|By NATHANIEL POPPER|
A relatively little-known brokerage firm that has grown into one of the nation’s largest has been fined again for failing to supervise its brokers properly.
Two years earlier, LPL paid
A front-page article in The New York Times in 2013 reported that LPL had faced an unusual number of penalties from state and federal regulators for allowing its brokers to sell complicated products to unsophisticated investors.
Since then, LPL has made a big public push to emphasize its efforts to improve its systems. But the new Finra penalty, which includes infractions in 2014 and 2015, suggests that the firm has not been moving fast enough.
“The breadth of the number of systems involved is what sets this apart from other cases,” said
In a statement, LPL said that the fines resolved “a series of regulatory issues we have already remedied, or are in the midst of working to remedy, as part of the settlement and our ongoing commitment to enhance our business controls.”
“The substantial and ongoing investments made by LPL in our legal, risk management, compliance and other control functions reflect that this is a top priority for the company,” the statement added.
LPL has sold itself to brokers as a place that provides more freedom and fewer overhead costs than large brokerage firms like
But some state regulators have found that LPL’s structure has made it easier for brokers to sell clients complex financial products like nontraded real estate investment trusts and variable annuity contracts. These types of products generally generate larger commissions for both the brokers and LPL than lower-cost mutual funds.
The Finra document detailing the problems at the firm said that brokers allowed customers to hold those financial products and others, such as nontraditional exchange-traded funds, in risky ways that violated the limits typically placed on such products.
|Copyright:||Copyright 2015 The New York Times Company|
|Source:||New York Times Digital|