FINRA fined LPL Financial Corp. a total of $220K in March for three separate matters, according to the Boston Business Journal ("LPL Financial fined by regulators," Boston Business Journal, March 21, 2011). Two of the three matters related to failures in LPL Financial's supervisory systems.
The first matter, for which LPL Financial was fined $100,000, related to the firm's "failure to enforce its supervisory system," in relation to approximately 3 million e-mails, which regulators said were processed improperly because of a technological glitch.
The second matter, which also resulted in a $100,000 fine, involved a failure to "establish, maintain, and enforce a supervisory system," which would "review and monitor all transmittals of funds and securities from customer accounts to third party accounts and to registered representatives' accounts."
The third (and smallest) fine was due to a "failure to use reasonable diligence" to obtain the best price and inter-dealer market for a customer.
Over the past few years, LPL Financial has been the target of several lawsuits including a class action lawsuit filed last summer against the firm for its recommendation and sale of variable annuities. In the suit, investors alleged that the firm misrepresented the annuities and misled investors by recommending an unsuitable product. The firm has also come under fire from the SEC, which (in 2008) charged LPL Financial with failing to protect customer privacy.
LPL Financial Corp. is the corporate child of Boston-based LPL Investment Holdings, Inc.
