Practice Management
Finra fines LPL $6m over supervisory violations
Andrew Foerch / Jan 03, 2024
Finra has dinged the independent broker-dealer giant for failing to adequately supervise transactions made by its brokers.
LPL Financial agreed to pay more than $6m in fines and restitution last week to settle claims brought by the Financial Industry Regulatory Authority (Finra) that the firm didn’t supervise hundreds of thousands of transactions and recommendations made by its brokers.
Between January 2012 and August 2019, Finra said, the independent broker-dealer giant failed to report more than 830,000 direct transactions on a trade blotter that LPL used to generate exception reports and identify potential sales practice violations, including trades that didn’t meet regulatory suitability standards.
LPL routinely received commission records from product sponsors and therefore knew when its brokers did not manually report a transaction onto the blotter, Finra said. When it learned of such a situation, the company would alert the representative, and if a transaction remained unreported for 30 days or more, it would fine the representative $5 per transaction per month. During a six-month stretch in 2017, LPL...
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