Brokerage Firm Fined $9M for Email Violations, Misstatements

By | May 21, 2013

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.

Was this article valuable?

Here are more articles you may enjoy.