FINRA's Year-End Enforcement Blitz: LPL Financial and Interactive Brokers Face Major Penalties

Posted on March 19th, 2024 at 2:55 PM
FINRA's Year-End Enforcement Blitz: LPL Financial and Interactive Brokers Face Major Penalties

From the desk of Jim Eccleston at Eccleston Law

The Financial Industry Regulatory Authority Inc. (FINRA) concluded the year with significant penalties against two major firms, LPL Financial and Interactive Brokers.

InvestmentNews reports that LPL Financial settled with FINRA on December 27, agreeing to a $6.15 million settlement concerning its inadequate supervision of thousands of transactions conducted by financial advisors and brokers from 2012 to 2019 with product sponsors, termed as "direct" business in the industry. LPL agreed to pay a $5.5 million fine and $651,000 in restitution to clients without admitting or denying FINRA's findings.

Similarly, Interactive Brokers, specializing in equities and options trading, reached a $3.5 million settlement with FINRA on December 22 for failing to meet best execution and supervision standards from 2014 to 2021.

InvestmentNews opines that FINRA's end-of-year enforcement actions are not uncommon, often driven by the firms involved. In LPL's case, FINRA highlighted the firm's failure to ensure the reporting of direct transactions and supervision lapses in various areas, including inaccuracies in client communications regarding security switching charges and recommendations of traded business development companies from 2017 to 2022. Those settlements underscore FINRA's commitment to enforcing compliance and protecting investors within the securities industry.

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, finra

Return to Archive

TESTIMONIALS

Previous
Next

I just wanted to say thanks again for preparing and executing my case in such a professional manner. It was a pleasure to watch two professionals take such pride in their work, as well as becoming personally in tune with your client (Me). I would personally recommend you and your firm to anyone.

John O.

LATEST NEWS AND ARTICLES

March 13, 2025
Congress Considers Expanding the Accredited Investor Definition

A recent congressional hearing examined potential reforms to the accredited investor definition, a critical threshold determining who can participate in private market investments.

March 12, 2025
GPB Capital Investors May Receive Some Compensation Under Proposed Distribution Plan

GPB Capital Holdings investors have not received returns on their investments since 2018. According to InvestmentNews, after years of litigation, a court-appointed receiver has submitted a plan to return funds to the 17,000 investors who purchased $1.8 billion in GPB limited partnerships.

March 11, 2025
Former CNBC Analyst Pleads Guilty to $2.7 Million Securities Fraud Scheme

James Arthur McDonald Jr., a former financial advisor and frequent CNBC guest analyst, has agreed to plead guilty to securities fraud, admitting to defrauding investors out of at least $2.7 million, as reported by ThinkAdvisor. The felony charge carries a maximum sentence of 20 years in federal prison.