LPL Financial LLC must pay a total of $9 million for significant email system failures and making misstatements to Wall Street’s watchdog, the regulator said on Tuesday.
LPL, an affiliate of LPL Financial Holdings Inc., agreed to a fine of $7.5 million and will establish a $1.5 million fund to compensate brokerage customers potentially affected by email violations, according to a settlement with the Financial Industry Regulatory Authority. The firm neither admitted nor denied FINRA’s charges, according to the settlement.
Securities industry rules require brokerages to store and review emails for a certain period to ensure compliance with procedures and prevent potential wrongdoing.
An LPL spokesman was not immediately able to comment.
LPL disclosed to shareholders in April that it was discussing a settlement with FINRA related to email violations.
The settlement coincides with an overhaul of compliance procedures at LPL following a flurry of regulatory complaints about sales abuses. They include LPL’s $2.5 million settlement with Massachusetts’ securities regulator for failing to supervise brokers who sold investments in non-traded real estate investment trusts.
Topics Agencies
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