According to the Texas State Securities Board, LPL Financial (LPLA) will pay a $450K fine and buy back unregistered securities. The Consent Order noted that the settlement is part of the wider $26M one reached between the brokerage firm and state securities regulators in 2018.
In its deal with Texas, LPL agreed to buy back unregistered securities that it sold to investors in the state going as far back as Oct 1, 2006. LPL will pay “3% interest per year on the value of the securities either in damages if they were sold or by repurchasing the investments.” Similar terms were part of the wider agreement offered to all US states and territories regarding how to compensate investors who were sold unregistered stocks and fixed-income securities.
In January, Maryland Attorney General Brian Frosh announced his state’s settlement with LPL, which involved buying back these same types of securities, along with 3% simple interest annually, from investors. Aside from its restitution and rescission offers to Maryland investors, the brokerage firm agreed to pay a $499K civil penalty.
According to the North American Securities Administrators Association (NASAA), in the multi-state probe, regulators found that LPL acted negligently by not properly supervising brokers and failing to stop the sale of unregistered securities to customers. Also at issue was the brokerage firm’s use and cancellation of specific third-party services that were key to the firm’s being in compliance with the various registration requirements of the different state regulators. The multi-state probe noted numerous findings, including that:
- LPL Financial offered unregistered, non-exempt securities and sold them to investors.
- Did not reasonably supervise information flow to ensure proper compliance with the various state securities regulators.
- Did not keep the required records and books to ensure this compliance.
- Did not perform the proper and needed due diligence having to do with third-party services, which is part of being in compliance.
Our broker-dealer fraud attorneys and broker fraud lawyers work with investors throughout the US. Please contact Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) if you believe that your investment losses are due to fraud, negligence, inadequate supervision, or another matter.
FINRA Bars Ex-LPL Broker Who May Have Taken Loans From Clients
In an unrelated case, The Financial Industry Regulatory Authority (FINRA) is barring James Bylenga, an ex-LPL broker, after he neglected to participate in the self-regulatory authority’s probe into allegations of misconduct. LPL fired Bylenga last year over concerns related to his “advisory fee structure.” One month after letting him go from the brokerage-firm, LPL reported that it had started up an internal investigation to see whether Bylenga’s clients had lent him money while he was associated with the broker-dealer.
With 38 years in the broker industry, Bylenga was also previously registered with Comerica Securities, Robert W. Baird, Citigroup Global Markets (C), Lehman Brothers, and Centennial Securities. In one civil claim, in which Bylenga was accused by customers of inappropriately receiving their money as loans, a settlement was reached for $210K.
Contact our LPL broker fraud lawyers at SSEK Law Firm today to request your free, no obligation, case consultation if James Bylenga or another LPL broker handled your investments and you sustained losses that you suspect may be due to fraud or negligence.
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