LPL Financial to pay $3.7 Million

Investment Losses with LPL Financial and Roger Zullo

LPL Financial was ordered Monday to pay up to $3.7 million in restitution and fines to investors as a result of an investigation into sales of unsuitable variable annuities by a former top-producing adviser based in Boston, according to the complaint.

As we told you last month, William Galvin, Massachusetts regulator, charged LPL with a failure to supervise Roger Zullo, a top-producing broker who allegedly committed fraud in selling unsuitable variable annuities to retirees.

According to FINRA, Zullo has been registered with LPL since 2004 and has been working in the securities industry since 1988. He has no disclosure events listed on his Broker Check profile.

Zullo’s supervisor allegedly reported to his LPL managers concerns about Zullo’s practice of switching his clients out of variable annuities every six to seven years, right before the surrender period had expired and replacing them with a similar product.

The order requires LPL to pay close to $2.5 million in restitution to retirees and other older investors, many of whom worked in the health care field. The order also fines LPL $975,000 and requires disgorgement of $208,000 in commissions.

LPL has allegedly been dealing with numerous compliance issues the past several years. In 2014 and 2015, LPL paid more than $70 million in regulatory fines and restitution to clients.

Brokerage firms are required to properly supervise all advisors they employ and to ensure that those advisors are complying with applicable FINRA rules and regulations. If it can be demonstrated that Zullo’s former employer failed to properly supervise him, his employer may be held responsible for the losses in a FINRA arbitration claim.

Free Consultation

If you suffered losses investing with Roger S. Zullo or LPL Financial and would like a free consultation to discuss your litigation options, please call The White Law Group at 1-888-637-5510.

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.