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Thursday, September 19, 2019

LPL Financial could face about $26 million in civil penalties

State AG

By Marian Johns | Feb 25, 2019

ANNAPOLIS, Md. — LPL Financial LLC has reached a settlement agreement with the state of Maryland that could result in more than $26 million in civil penalties and will resolve allegations the company's policies and actions resulted in unregistered, non-exempt securities sales. 

According to a Jan. 31 press release from the Maryland Attorney General's Office, LPL sold unregistered, non-exempt securities and did not ensure proper compliance of the state's required securities registration. LPL also failed to keep compliance records and did not practice "due diligence" during the retention, use and eventual cancelation of some "third party services" that were needed for compliance and did not supervise its agents to ensure compliance with state laws, the Attorney General's Office said. 

“As a result of this multistate settlement, Maryland investors will have their money returned plus interest,” Maryland Attorney General Brian Frosh said in a statement. “Before investing hard-earned savings, call the securities division of my office to determine the status of an investment advisor or security.”

The settlement includes LPL repurchasing securities to include 3 percent simple interest from Maryland investors that are held in LPL accounts and are not registered, non-exempt or fixed income securities sold since October, 2006, according to Frosh's office.  LPL will also conduct a full review of its new securities and will pay a $499,000 penalty, the office said.

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