LPL censured and fined $375,000 over brokered CD record keeping

Finra says firm did not have adequate risk-disclosure procedures in place
FEB 09, 2018

The Financial Industry Regulatory Authority Inc. has censured LPL Financial and fined it $375,000 for having inadequate procedures in place to fully disclose all material risks and features of brokered certificates of deposit that it sold to customers. From 2010 to 2016, Finra said, LPL sold $533 million worth of brokered CDs in nearly 8,000 transactions, generating over $1.6 million in firm revenues. The regulator said that during that time, LPL failed to implement a "supervisory system reasonably designed to ensure that its registered representatives were trained on all of the material risks and features of the brokered CDs and that the firm adequately disclosed all material risks and features of the Brokered CDs to customers." As a result of the deficient supervisory system, Finra said that an LPL rep made material misrepresentations to five elderly customers regarding the limitations on the ability, upon death, of their estates to redeem their 20-year brokered CDs at par value. The five elderly customers or their estates suffered losses of approximately $75,000 because they were unable to fully redeem the brokered CDs and had to sell them in the secondary market. LPL subsequently remediated the customers' losses, Finra said.

Latest News

No succession plan? No worries. Just practice in place
No succession plan? No worries. Just practice in place

While industry statistics pointing to a succession crisis can cause alarm, advisor-owners should be free to consider a middle path between staying solo and catching the surging wave of M&A.

Research highlights growing need for personalized retirement solutions as investors age
Research highlights growing need for personalized retirement solutions as investors age

New joint research by T. Rowe Price, MIT, and Stanford University finds more diverse asset allocations among older participants.

Advisor moves: RIA Farther hails Q2 recruiting record, Raymond James nabs $300M team from Edward Jones
Advisor moves: RIA Farther hails Q2 recruiting record, Raymond James nabs $300M team from Edward Jones

With its asset pipeline bursting past $13 billion, Farther is looking to build more momentum with three new managing directors.

Insured Retirement Institute urges Labor Department to retain annuity safe harbor
Insured Retirement Institute urges Labor Department to retain annuity safe harbor

A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.

LPL Financial sticking to its guns with retaining 90% of Commonwealth's financial advisors
LPL Financial sticking to its guns with retaining 90% of Commonwealth's financial advisors

"We continue to feel confident about our ability to capture 90%," LPL CEO Rich Steinmeier told analysts during the firm's 2nd quarter earnings call.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.