Massachusetts securities regulators imposed a $1.1 million fine on LPL Financial due to the independent broker-dealer’s failure to properly register 651 “agents” in the Bay State over the past six years and to file 800 “reportable events” in a timely manner.
These events included client complaints, criminal events, regulatory actions, bankruptcies, and judgments or liens, according to Secretary of State William F. Galvin, the state’s top securities regulator.
LPL agreed to the consent order Tuesday, which requires it to conduct a “thorough review” of its policies and procedures.
“This is not the first time that we have had dealings with LPL, and … this case serves as an example that my Securities Division will continue to closely monitor those who have been found to be conducting securities business in Massachusetts without being registered,” Galvin said in a statement.
A year ago, an investigation by the North American Securities Administrators Association task force, led by Galvin, found that LPL had been negligent in both its supervision of advisors and in its prevention of the sale of unregistered securities to clients over a 12-year period.
“LPL’s failure to seek initial registration of these agents in Massachusetts, or maintain their registration in Massachusetts, prevented the division from reviewing the agents’ qualifications and disclosure histories in its effort to protect Massachusetts investors,” the consent order states.
Galvin’s office also censured LPL and ordered it to cease and desist violations of state securities laws.
In a statement about the matter, the IBD said it continues to “enhance our controls around timeliness of regulatory reportings and licensing. This is part of our ongoing focus on effective risk management and compliance practices that protect our advisors and their investors.”
Two years ago, the division fined LPL $1 million for its failure to supervise agents at Digital Federal Credit Union.