Massachusetts' Galvin fines LPL $250,000 over senior certifications

Firm agrees to pay up to settle charges that some of its brokers were using titles that did not comply with state's senior designation regulations

Jul 14, 2015 @ 10:13 am

By Mason Braswell

+ Zoom

LPL Financial Inc. agreed to pay $250,000 to Massachusetts securities regulators to settle charges that its representatives misrepresented their qualifications in working with senior investors.

Massachusetts' top securities cop, William F. Galvin, accused the firm, which has its headquarters in Boston and San Diego, of approving brokers' use of senior-specific titles on business cards that did not comply with the state's senior designation regulations.

“In these days when workers are increasingly having to assume responsibility for their

retirement savings, it is vital that the financial services industry not employ titles that suggest an expertise in advising senior citizens when none exists,” Secretary Galvin said in a statement. “That is why Massachusetts has these rules in place.”

After Mr. Galvin's office discovered one such instance, LPL cooperated with the regulator's investigation and conducted an internal review and uncovered at least 10 brokers who may have been using titles that did not comply with the state's senior designation regulations, according to a statement from the Massachusetts secretary of the commonwealth.

The brokers were not named.

LPL had approved the title on one broker's business card three times, according to the statement.

“Pursuant to the Senior Designations Regulations, use of senior-specific credentials and designations which improperly suggest or imply certification or training beyond that which the titleholder possesses is prohibited,” the settlement stated. “Since June 1, 2007, LPL did not establish, maintain, nor enforce a procedure to review senior-specific titles for compliance with the Senior Designations Regulations in the Commonwealth.”

LPL agreed to a cease and desist order and to review its procedures regarding senior designations.

“LPL has taken steps to implement enhanced review procedures and has agreed to pay a fine of $250,000,” wrote Brett Weinberg, a spokesman for LPL, in an emailed statement.

Last week, Mr. Galvin's office charged another broker-dealer, Securities America Inc., after a broker allegedly used “bait and switch” advertising to market to seniors.

The fine is the latest in a string of regulatory issues that LPL has faced from the state's regulators over failure to supervise claims. In October, LPL paid $541,000 to reimburse seniors after Mr. Galvin accused the firm of failing to properly supervise charges that seniors paid when switching variable annuities.

In December 2012, Mr. Galvin sued LPL over the sales practices of its brokers regarding real estate investment trusts. He charged LPL with failure to supervise registered representatives who sold the nontraded REITs under terms that violated both state limitations and the company's rules.

In June 2014, the firm was hit with a $2 million fine and ordered to pay $820,000 as part of a settlement with the Illinois Securities Department over failing to maintain adequate books and records documenting variable annuity exchanges.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

B-D Data Center

Use InvestmentNews' B-D Data Center to find exclusive information and intelligence about the independent broker-dealer industry.

Rank Broker-dealers by

Featured video

Events

Why are most advisers stuck in the trenches?

What are top advisers doing to stand out? Scott Conroy of Carson Group offers some strategies for success.

Video Spotlight

The Search for Income

Sponsored by PGIM Investments

Recommended Video

Path to growth

Latest news & opinion

T. Rowe Price steps up its game to serve financial advisers

The Baltimore-based mutual fund giant is more aggressively targeting financial advisers with a beefed-up wholesale crew and placement on custodial platforms.

The most important tax changes for 2018

The Internal Revenue Service issued inflation adjustments to more than 50 tax provisions for 2018.

Shift to Roth 401(k)s 'highly likely' part of tax reform: former Treasury official Mark Iwry

Mandated contributions to Roth accounts would likely only be partial, as opposed to having a full repeal of pre-tax accounts.

E*Trade acquiring custodian Trust Company of America

Discount broker buying second-tier custodian for $275 million.

Another thousand Dow points higher, and investors yawn

Market milestones keep falling like dominoes, with 51 records broken so far this year.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print