LPL Financial LLC has agreed to pay a $5.5 million fine as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).
From January 2012 to August 2019, LPL failed to reasonably supervise transactions that the firm’s registered representatives placed directly with product sponsors on behalf of firm customers (i.e., direct business transactions) in violation of NASD Rule 3010 and FINRA Rules 3110 and 2010.
LPL did not take steps reasonably designed to ensure that its representatives reported such transactions on the trade blotter the firm used to identify potential sales practice violations, resulting in approximately 830,000 such transactions not appearing on the blotter. The firm did not supervise these transactions since it did not generate exception reports from these transactions to identify potential sales practice violations, including potentially…
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