LPL Financial and its top adviser in Louisiana cut ties last month after the adviser received a Wells notice announcing an investigation by the Financial Industry Regulatory Authority Inc.
Garrett Andrew Ahrens and his firm, Ahrens Investment Partners, left LPL on Aug. 18, according to industry registration records. Mr. Ahrens has been with LPL since 1998 and was ranked as one of the top advisers in Louisiana this year by Barron's, which reported his assets as $775 million.
Mr. Ahrens was given notice on August 4 that Finra was investigating potential misuse of consolidated reports, which provide an overall look at clients' finances, including accounts held outside the firm. The question was whether the reports provided by Mr. Ahrens contained incorrect information, the regulator said. LPL described the allegations as “presenting customers with consolidated reports that contained statements that were false, exaggerated, unwarranted or misleading,” according to a report on his CRD Snapshot, a detailed background filed with state securities regulators.
Mr. Ahrens, who denied wrongdoing, claimed in an email that it's all an unfortunate coincidence.
“My competitors apparently are working hard to take advantage of Finra's queries, and some are trying to link disparate and unconnected events to portray a negative portrait of our firm,” he said.
He also denied the specific allegations, saying in a response filed with Finra that the customers had specifically requested the reports and that he had signed statements from the customers saying that they were aware that the reports were for informational purposes only and did not replace statements from the custodian or issuer.
Mr. Ahrens said in the email that he had been working with Finra for “well over a year regarding some consolidated reporting issues.” LPL was representing him, he said, and the LPL representative was told close to nine months ago that the matter had been settled.
Mr. Ahrens' registration with LPL was terminated voluntarily, according to his CRD Snapshot report.
He said he made the “difficult decision” to move from LPL “separate and aside from the Finra inquiry,” and described the timing as “coincidental and unfortunate.”
A spokesman for LPL, Brett Weinberg, declined to comment.
Mr. Ahrens is no longer registered with a broker-dealer. He was briefly registered with Mutual Securities Inc., a firm in Camarillo, Calif., which discharged him on August 19. They alleged they were “unable to affiliate in a supervisory capacity due to pending Wells notice,” according to BrokerCheck. Executives for Mutual Securities did not return a message seeking comment.
Ahrens Investment Partners, which was dually registered, now operates as his own registered investment adviser and uses Fidelity as its custodian.
In May, Finra fined LPL $11.7 million for alleged supervisory failures, which included failing to monitor the creation and use of consolidated reports. LPL “failed to ensure that these reports reflected complete and accurate information,” according to a release announcing the fine.
Mr. Ahrens has eight customer disputes on his BrokerCheck record. All but two of the claims were denied. Another, however, which involved claims of unsuitability tied to investments in real estate investment trusts, was settled for $875,000, and another claim tied to REITs was settled for $97,500.
Both were settled to avoid costs of litigation, according to a comment provided to Finra on Mr. Ahren's behalf. He did not contribute any money to the $97,500 settlement, according to BrokerCheck.