SEC Bars Former LPL Broker for Churning

A broker formerly registered with LPL Financial was barred by the Securities & Exchange Commission (SEC) for churning, an illegal technique used by brokers that involves unnecessary trading of an investor’s account in order to line a broker’s pockets with excessive commissions and fees. This is one of the most egregious and common form of broker fraud.

Paul Lebel, who worked for LPL from 2008 to 2014, was accused of defrauding four customers by churning their accounts to generate commissions. According to the SEC, Lebel “exercised de facto control” over his customers’ accounts and used them to excessively trade mutual fund shares, which carry large front-end load fees.

In particular, he bought and sold mutual fund A shares, which are meant to be long-term investments to hold, generating $50,000 in commissions.

The SEC found Lebel’s excessive trading to be inconsistent with his customers’ investment objectives and best interests by executing a number of trades that had no other justification other than to generate commission. Lebel has agreed to pay $56,500 as part of his settlement.

Have you been a victim of churning?

The attorneys at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from brokers and brokerage firms for their wrongful actions.

If you invested with Paul Lebel or believe that your broker may be churning your investment account, you may have certain legal rights that require your immediate attention.

Contact a securities fraud attorney today to schedule an appointment or consultation.

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