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

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

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

INTV

FPA's Shannon Pike: What's next for the financial advisory profession?

As we head toward 2019 and beyond, regulation and compensation will continue to dominate the headlines. Shannon Pike of the FPA explains.

Latest news & opinion

LPL rolls back recruiting policy aimed at driving more assets to its corporate RIA

LPL erases $50 million hurdle for new advisers to join so-called hybrid firms.

Don't be fooled by the numbers — the industry is in a dangerously vulnerable state

Last year's stock market gains helped advisers turn in solid growth in assets and revenue, but that growth could disappear in the next market downturn.

Divided we stand: How financial advisers view President Trump

InvestmentNews poll finds 49.2% approve of his performance, while 46.7% disapprove. How has that changed over the course of his presidency?

10 states with the most college student debt

Residents of these states have the most student debt when you consider their job opportunities.

Ex-Wells Fargo brokers sue for damages, claiming they lost business in wake of scandals

In a Finra arbitration complaint, two brokers allege that Wells Fargo's problems damaged their business.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print