Oregon’s Division of Financial and Corporate Securities (DFCS) found LPL Financial liable for failure to supervise. Specifically, the firm failed to adequately oversee one of its financial analysts, an unscrupulous broker who committed financial elder abuse, pushing high-risk investments to elderly clients (and those mentally incompetent to make investment choices).
Elder Financial Abuse
Jack Kleck, formerly a branch manager for LPL Financial’s La Grande, Oregon office, was found guilty of selling risky gas and oil partnerships to 30+ clients, the majority of them over 70 and in poor health. The investments were inappropriate to the clients’ financial goals—definitely not the safe investments Kleck characterized them as.
Charges & Penalties
For not adequately overseeing the actions of Kleck, for failing to implement its own oversight procedures and company policies, and for other violations of securities laws, LPL was fined $100,000 by the Oregon DFCS.
The penalty for Kleck? A fine of $30,000—and he can no longer practice as a stockbroker in Oregon.
LPL & Stockbroker Malpractice
Since the investigation, LPL Financial claims it has beefed up its oversight policies and procedures, is increasing the number of employees who review sales transactions, has administered tougher exams at their branch offices, and is implementing other practices to improve compliance with the law.
Help for Victims of Elder Financial Abuse
Elderly investors are often the victims of financial elder abuse similar to what happened at LPL. Specific laws exist to protect the elderly from this type of abuse, and those laws provide for treble or multiple damages as well as attorney fees. States throughout the nation are examining financial firms and their brokers to ensure that they are dealing with elderly clients in an appropriate manner. Meanwhile, it is imperative that elderly investors be extremely careful when they do business with financial advisors, brokers and brokerage firms.
If you think that you’ve been the victim of financial elder abuse, contact a securities fraud lawyer at Carlson Law immediately for a free consultation 619-544-9300.