Linsco/Private Ledger/LPL Financial Services

LPL Financial is the largest independent broker/dealer supporting more than 11,000 financial advisors nationwide from headquarters in Boston, Charlotte, and San Diego. LPL Financial was formed in 1989 through the merger of two small but successful brokerage firms, Linsco (established in 1968) and Private Ledger (founded in 1973). The goal of this merger was to create a formidable alternative to Wall Street firms. In 2005, LPL Financial sold a 60% ownership stake to two private equity partners, Hellman & Friedman, LLC, and Texas Pacific Group. LPL Financial claims to be dedicated to providing service and training to its brokers. LPL Financial also represents that it provides its brokers with leading-edge tools and technology and access to independent investment research.

LPL Bartered Client Trades for Mutual Fund Benefits

The NASD fined Linsco/Private Ledger $3.6 million for directing brokerage transactions of its clients in exchange for preferential treatment from mutual fund companies. Brokerage firms are required to seek “best execution” for their clients when making trades and bartering such orders violates this rule and gives rise to improper “self-dealing.” “When recommending mutual fund investments, firms must act on the basis of merits of the funds and the investment objectives of the customers and not because of other benefits the brokerage firm will receive.”

LPL Fined Over Broker Disclosure Violations

The NASD censured and fined Linsco/Private Ledger for failing to timely make required disclosures about customer complaints. Such disclosures must be made within 30 days. But a number of disclosures were years late or not made at all. The investigation resulted in censures and fines totaling $9.2 million against 29 firms, including LPL.

If you suffered investments losses, please contact us or communicate with a Dimond Kaplan & Rothstein, P.A. attorney at 888-380-6216 or jkaplan@dkrpa.com for a free case evaluation.