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

Featured video

Consuelo Mack WealthTrack

How to maximize the effectiveness of your charitable giving

Donor-advised funds let you take the tax deduction for charitable donations now, while postponing when you give the money away. Pamela Norley, president of Fidelity Charitable, and Elda Di Re, partner at Ernst & Young, discuss the strategy.

Latest news & opinion

Attorney blasts Finra after regulator loses insider trading case

Lawyer says it was 'slimy' of Finra to publicize the case while it was still being litigated.

Will Jeffrey Gundlach's Trump-like approach on Twitter work in financial services?

The DoubleLine CEO's attacks on Wall Street Journal reporters is igniting a discussion on what's fair game on social media.

Fidelity wins arb case against wine mogul but earns a rebuke from Finra

In the case of investor Peter Deutsch, Fidelity doesn't have to pay any compensation, but regulator said firm put its interests ahead of his.

Plaintiffs win in Tibble vs. Edison 401(k) fee case

After a decade of activity around the lawsuit, including a hearing before the U.S. Supreme Court, judge rules a prudent fiduciary would have invested in institutional shares.

Advisers get more breathing room to make Form ADV changes

RIAs can enter '0' in some new parts of the document before their annual filing next year.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print