LPL Financial to Pay $1.4 Million Fine in Settlement with State Regulators

By September 23, 2015 September 20th, 2017 News

LPL Financial, LLC (“LPL”) has agreed to a $1.4 million fine and to return funds relating to allegations it inappropriately sold real estate investment trusts (“REITs”) to customers.

According to a North American Securities Administrators Association press release, “The investigation concluded that LPL, through its agents, sold non-traded REITS in excess of the REIT’s prospectus standards, various state concentration limits or LPL’s Alternative Investment Guidelines. The investigation also found that LPL failed to implement a supervisory system that was reasonably designed to achieve compliance with state law.”

As part of the settlement, LPL has agreed to remediate losses for unsuitable REIT sales that the firm sold from January 1, 2008 through December 31, 2013 that violated the prospectus standards, state concentration limits, or LPL’s own guidelines. An independent third party is reviewing the transactions – believed to be more than 2,000 – and LPL will make an offer of remediation upon completion of the third-party review, according to NASAA.

The settlement was the result of a multi-state investigation headed by the Nevada Secretary of State Securities Division. The settlement will be split among 48 states; Massachusetts has already resolved its own claims against LPL, and a case brought by New Hampshire regulators is pending.

Investment News Article

http://www.investmentnews.com/article/20150923/FREE/150929953/lpl-to-pay-1-4-million-fine-and-return-investor-money-for-certain

 

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