LPL Financial, one of the largest independent broker-dealers in the U.S., has been fined $18 million by the Securities and Exchange Commission (SEC) for serious failures in its anti-money laundering (AML) compliance programs. This penalty underscores long-standing concerns about the firm’s ability to meet regulatory standards and protect investors. If you have accounts with LPL Financial, it’s important to understand what this fine means and how it could impact you.
If you or someone you know has suffered significant investment losses working with LPL Financial or another brokerage firm, don’t hesitate to reach out to Meyer Wilson today. Our attorneys are experienced in securities fraud cases and will help to guide you through the process with a free consultation to determine whether your losses are the result of actionable misconduct.
SEC Findings: Why LPL Financial Was Fined and What Went Wrong
LPL’s Compliance Failures
The SEC investigation found that LPL Financial’s compliance failures were not isolated incidents but part of a larger pattern of negligence. Despite having policies in place since 2019 to restrict high-risk accounts, the firm failed to enforce its own rules, allowing problematic accounts to remain active for years. These violations included:
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Failing to properly screen and monitor high-risk customers, including those linked to foreign entities and cannabis-related businesses.
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Ignoring red flags from internal compliance screenings that should have triggered account restrictions or closures.
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Allowing thousands of potentially non-compliant accounts to remain open, exposing the financial system to money laundering risks.
By failing to implement critical safeguards, LPL Financial violated the Bank Secrecy Act, which requires financial firms to detect and report suspicious activities. The SEC determined that LPL’s lack of oversight created opportunities for illicit financial activity to go undetected.
LPL Financial Ignored Red Flags and Allowed High-Risk Accounts to Operate
Among the most concerning findings:
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At least 1,400 cannabis-related accounts, holding $350 million, remained active despite federal restrictions on marijuana-related businesses.
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Up to 4,000 foreign accounts in 84 countries were maintained, with over 90% linked to jurisdictions that LPL itself had flagged as high-risk or prohibited.
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Many of these accounts should have been restricted or closed under LPL’s own anti-money laundering policies but were allowed to continue operating.
Despite repeated warnings from internal audits and regulatory authorities, LPL failed to take corrective action, allowing these accounts to remain open. At one point, brokers were even able to bypass account restrictions with a simple phone call, removing compliance measures without proper documentation. This pattern of misconduct resulted in one of the largest AML-related fines imposed by the SEC in recent years.
We Have Recovered Over
$350 Million for Our Clients Nationwide.
How This SEC Fine Impacts Investors
What This Means for Investors
Beyond the financial penalty, this case raises serious concerns about LPL Financial’s ability to protect investors and uphold regulatory standards. Investors who rely on LPL for financial management may question whether the firm is prioritizing compliance and safeguarding client accounts.
This latest fine adds to LPL’s history of compliance issues, including past penalties for failing to detect fraudulent activity and improperly supervising high-risk accounts. Regulators such as the Financial Industry Regulatory Authority (FINRA) and the U.S. Treasury Department will likely continue monitoring LPL for additional infractions. Additional investigations or future penalties could further affect LPL’s reputation and stability, potentially influencing investor confidence and client relationships.
Key Risks Investors Need to Be Aware Of
If you have accounts with LPL Financial, consider:
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How well your accounts are being monitored for suspicious activity.
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Whether excessive or hidden fees are impacting your investments.
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If your financial advisor has been transparent about compliance and security measures.
For investors, this raises serious questions about whether their accounts are truly secure. If a firm like LPL fails to enforce its own policies, how can investors trust that their financial interests are being protected? If you’ve experienced financial harm due to LPL’s compliance failures, you may have legal options.
How Meyer Wilson Can Help Investors Affected by LPL Financial
LPL Financial’s repeated compliance failures put investors at risk. If you suspect you’ve lost money due to inadequate oversight, excessive fees, or advisor misconduct, Meyer Wilson can help. We hold brokerage firms accountable for regulatory violations.
If you or someone you know has been a victim of losses through LPL Financial, contact our team at Meyer Wilson today. With over 20 years of experience and $350 million in recovered losses for our clients, we are well-versed in handling cases such as these.
Recovering Losses Caused by Investment Misconduct.
