LPL Financial Fined for Municipal Bond Fraud

FINRA has fined Boston-based brokerage firm LPL Financial LLC $60,000 for a form of municipal bond fraud. LPL was found to have sold municipal bonds to customers and bought municipal bonds from customers at prices that were not fair and reasonable. Charging customers unfairly high prices for bond purchases and paying unfairly low prices to customers for bond sales is a form of securities fraud that is receiving increased regulatory scrutiny. A number brokerage firms have been fined as of late for this form of municipal bond fraud. Investors who are subject to unfair bond pricing can pursue FINRA arbitration claims against the brokerage firm to recover damages.

A recent study determined that brokerage firms have generated billions of dollars in improper revenue over the past decade by charging unfair mark ups and mark downs on municipal bond trades. These unfair charges cost investors billions of dollars. But it can be difficult for investors to determine that they are being gouged by greedy brokerage firms. Investors with sizeable bond portfolios should have their bond trades evaluated to determine whether the brokerage firm is charging excessive mark ups and mark downs on municipal bond transactions.

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