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Thursday, April 9, 2020

LPL Financial LLC alleged faulty practices result in settlement agreement with Delaware Attorney General's Office

By Tia Benton | Oct 23, 2015


WILMINGTON, Del. (Legal Newsline) - A Delaware broker-dealer and federally covered investment adviser settled with the Delaware Attorney General’s Investor Protection Unit and the Massachusetts Attorney General’s Office over its practices regarding leveraged exchange trade funds.

LPL Financial LLC allegedly failed to disclose to its clients the risks associated with leveraged exchange trade funds, to verify that the funds were suitable investments for their clients, and to adequately supervise those investment professionals whose clients held leveraged exchange trade funds for extended periods of time.

LPL settled with the aforementioned attorney generals by entering into a consent order and also agreeing to restore to eligible Delaware and Massachusetts investors full measure of their losses. LPL was also required to make changes in its training of its financial advisers, invoke restrictions on the leveraged trade funds available to each client, and notify financial advisers when the leveraged trade funds hold periods in client accounts exceed 30 days.

“State law requires investment professionals to fully disclose the risks associated with complex financial products and to ensure they are suitable investments for their clients,” Attorney General Denn said. “We’ve acted to hold LPL accountable to Delaware’s Securities Act to ensure all investment professionals are meeting those requirements and are properly supervised so that we can continue to safeguard the investments, pensions, and retirement funds of Delawareans.”

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Delaware Attorney General's Office