LPL Financial Agrees to $6 Million Settlement with FINRA Over Regulation Best Interest Lapses

Posted on March 1st, 2024 at 11:34 AM
LPL Financial Agrees to $6 Million Settlement with FINRA Over Regulation Best Interest Lapses

From the desk of Jim Eccleston at Eccleston Law

LPL Financial has agreed to pay over $6 million to settle charges by FINRA, alleging violations of Regulation Best Interest in recommending trades involving certain listed business development companies.

The settlement includes a $5.5 million fine, restitution of $651,374.51, and a censure. While not admitting or denying the charges, LPL was accused of failing to properly oversee the suitability of certain transactions conducted by its registered representatives between January 2012 and August 2019.

As reported by WealthManagement.com, FINRA claimed that LPL repeatedly failed to properly oversee the suitability of certain transactions between January 2012 and August 2019. LPL did not generate exception reports to identify potential sales practice violations, failed to collect necessary investment profile information, and sent letters misstating sales charges to about 11,300 customers. Additionally, the firm's supervisory system did not reasonably alert supervisors to over-concentrated investments in listed BDCs, leading to losses for 16 customers.

 

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

Tags: eccleston, eccleston law, finra

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