FINRA Sanctions LPL Financial for Supervisory Issues
According to the Financial Industry Regulatory Authority on February 6, 2018, LPL Financial LLC (CRD #6413, Boston, Massachusetts) was issued an AWC in which the firm was censured and fined $375,000.
Without admitting or denying the findings, LPL Financial consented to the sanctions and to the entry of findings that it failed to implement a supervisory system reasonably designed to ensure that its registered representatives were trained on all material risks and features of brokered certificates of deposit (CDs) and that it adequately disclosed all material risks and features of the brokered CDs to customers.
According to FINRA’s findings, the firm allegedly failed to take reasonable steps to ensure that its registered representatives or fixed income desk employees received or had meaningful access to issuer-prepared disclosure documents prior to their sales of these products.
The firm reportedly did not consistently provide its customers, prior to or at the time of sale, with issuer-prepared disclosure documents, despite the firm’s obligation to do so under its selling agreements with the brokered CD issuers. Additionally, the firm didn’t have a process to disclose fully all material risks and features of the brokered CDs to customers.
Because of the firm’s deficient supervisory system, one of the firm’s registered representatives made material misrepresentations to elderly customers regarding the limitations on the ability, upon death, of their estates to redeem their 20-year brokered CDs at par value.
The elderly customers or their estates suffered losses of approximately $75,000 because they were unable to fully redeem the brokered CDs and had to sell the brokered CDs on the secondary market. The firm subsequently remediated these customers’ losses.
For FINRA’s full findings see FINRA Case #2015045703001.
Investigating Potential Claims
The White Law Group is investigating the liability that LPL Financial may have for losses sustained by their clients.
Brokerage firms are required to adequately supervise their agents to ensure they are complying with FINRA rules. If it is determined that the broker dealer failed to supervise their agents, they can be held responsible for losses in a FINRA arbitration claim.
FINRA is dedicated to investor protection and market integrity. It regulates one critical part of the securities industry – brokerage firms doing business with the public in the United States. FINRA administers a dispute resolution forum for investors and brokerage firms and their registered employees.
Are you concerned about your investments with LPL Financial? The attorneys at The White Law Group may be able to help you. For a free consultation with a securities attorney, please call (888) 637-5510.
The foregoing information, which is all publicly available on FINRA’s website, is being provided by The White Law Group. The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.
For more information on The White Law Group, please visit www.whitesecuritieslaw.com
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