LPL Financial to Pay $6 Million to Settle FINRA Charges 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.
As reported by WealthManagement.com, 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 financial advisors between January 2012 and August 2019.
FINRA claimed that 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 Business Development Companies (BDCs), leading to losses for 16 customers.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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