LPL Faces $3.6 Penalty Relating to Non -Traded REIT Sales

New Hampshire securities regulators have filed a regulatory action against brokerage firm LPL Financial seeking $1.2 million in fines and costs and seeking to force LPL to repay customers $2.4 million for allegedly unsuitable sales of real estate investments to elderly clients. Over the past several years, LPL has been the subject of numerous customer claims that LPL brokers have sold risky and unsuitable REITs to investors and have resulted in REIT Investment loss.

The securities regulator alleges that the sales of the non-traded REIT were “unsuitable and unlawful” and that LPL failed to supervise its brokers. The case stems from sales of non-traded REITs that an LPL broker made to an 81-year-old New Hampshire resident in January 2008. Non-traded REITs generally are illiquid, risky, and involve high fees. The elderly LPL customer lost a significant amount of money from the investment. New Hampshire regulators have accused LPL of placing a higher concentration of risky alternative investments in elderly investors’ investment portfolios than LPL internal rules allowed.

This regulatory action follows on the heels of an apology that LPL’s CEO made to LPL Financial shareholders for the firm’s compliance missteps involving improper sales of REITs and variable annuities. LPL has paid millions of dollars in fines and to settle FINRA arbitration claims over the past several years as a result of its misconduct.

If you or anyone you know lost money in investments that an LPL broker recommended to you, contact Dimond Kaplan & Rothstein, P.A. for a free consultation. We will evaluate your potential investment loss claims and discuss your options for attempting to recover your reit investment loss.

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