SEC Charges LPL Financial with Anti-Money Laundering Failures
From the desk of Jim Eccleston at Eccleston Law
The Securities and Exchange Commission (SEC) has charged LPL Financial LLC, a broker-dealer and investment adviser, with multiple violations of anti-money laundering (AML) regulations. According to SEC.gov, LPL has agreed to pay a $18 million civil penalty and improve its AML policies and procedures to settle the charges.
The SEC’s order states that between May 2019 and December 2023, LPL failed to comply with its customer identification program and neglected to verify the identities of certain customers. SEC.gov also reports that LPL failed to close or restrict thousands of high-risk accounts, including cannabis-related and foreign accounts, despite their prohibition under the firm’s AML policies.
“Federal law requires broker-dealers to ascertain the identity of their customers and to conduct ongoing customer due diligence to aid the government in its efforts to detect and prevent money laundering,” said Stacy Bogert, Associate Director of the SEC’s Division of Enforcement. “When broker-dealers like LPL fail to comply with their AML obligations, they put the securities markets at risk.”
The SEC found that LPL willfully violated Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-8 under the Act. Without admitting or denying the SEC’s findings, LPL agreed to a cease-and-desist order, censure, and the $18 million penalty. Additionally, the firm will continue working with a compliance consultant to review and enhance its AML policies and procedures.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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