Finra slaps LPL with $900,000 fine for record-keeping snafu
Firm failed to send, or create records that it had sent to customers more than 1.6 million required account notices during the previous 36-month period.
The Financial Industry Regulatory Authority Inc. fined LPL Financial $900,000 in December for failing to send, or create records that it had sent to customers more than 1.6 million required account notices during the previous 36-month period. Although the fine was issued at the end of last year, it was not reported on LPL’s BrokerCheck profile until this week.
Industry rules require that “account notices be sent to customers at 36-month intervals for each account in which a suitability determination had been made,” according to the settlement. “Over this seven-year period, LPL failed to send over 25% of the required written notices.”
LPL responds
LPL accepted the Finra settlement without admitting or denying its findings.
“We’ve made a long-term commitment to enhancing our risk managment and compliance structures,” LPL spokesman Jeffrey Mochal said in an email. “We self-reported this issue to Finra and are pleased to have resolved it.”
The largest independent broker-dealer with more than 14,000 reps and advisers, LPL Financial has been bedeviled with compliance issues over the past few years, paying $70 million in fines and restitution in 2014 and 2015 alone. The company has assured its advisers and investors that it had resolved the most significant historical matters, but the fines continue to pile up.
Just last month, LPL was ordered by Massachusetts regulators to pay up to $3.7 million in fines and restitution to investors as a result of an investigation into sales of unsuitable variable annuities by a former top-producing adviser based in Boston. And in December, Finra fined LPL $750,000 for breaches related to the retention of firm and client electronic records, making the firm potentially vulnerable to cybersecurity threats.
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