FINRA has ordered LPL Financial to pay $10 million in fines and $1.7 million in restitution for “widespread supervisory failures” related to certain ETF, variable annuity, mutual fund and non-traded REIT transactions and $1.7 million in restitution related to non-traditional ETF transactions. FINRA found that LPL lacked a system to monitor the length of time customers held nontraditional ETFs in their accounts and failed to enforce limits on the concentration of the ETFs in customer accounts. FINRA also found that LPL failed to monitor and report trades and deliver more than 14 million trade confirmations to customers. LPL also failed to generate proper anti-money laundering alerts, and to supervise advertising and other communications, including brokers’ use of consolidated reports, according to FINRA.
Related: LPL Financial Complaints
“LPL’s supervisory breakdowns resulted from a sustained failure to devote sufficient resources to compliance programs integral to numerous aspects of its business,” said Brad Bennet, FINRA’s chief of enforcement, in a statement reported by Investment News. “With today’s action, FINRA reaffirms that there is little room in the industry for lax supervision and that it will not hesitate to order firms to review and correct substandard supervisory systems and controls, and pay restitution to affected customers.”
In entering into the settlement, LPL neither admitted nor denied FINRA’s findings. In a statement, LPL said that the fines resolved “a series of regulatory issues we have already remedied, or are in the midst of working to remedy, as part of the settlement and our ongoing commitment to enhance our business controls,” according to The New York Times.
If you are a client of LPL and have experienced investment losses or other financial irregularities, please call us at 844-689-5754 or complete our “contact form.” Sonn Law Group is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies.