Former LPL Affiliate Compliance Chief Suspended by FINRA for Unauthorized $1 Million Transfer

Posted on September 28th, 2023 at 2:20 PM
Former LPL Affiliate Compliance Chief Suspended by FINRA for Unauthorized $1 Million Transfer

From the desk of Jim Eccleston at Eccleston Law 

The Financial Industry Regulatory Authority (FINRA) fined and suspended Jeffrey K. Kirkpatrick, a former chief compliance officer at a registered investment advisor previously affiliated with LPL.

Based in Dacula, Georgia, Kirkpatrick accepted a four-month suspension and a $10,000 fine to settle allegations. In July 2020, while serving as CCO at Hamilton Investment Counsel, he approved his business partner's request for an unauthorized wire transfer of $1 million from a client account without customer confirmation, violating firm policy.

Kirkpatrick's business partner, Eric S. Hollifield, was not named in the settlement but was accused by the Securities and Exchange Commission (SEC) last year of stealing $1.7 million from three clients in 2020 and using the money to buy a home in Winder, Georgia, outside Atlanta.

Between 2019 and 2021, Kirkpatrick violated FINRA Rule 4511 and Rule 2010 by using his personal cell phone to text Hollifield about firm business at least ten times, causing LPL to maintain inaccurate books and records. According to AdvisorHub, this led to a second regulatory issue for Kirkpatrick regarding his partner's alleged fraud. In 2022, the SEC barred Kirkpatrick from acting in a supervisory or compliance capacity for five years due to his supervisory failures.

The SEC alleged that from February 2020 to June 2021, Kirkpatrick received communications indicating that Hollifield was engaged in an outside business activity but failed to enforce LPL's compliance policies requiring reporting such activity. Hamilton, the registered investment advisor (RIA), was also censured and fined $150,000 by the SEC. Kirkpatrick settled the FINRA case without admitting or denying FINRA's findings, and he could not be reached for comment.

 

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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