183.94 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: 2016-L-09)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the Colorado Division of Securities (Division) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its Colorado representatives regarding the sale of non-traded REITs.
Fined $50,555.39 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: 62466-S)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the State of Florida Office of Financial Regulation (Office) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its Florida representatives regarding the sale of non-traded REITs.
Fined $16,638.57 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: 88827)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the Iowa Insurance Division (Division) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its Iowa representatives regarding the sale of non-traded REITs.
Fined $38,133.80 for Alleged Supervisory Failures In Enforcing Written Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: 327800)
Overview from FINRA’s Disciplinary Office:
At all times relevant, and pursuant to Michigan Law, LPL was required to implement an adequate supervisory system regarding the sale of non-traded REITs pursuant to Section 412(4)(I) of the Securities Act, MCL 451.2412(4)(I), and LPL was required to enforce its written procedures regarding the sale of non-traded REITs.
Based upon the above facts, from and including January 1, 2008 through December 31, 2013, LPL failed to implement an adequate supervisory system pursuant to MCL 451.2412(4)(I), regarding its sale, through Michigan representatives, of non-traded REITs.
From and including January 1, 2008, through December 31, 2013, LPL failed to enforce its written procedures to supervise the activities of its registered representatives in violation of MCL 451.2412(4)(I).
As a result, this consent order and the following relief is appropriate and in the public interest.
Fined $41,209.74 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: 39265)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the Minnesota Department of Commerce (Department) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its Minnesota representatives regarding the sale of non-traded REITs.
Fined $16,736.07 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the Nebraska Department of Banking & Finance (Department) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its Nebraska representatives regarding the sale of non-traded REITs.
Fined $28,021.63 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: ENSC-160589)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (NASAA), the Georgia Securities Division (Division) alleged that LPL Financial LLC (LPL) failed to implement an adequate supervisory system and enforce its procedures to supervise its Georgia representatives regarding the sale of non-traded REITs.
Fined $17,738.18 for Allegedly Offering Multiple Non-Traded REITs (Docket/Case Number: 2015-7-10)
Overview from FINRA’s Disciplinary Office:
During the time period from and including January 1, 2008 through December 31, 2013, LPL Financial (“The firm”) offered multiple non-traded REITs through its branch offices in Idaho and into Idaho from LPL branches located outside the State of Idaho that exceeded the firm’s alternative investment guidelines.
Fined $19,253.45 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: LS-15-1497)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (“NASAA”), the Mississippi Securities Division (the “Division”) alleged that LPL Financial LLC (“LPL”) failed to implement an adequate supervisory system and enforce its procedures to supervise its Mississippi representatives regarding the sale of non-traded REITs.
Fined $10,125.11 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (“NASAA”), the Office of the Commissioner of Financial Institutions of the Commonwealth of Puerto Rico (The “OCFI”) alleged that LPL Financial LLC (“LPL”) failed to implement an adequate supervisory system and enforce its procedures to supervise its Puerto Rico representatives regarding the sale of non-traded REITs.
Fined $11,528.48 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: 15-09-0049)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (“NASAA”), the New Mexico Securities Division (The “Division”) alleged that LPL Financial LLC (“LPL”) failed to implement an adequate supervisory system and enforce its procedures to supervise its New Mexico representatives regarding the sale of non-traded REITs.
Fined $12,500.70 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: 2816)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (“NASAA”), the South Dakota Division of Securities (The “Division”) alleged that LPL Financial LLC (“LPL”) failed to implement an adequate supervisory system and enforce its procedures to supervise its South Dakota representatives regarding the sale of non-traded REITs.
Fined $19,041.63 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: 15-0022 CA)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (“NASAA”), the Indiana Securities Division (The “Division”) alleged that LPL Financial LLC (“LPL”) failed to implement an adequate supervisory system and enforce its procedures to supervise its Indiana representatives regarding the sale of non-traded REITs.
Fined $110,855.07 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: IC15-CDO-04)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (“NASAA”), the Texas State Securities Board (The “Board”) alleged that LPL Financial LLC (“LPL”) failed to implement an adequate supervisory system and enforce its procedures to supervise its Texas representatives regarding the sale of non-traded REITs.
Fined $10,570.45 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: 15-1804-S)
Overview from FINRA’s Disciplinary Office:
In connection with coordinated investigations by a Multi-state task force with the North American Securities Administrators Association Inc. (“NASAA”), the Alaska Division of Banking and of Securities (The “Division”) alleged that LPL Financial LLC (“LPL”) failed to implement an adequate supervisory system and enforce its procedures to supervise its Alaska representatives regarding the sale of non-traded REITs.
Fined $38,522.75 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: AP-15-42)
Overview from FINRA’s Disciplinary Office:
LPL failed to implement an adequate supervisory system regarding the sale of non-traded REITs; and LPL failed to enforce its written procedures to supervise activities of its registered representatives.
Fined $18,293.16 for Alleged Supervisory Failures In Enforcing Procedures Regarding Sales of Non-Traded REITs (Docket/Case Number: SD-15-0064)
Overview from FINRA’s Disciplinary Office:
The Division alleged respondent failed to reasonably supervise under section 61-1-6(2)(A)(II)(J) of the Utah Uniform Securities Act.
Fined $26,110.92 for Alleged Supervisory Failures In Complying With The PA Securities Act of 1972 (Docket/Case Number: 2013-10-01 (#150046))
Overview from FINRA’s Disciplinary Office:
LPL Financial LLC failed to implement an adequate supervisory system that was reasonably designed to achieve compliance with the PA Securities Act of 1972 and failed to enforce its written procedures to supervise the activities of its agents and employees.
Fined $2,000 for Alleged Supervisory Failures In Timely Reporting a Regulatory Action
Overview from FINRA’s Disciplinary Office:
LPL consented to the allegations that it violated Ohio Statute 3905.22 by failing to timely report a regulatory action taken by the State of New Hampshire dated April 6, 2015.
Fined $1,800,000 for Allegedly Selling Leveraged ETFs To Retail Clients Without Tracking How Long The Clients Held Them (Docket/Case Number: 15-2854E)
Overview from FINRA’s Disciplinary Office:
Without admitting or denying the findings of fact and conclusions of law, LPL entered into an assurance of discontinuance with the Commonwealth of Massachusetts, after an investigation into LPL’s use of leveraged and inverse leveraged exchange-traded funds (ETFs). LPL offered leveraged ETFs to certain retail clients in Massachusetts without monitoring or systematically reviewing the length of time its clients held leveraged ETFs. LPL provided insufficient training materials that, in parts, suggested that leveraged ETFs were appropriate for conservative accounts, and in some instances recommended buying and holding, without reminding financial advisors of the specific risks associated with holding leveraged ETFs. LPL failed to identify and examine potential issues concerning the suitability of leveraged ETF exposure for those of LPL’s financial advisors who caused clients to hold leveraged ETFs for extended periods of time. Moreover, LPL did not consistently adhere to its policy of imposing fines on LPL financial advisors who exceeded this concentration limit, sometimes issuing multiple warnings unaccompanied by any sanctions.
Fined $56,202.19 Selling Non-Traded REITs Exceeding Prospectus Standards, State Limits, And Investment Guidelines (Docket/Case Number: I14-083)
Overview from FINRA’s Disciplinary Office:
Without admitting or denying the findings of fact and conclusions of law, LPL entered into a consent order with the Office of The Secretary of State Securities Division after a multiple-jurisdiction investigation into LPL’s sale transactions of non-traded REITs, a form of alternative investments. During the time period beginning January 1, 2008 through December 31, 2013, LPL offered multiple non-traded REITS through its branch offices in Nevada that were sold in excess of the REIT’s prospectus standards, various state concentrations limits, or its own alternative investment guidelines. LPL failed to implement an adequate supervisory system that was reasonably designed to achieve compliance with NAC 90.321. LPL also failed to enforce its written procedures to supervise the activities of its registered representatives in Violation of NAC 90.321.
Fined $200,000 for Allegedly Selling Risky Leveraged Etfs To Retail Clients Without Proper Disclosure (Docket/Case Number: 13-5-1)
Overview from FINRA’s Disciplinary Office:
Without admitting or denying the conclusions of law, LPL entered into a consent order with the Delaware investor protection unit after their investigation into LPL’s use of leveraged and inverse leveraged exchange-traded funds (ETFs). LPL offered leveraged ETFs to certain retail clients in Delaware that were unsuitable, and/or without adequate disclosure of the specialized risks of leveraged ETFs, which constitutes a dishonest or unethical practice. LPL failed to ensure that its financial advisors understood and explained the unique risks, failed to enforce its warning and fine system with regard to its leveraged ETFs concentration limits, and failed to adequately monitor and ensure the monitoring of client holding periods, all of which constitute a failure to supervise.
Fined $10,000 for Alleged Supervisory Failures Allowing An Unregistered Representative To Engage In Investment Advisory Business (Docket/Case Number: 51792-S)
Overview from FINRA’s Disciplinary Office:
LPL consented to the sanctions and the entry of the findings that from September 2009 to September 2013, LPL allowed one of its registered representatives to engage in investment advisory business from an office in the State of Florida without being lawfully registered in Florida.
Fined $250,000 for Alleged Supervisory Failures In Reviewing Senior-Specific Titles (Docket/Case Number: 2015-0033)
Overview from FINRA’s Disciplinary Office:
LPL consented to the findings that it did not establish, maintain, or enforce adequate procedures to review senior-specific titles for compliance with the Commonwealth’s senior designations regulations adopted June 1, 2007. As a result, LPL allowed its broker-dealer agents and investment adviser representatives to use prohibited senior-specific designations.
Fined $ for Alleged Supervisory Failures In Overseeing Activities Regarding Non-Traded REITs (Docket/Case Number: C-2013000005)
Overview from FINRA’s Disciplinary Office:
LPL failed to establish and maintain a system to reasonably supervise the activities of its NH agents with respect to the sale of non-traded REITs to NH residents; LPL failed to enforce its WSPS with respect to the sale of non-traded REITs to NH residents; LPL failed to reasonably supervise its NH agents with respect to the sale of non-traded REITs to NH residents.
Fined for Alleged Supervisory Failures In Reporting Administrative Actions
Overview from FINRA’s Disciplinary Office:
On or about September 4, 2014, LPL entered into a consent agreement with the Ohio Department of Insurance regarding the reporting of various administrative actions on its license. Pursuant to the agreement, LPL was required to pay a civil penalty and administrative costs. LPL failed to comply with the order in paying the civil penalty and administrative costs.
139Fined $500,000 for Alleged Supervisory Failures In Detecting Improper and Fraudulent Conduct (Docket/Case Number: 1200385)
Overview from FINRA’s Disciplinary Office:
LPL Financial failed to detect improper and fraudulent conduct on the part of David Lisnek toward his LPL clients. LPL Financial allowed Mr. Lisnek to remain a registered representative while several facts, viewed together as a pattern of conduct, would have constituted multiple cautionary indicators (“red flags”) of the potential for improper conduct.
Fined $800 for Alleged Supervisory Failures In Reporting Administrative Actions On Time
Overview from FINRA’s Disciplinary Office:
From approximately December 2010 through December 12, 2012, LPL Financial was subject to various FINRA actions and other administrative actions on its professional licenses in the States of Illinois, Kentucky, Missouri, and Texas. LPL Financial reported its administrative actions to the Ohio department of insurance. However, they weren’t reported to the department within the required thirty-day period.
Fined $2,000,000 for Alleged Supervisory Failures In Maintaining Books and Records Regarding Variable Annuity Exchange (Docket/Case Number: 1200385)
Overview from FINRA’s Disciplinary Office:
From at least 2009 to 2013, LPL Financial failed to adequately maintain certain books and records documenting its variable annuity exchange business and failed to enforce its supervisory system and procedures in connection with the documentation of certain salespersons’ variable annuity exchange activities. LPL Financial’s conduct constitutes cause to impose sanctions pursuant to Sections 8.E.1(E) and (Q) of the Illinois Securities Law of 1953, [815 ILCS 5/1 ET Seq.,] (The “Act”) and violates Section 12.A of the Act.
Fined $175,000 for Alleged Supervisory Failures Allowing an Agent to Engage in Dishonest Practices (Docket/Case Number: AP-13-21)
Overview from FINRA’s Disciplinary Office:
The enforcement Section of the Missouri Securities Division of the Office of the Secretary of State has alleged that LPL Financial LLC failed to reasonably supervise Greg John Campbell, a Missouri-registered agent who engaged in dishonest or unethical practices, in violation of section 409.4-412(D)(9), RSMO. (Cum. Supp. 2012).
Fined $10,000 for Alleged Supervisory Failures in Overseeing Registered Representative (Docket/Case Number: SEC-2012-144)
Overview from FINRA’s Disciplinary Office:
The commissioner alleges that LPL Financial violated Mont. Code Ann. 30-10-201(13)(K) by failing to reasonably supervise a registered representative.
Fined $500,000 for Alleged Supervisory Failures In Overseeing and Training Agents (Docket/Case Number: 2012-0036)
Overview from FINRA’s Disciplinary Office:
LPL violated Massachusetts and prospectus requirements in addition to failure to supervise and train agents in connection with the sale of non-traded REITs.
Fined $250,000 for Alleged Supervisory Failures In Overseeing a Registered Representative (Docket/Case Number: 1000096)
Overview from FINRA’s Disciplinary Office:
Respondent LPL Financial, LLC was subject to sanctions under Sections 8.E(1)(E)(I) and 8.E(1)(E)(IV) of the Illinois Securities Law of 1953 because it failed to reasonably supervise Arthur Lin while he was a registered representative of the company. Without admitting or denying the allegations, respondent LPL Financial, LLC consented to the resolution of this case.
Fined $400,000 for Alleged Supervisory Failures In Overseeing Registered Representatives (Docket/Case Number: 2009-10-06)
Overview from FINRA’s Disciplinary Office:
LPL Financial LLC (respondent) does not admit or deny the allegations of the Pennsylvania securities commission that the respondent failed to properly supervise at least two registered representatives in violation of the provisions of the PA Securities Act of 1972.
Fined $100,000 for Alleged Supervisory Failures In Overseeing Securities Activities (Docket/Case Number: S-07-0001-2)
Overview from FINRA’s Disciplinary Office:
Firm failed to diligently supervise securities activities of OSJ branch manager; firm failed to conduct effective examination of OSJ office on periodic basis to ensure compliance with policies and procedures.
Fined $37,540 for Alleged Supervisory Failures In Overseeing Registered Agent (Docket/Case Number: AP-10-16)
Overview from FINRA’s Disciplinary Office:
The Enforcement Section of the Missouri Securities Division has alleged that respondent LPL Corp. failed to reasonably supervise a Missouri-registered agent.
Fined $167,796.18 for Alleged Supervisory Failures In Overseeing Registered Agent (Docket/Case Number: 0800381)
Overview from FINRA’s Disciplinary Office:
Respondent LPL Financial Corporation was subject to sanctions under Sections 8.E(1)(E))(I) and 8.E(1)(E)(IV) of the Illinois Securities Law of 1953 because it failed to reasonably supervise Stephen Walker while he was a registered representative of the company. Without admitting or denying the allegations, respondent LPL Financial consented to the resolution of this case.
Fined $4,000 for Allegedly Paying Advertising Compensation to an Unqualified Agent (Docket/Case Number: 2010-AH-012)
Overview from FINRA’s Disciplinary Office:
The firm paid advertising compensation to an agent who was not qualified and was not registered as an investment advisor representative.
Fined $150,000 for Alleged Supervisory Failures In Overseeing Representatives Ensuring Compliance (Docket/Case Number: SEC-2009-46)
Overview from FINRA’s Disciplinary Office:
The Montana Securities Department alleged that LPL violated Mont. Code Ann. § 30-10-201(13)(K) by failing to reasonably supervise a registered representative to ensure the registered representatives compliance with the Montana Securities Act.
Fined $5,000 for Alleged Supervisory Failures In Reporting Information Regarding Purchase and Sale Transactions (Docket/Case Number: 2008013716201)
Overview from FINRA’s Disciplinary Office:
MSRB Rule G-14 – LPL Financial Corporation failed to report information regarding purchase and sale transactions effected in Municipal securities to the real-time transaction reporting system (RTRS) in the manner prescribed by rule G-14 RTRS procedures and the RTRS users manual. The firm failed to report information about transactions within 15 minutes of the time of trade to an RTRS portal and failed to report information about transactions involving auction rate products by the end of the RTRS business day on which the transactions were executed.
Fined $10,000 for Alleged Supervisory Failures In Disclosing Material Information Regarding Securities (Docket/Case Number: SEU-2007-73)
Overview from FINRA’s Disciplinary Office:
Failure to disclose to clients material information in connection with the offer, sale, or purchase of securities by omitting to inform clients that the securities products were offered through LPL and were not bank products and therefore not FDIC insured. This activity took place at Central Pacific Investment Services branch office in Kahului, Maui.
Fined $5,000 for Alleged Supervisory Failures In Enforcing Written Procedures Regarding Notification of Felony Charges and Form Updates (Docket/Case Number: IC08-CAF-22)
Overview from FINRA’s Disciplinary Office:
On or about July 25, 1983, LPL Financial Corporation registered with the Securities Commissioner as a dealer. Sometime between February 2005 and December 26, 2005, an agent of LPL Financial Corporation notified the firm of a felony charge that occurred on or about December 18, 2004. On or about March 3, 2006, a Form U-4 disclosing the felony charge was filed with the Securities Commissioner on behalf of its agent. At the time of the felony charge, LPL’s written procedures provided that “LPL Financial advisors and other associated persons must immediately notify their OSJ branch manager and LPL’s legal department if they are ever charged with or convicted of any felony. The Form U4 of registered personnel will be promptly updated to reflect such charges, convictions.” LPL Financial Corporation failed to enforce its written procedures relating to the notification of a felony charge and Form U-4 update.
Fined $275,000 for Alleged Supervisory Failures In Protecting Customer Information (Docket/Case Number: 3-131181)
Overview from FINRA’s Disciplinary Office:
SEC Administrative proceeding release Nos. 58515 and 2775, September 11, 2008: The SEC deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to sections 15(B) and 21C of the Securities Exchange Act of 1934 and Sections 203(E) and 203(K) of the Investment Advisers Act of 1940 against LPL Financial Corporation, formerly known as Linsco/Private Ledger Corp. (“LPL”). In anticipation of the institution of these proceedings, respondent has submitted an offer of settlement (“offer”) which the SEC has determined to accept. These proceedings arise out of the violations by LPL, a registered broker-dealer, investment adviser, and transfer agent, of the Safeguards Rule of Regulation S-P (17 CFR Sec. 248.30(A)) (The “Safeguards Rule”), which requires broker-dealers and sec-registered investment advisers to adopt written policies and procedures reasonably designed to protect customer information. Despite its being aware as early as 2006 that it had insufficient security controls to safeguard customer information at its branch offices, LPL failed to implement adequate controls, including some security measures, which left customer information at LPL’s branch offices vulnerable to unauthorized access. Between mid-July 2007 and February 2008, and February 2008, LPL experienced a series of computer system security breaches in which an unauthorized person(s) accessed and traded, or attempted to trade, in the customer accounts of several of LPL’s registered representatives. As of the date of the “hacking” incidents, LPL had failed to implement increased security measures and adopt policies and procedures reasonably designed to safeguard customer information as required by Regulation S-P. LPL detected the breaches and absorbed the losses in the customer accounts. Nonetheless, LPL’s failures left customer information vulnerable to identity thieves of other unauthorized users at the firm’s branch offices.
Fined $230,000 for Alleged Supervisory Failures In Overseeing Their Agents (Docket/Case Number: 2007-03-01)
Overview from FINRA’s Disciplinary Office:
Linsco/Private Ledger Corp., at certain times between 1998 and 2006, failed to maintain or enforce procedures reasonably designed to supervise one or more of its agents in PA.
Fined $5,000 for Alleged Supervisory Failures In Timely Amending Representatives’ Form U4 (Docket/Case Number: 2005003190804)
Overview from FINRA’s Disciplinary Office:
Article V, Section 2(C) of the NASD By-Laws, NASD Rule 2110 – Linsco/Private Ledger Corp. failed to timely amend representatives’ forms U4 with material information.
Fined $10,000 for Alleged Supervisory Failures In Timely Updating Form BD (Docket/Case Number: IC06-CAF-19)
Overview from FINRA’s Disciplinary Office:
Linsco/Private Ledger Corporations failed to timely update its Form BD to reflect the use of other business names in connection with securities activity by certain of Linsco/Private Ledger Corporation’s branch offices and other business locations in Texas.
Fined $5,000 for Alleged Supervisory Failures In Complying to NASD Requirements (Docket/Case Number: E112004010901)
Overview from FINRA’s Disciplinary Office:
NASD Rules 2711(F)(%) and 2110 – respondent member failed to comply with NASD Rule 2711(F)(5) when terminating research coverage of subject companies in that, it failed to make available a final research report; notice of suspension of coverage did not comply with the requirements of NASD Conduct Rule 2711(F)(5).
Fined $450,000 for Alleged Supervisory Failures In Complying With Reporting Obligations (Docket/Case Number: CAF040093)
Overview from FINRA’s Disciplinary Office:
Article V, Sections 2(C) and 3(B) of NASD’s By-Laws, and NASD Rules 2110 and 3010 – Linsco/Private Ledger Corp. (“Respondent Firm”) filed at least 390 late amendments to Forms U4 and U5, which represented approximately 71% of the required amendments relating to reportable customer complaints, terminations, regulatory actions, and criminal disclosures. During the relevant period, the respondent firm’s supervisory system and procedures were not reasonably designed to achieve compliance with its Article V reporting obligations.
Fined $5,000 for Alleged Supervisory Failures In Ensuring That Transaction Prices Were Fair (Docket/Case Number: C05040072)
Overview from FINRA’s Disciplinary Office:
MSRB Rules G-17 and G-30(A) – public customers requested that Linsco/Private Ledger Corp. liquidate two different municipal security positions Linsco/Private Ledger Corp. contracted a broker’s broker and obtained bids for the customers’ securities. Based on the bids provided by the broker’s broker, the firm purchased the securities from the customers for its own account and then sold the securities to the broker’s broker at a nominal gain. In both instances, the prices paid to the customers, and received by the firm, were below the fair market value of each security, in amounts ranging from 17.81% to 20.01%. By relying solely on the bids provided by the broker’s broker to determine the fair market value of the security, Linsco/Private Ledger Corp. failed to ensure that the transactions were executed at aggregate prices that were fair and reasonable.
Fined $1,116,402.50 for Allegedly Violating The Securities Act Of 1933 And The Exchange Act Of 1934 (Docket/Case Number: 3-11401)
Overview from FINRA’s Disciplinary Office:
SEC Administrative Proceeding Release Nos. 33-8371 and 34-49232, dated February 12, 2004: The Securities and Exchange Commission (“Commission” or “SEC”) deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities Act of 1933 (“Securities Act”) and Sections 15(B)(4) and 21C of the Securities Exchange Act of 1934 (“Exchange Act”) against Linsco/Private Ledger Corp. (“respondent”).
Fined $1,116,402.50 for Allegedly Selling Shares Without Reduction In The Front-End Loads (Docket/Case Number: CAF040005)
Overview from FINRA’s Disciplinary Office:
NASD Conduct Rule 2110 – Respondent member sold shares issued by mutual funds without providing certain customers with the reduction in the front-end loads, or sales charges described in the prospectuses of the funds; failed to give its customers breakpoint discounts in 35.64% of eligible mutual fund transactions in 2001 and 2002, that resulted in missed breakpoints that would have reduced customers charges by at least $2,232,805 on their purchases of mutual fund shares with front-end loads during the relevant period.
Fined $5,000 for Alleged Supervisory Failures In Reporting Transactions to FIPS On Time (Docket/Case Number: CMS030072)
Overview from FINRA’s Disciplinary Office:
NASD Conduct Rule 2110 and Marketplace Rule 6240(A)(2)- respondent member Linsco/Private Ledger Corp. failed to report to fixed income pricing system (“FIPS”) transactions in FIPS Securities within five minutes after execution. These late transactions constituted approximately 96 percent of all transactions in FIPS Securities that the firm was obligated to report to FIPS during the review period.
Fined $5,000 for Alleged Supervisory Failures In Complying to Rules Regarding Communications Via Electronic Media (Docket/Case Number: CMS030029)
Overview from FINRA’s Disciplinary Office:
NASD Conduct Rules 2110 and 3010 – respondent member’s supervisory system did not provide for supervision reasonably designed to achieve compliance with respect to the applicable Securities Laws and Regulations concerning communications with the public via electronic media.
Fined for Allegedly Offering and Selling Securities Which Were Unregistered or Exempt From Registration (Docket/Case Number: 50-86-9529(A))
Overview from FINRA’s Disciplinary Office:
The State of Georgia cited PLFS for violation of O.C.G.A. 10-5-12-(A)(1) of the Act, alleging that PLFS offered for sale and sold securities which were not effectively registered or exempt from registration.
Fined for Alleged Supervisory Failures In Overseeing An Agent (Docket/Case Number: 95-2984/97E179)
Overview from FINRA’s Disciplinary Office:
A notice of intent to invoke administrative sanctions was filed on May 28, 1997. The action was in regard to respondent’s alleged failure to adequately supervise Mark Sigurdson. Pursuant to a consent order, respondent agreed to offer partial restitution to four customers in the amount of $39,644.
Fined $19,304.94 for Allegedly Violating The Pennsylvania Securities Act (Docket/Case Number: 9501-04LC)
Overview from FINRA’s Disciplinary Office:
Violations of Section 305(a)(vii) & (ix) of the Pennsylvania Securities Act.
Fined $11,163 for Allegedly Offering and Selling Securities Which Were Unregistered or Exempt From Registration (Docket/Case Number: 82-66-S)
Overview from FINRA’s Disciplinary Office:
Bureau alleged that two agents of Private Ledger Financial Services (PLFS) offered for sale and sold securities that were not effectively registered or exempt from registration.
Fined $500 for Alleged Supervisory Failures In Overseeing A Branch Office’s Use Of Stationery, Business Cards, And Failing to Display PLFS’s Name On The Front Door And In Phone Book Listings (Docket/Case Number: CA-793)
Overview from FINRA’s Disciplinary Office:
NASD alleged that Private Ledger Financial Services (PLFS) failed to supervise a branch office with respect to the use of stationary and business cards and for the failure to use PLFS’s name on the front door of the branch office and in a phone book listing.
Next Steps and Free Consultation with Our Legal Team
If you have questions about LPL Financial, its advisors, or the management or performance of your accounts, please contact our team at Patil Law toll-free at 1-800-950-6553 for a free initial consultation. Or please reach out to us through our secure and private contact form and we will call you back quickly to discuss your case.
Our attorneys have experience handling well over a thousand securities arbitration claims, and our law firm has successfully recovered over $25 million for our clients to date. We understand the stress that comes along with realizing that your financial advisor or brokerage firm has made poor decisions with your money.
We can help you, as we have helped hundreds of other clients in the past. We are happy to serve you as well as to provide you with a custom report of your advisor’s and your brokerage firm’s complaints.