FINRA Fines LPL Financial $950,000 for Violation Related to Sales of Alternative Investment Products

Posted on April 4th, 2014 at 9:00 AM

From the Desk of Jim Eccleston at Eccleston Law Offices:

FINRA has fined LPL Financial $950,000 for supervisory deficiencies related to its sales of a wide range of alternative investment products including nontraded REITs, oil and gas partnerships, business development companies, hedge funds, managed futures and other illiquid investments. This is the second time for LPL Financial is in trouble with regulators for deficiencies in supervision of sales of alternative investments, as LPL Financial has spent the past year and a half tangling with securities regulators.

Alternative investments, including REITs, may have concentration limits for investors in their offering documents. Even though LPL reportedly also has concentration limits, it exposed customers to unacceptable risks by not having an adequate system in place to accurately review whether a transaction had complied with suitability requirements imposed by the states, the product issuers and the firm itself. The firm also failed to train its registered representatives to apply all the suitability guidelines appropriately.

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston

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