LPL Financial Faces Potential $50 Million SEC Fine for Recordkeeping Failures

Posted on September 13th, 2024 at 5:02 PM
LPL Financial Faces Potential $50 Million SEC Fine for Recordkeeping Failures

From the desk of Jim Eccleston at Eccleston Law

LPL Financial faces a fine of up to $50 million from the Securities and Exchange Commission (SEC) for non-compliance with records preservation rules, as reported by InvestmentNews. The penalty relates to business-related electronic communications stored on personal devices or unauthorized messaging platforms.

The firm disclosed that negotiations are ongoing. This potential fine initially was reported by InvestmentNews, following LPL's disclosure in its third-quarter report in October. The broker-dealer recorded a $40 million expense in the third quarter of 2023 to account for the portion of the penalty not covered by its captive insurance subsidiary.

The SEC also has charged multiple broker-dealers and investment advisors for widespread failures to maintain and preserve electronic communications, including WhatsApp messages and texts. Sixteen firms agreed to pay combined civil penalties exceeding $81 million.

 

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

Tags: eccleston, eccleston law, sec

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