The regulator cited a broad breakdown with the firm's failures to supervise client and adviser information.
Mr. Casady will continue to work with Vestigo Ventures, a venture capital firm based in Cambridge, Mass.
Amy Webber will become the firm's new chief executive, while Mr. Schwartz takes on the role of executive chairman.
The team had $288 million in client assets and generated $1.7 million in fees and commissions annually.
The new head of one of the largest independent broker-dealers served as head of wealth management at UBS's Advisor Group Americas.
Government says he took in $1.4 million, diverting some of it to investors and using much of the money on himself.
One analyst says company likely not for sale at this time after all.
Replacing Mark Casady as chief executive, Mr. Arnold is slated to receive $5.4 million in total compensation next year, almost three times the $1.85 million he earned in 2015.
There could be a real opportunity for the first time in years for private equity players targeting advisory firms.
Mr. James has long been involved in leadership roles at the broker-dealer his father founded in 1962.
The Denver area practice will operate as First Avenue Wealth Partners.
Both former brokers settled and refused to testify.
Taking $2.6 billion in assets with him, Carson is second prominent adviser to leave LPL this month. <b><i>(More: <a href=""" target=""_blank"" rel="noopener noreferrer">Carson on why we're on the eve of massive disruption in financial services</a>)</i></b>
Morgan Stanley, Ameriprise Financial, Raymond James and others are finally showing their cards.
Firm executives would not comment during its earnings call on a report that emerged last month that it was exploring a sale.
Investment bank called in to evaluate what LPL considered a low-ball offer, sources said. (Related read: <a href=""" target="”blank"" rel="noopener noreferrer">LPL Financial's problems keep piling up</a>)
Founders of The Filla Latzke Group pull stakes
