LPL set to settle with Finra over e-mail tracking

Broker-dealer works to enhance systems to get over latest compliance hurdle.
MAY 21, 2013
Sometime this quarter, LPL Financial LLC expects to settle with the Financial Industry Regulatory Authority Inc. a matter related to broker and adviser e-mail surveillance. The broker-dealer's chief executive, Mark Casady, highlighted the e-mail surveillance issue yesterday in a call with Wall Street analysts who cover the company. The concern comes on the heels of two other recent settlements LPL has had with regulators, one over sales of nontraded real estate investment trusts and the other over the timely distribution of mutual fund prospectuses. “Turning to the regulatory environment, we self-reported a matter related to e-mail surveillance and production to our principle regulator in 2011,” Mr. Casady said. “Since then, we have been working to implement enhancements to our supervisory systems and procedures related to these e-mail issues,” he said. The discussions with Finra also involve the resolution of potential rule violations, Mr. Casady said, with the belief that the company will settle the matter by the end of June. LPL spokeswoman Betsy Weinberger was not immediately available for comment. With more than 13,000 affiliated reps and advisers, LPL is the largest independent-contractor broker-dealer, but broker-dealers of all stripes have had varied levels of success in putting in place systems that properly supervise rep and adviser e-mails. The e-mail supervision issue is the latest compliance hurdle for LPL. In February, the Massachusetts Securities Division hit the company with a $500,000 administrative fine over the sale of nontraded REITs, which involved investors who bought shares of several different REITs in violation of state limitations, as well as the company's own rules and procedures. Massachusetts also required LPL to set aside $2 million for potential restitution to investors who bought shares of the REITs. In its consent order with Massachusetts regulators, LPL admitted to a series of statements of fact around sale of the REITs but neither admitted nor denied allegations of insufficient training and oversight of sales of nontraded REITs, as well as alleged violations of securities laws. And at the end of last year, Finra fined LPL for failing to maintain supervisory systems and written procedures to ensure the delivery of mutual fund prospectuses. The firm consented without admitting or denying to Finra's findings.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.