FINRA Fines LPL Financial Again
The Financial Industry Regulatory Authority Inc. has fined LPL Financial again, this time $900,000 for failing to either send or create records that it had sent to customers more than 1.6 million required account notices. The fine was levied at the end of 2016, but it was just reported on LPL’s public BrokerCheck profile.
The Securities industry rules require that account notices be sent to customers when a suitability determination had been made. LPL Financial apparently failed to send more than 25% of the required notices. While LPL Financial has stated that it self-reported the violation and now is committed to enhancing its compliance policies, it seems a bit late.
LPL Financial is the largest independent broker-dealer in the United States with more than 14,000 brokers in the company. The firm has had multiple regulatory problems over the past several years, leading to $70 million in fines and restitution in 2014 and 2015 alone. Each time LPL is fined, it announces that it is improving its procedures and compliance. Somehow, LPL Financial keeps finding its way into trouble.
Recent LPL Financial Fines
Massachusetts regulators recently ordered LPL Financial to pay up to $3.7 million in fines and restitution as a result of an investigation into sales of unsuitable variable annuities by a Boston-based LPL broker. In December, FINRA fined LPL $750,000 for records retention violations, which made the firm vulnerable to cyber security threats.
Time will only tell if LPL will finally clean up its act and start taking its regulatory and client protection obligations seriously. We have previously have reported on LPL for fine related to leveraged ETF investments and for misleading broker titles.