LPL Financial Hit With $9 Million Fine by Securities Regulator

On May 21, 2013, the Financial Regulatory Authority (FINRA) announced a record $9 million dollar fine has been assessed against LPL Financial significant failures in its email system which prevented access to hundreds of millions of emails.

FINRA provided the following examples of email failures:

  • Over a four-year period, LPL failed to supervise 28 million
    “doing business as” (DBA) emails sent and received by thousands of representatives who were operating as independent contractors.
  • LPL failed to maintain access to hundreds of millions of emails during a transition to a less expensive email archive, and 80 million of those emails became corrupted.
  • For seven years, LPL failed to keep and review 3.5 million Bloomberg messages.
  • LPL failed to archive emails sent to customers through third-party email-based advertising platforms.

To make matters worse LPL made material misstatements to FINRA during the investigation of the email problem. FINRA found that LPL likely failed to provide emails  to certain arbitration claimants and private litigants and is required to notify eligible claimants and deposit $1.5 million of the fine in a fund to pay customer claimants for its potential discovery failures.

Rex Securities Law has been investigating the sales practices of LPL Financial, including its sale of non-traded REITs to investors, for more than a year and currently is representing a number of LPL clients who are seeking recovery of investment losses. If you have questions about losses in your LPL Financial account, contact us for more information.

Rex Securities Law , located in Boca Raton, FL, provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Rex Securities Law

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