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Thursday, January 23, 2020

New Jersey secures $975,000 from firm that allegedly sold unsuitable investments

By Mark Iandolo | Nov 14, 2017

Law money 10

NEWARK, N.J. (Legal Newsline) — New Jersey Attorney General Christopher S. Porrino announced Nov. 1 that LPL Financial LLC will pay $975,000 after allegations of selling unsuitable alternative investments.

“This substantial settlement with LPL Financial sends a message that the securities industry cannot sell unsuitable investments to clients who are unlikely to be able to bear the financial risks,” Porrino said. “The standards governing sales of alternative investments are in place to protect investors, and the bureau will take action when these standards are ignored.”

According to allegations, financial agents at LPL sold alternative investments that were unsuitable for certain investors. Additionally, the company failed to supervise the sales made by their agents or keep proper books and records.

“Because of their illiquidity and risks, alternative products are not suitable for all investors,” said Sharon Joyce, acting director of the Division of Consumer Affairs. “Broker/dealers have an obligation to carefully screen prospective investors to make sure these securities meet their clients' investment objectives.”

Handling the case for the state were deputy chief Amy Kopleton, director of examinations Stephen Bouchard, and former investigator Scott Haggmark.

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U.S. Attorney's Office for the District of New Jersey