FINRA Sanctions LPL Financial $11.7 Million for Supervisory Failures

Brokerage firm LPL Financial’s problems continue as FINRA now has sanctioned the brokerage firm $11.7 million over numerous alleged supervisory failures. According to FINRA, LPL Financial has had long-standing and widespread supervisory problems, including poor oversight of brokers’ sales of complex investment products. LPL has agreed to pay a $10 million fine and $1.66 million in restitution to 327 LPL customers who purchased non-traditional exchange traded funds (ETFs). LPL has been the focus of numerous FINRA arbitration claims over the past several years with claims of unsuitable investments and other wrongdoing.

Among the many supervisory failures that FINRA cited are a pair of LPL brokers who allegedly made misleading claims about securities they were selling during a radio show they broadcasted in Farsi. Even after FINRA sanctioned LPL for not supervising the broadcasts, LPL did not improve its monitoring for more than two years afterward. FINRA also alleged that LPL failed to supervise sales of risky, leveraged, inverse and inverse-leveraged ETFs. Such products are risky and complex and required daily monitoring, but LPL failed to make sure that its brokers monitored customer accounts.

This is just the latest in a long line of problems for LPL, which has been accused of numerous forms of misconduct as of late, including improper sales of REITs and other private placements. If you lost money in your LPL investment account, contact DKR for a free case evaluation with our securities fraud lawyer.

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