Posts Tagged ‘LPL Financial’

LPL Ordered to Pay $2.5 Million for Non-Traded REIT Sales

February 28th, 2013

Daniel Carlson is a securities litigation attorney in San Diego who specializes in recovering investment losses for his clients.

English: Seal of the Commonwealth of Massachusetts

English: Seal of the Commonwealth of Massachusetts (Photo credit: Wikipedia)

In late December of last year, securities regulators for the Commonwealth of Massachusetts filed an administrative lawsuit accusing LPL Financial, LLC of violating securities laws in regards to their sale of non-traded REITs (Real Estate Investment Trusts). After an investigation of 587 transactions valued at $28 million dollars, agents found that LPL violated prospectus requirements in 569 of those transactions. The lawsuit demanded that LPL make full restitution to all Massachusetts investors who invested in the non-traded REITs.
On February 6th, 2013, the lawsuit settled when Massachusetts’ regulators ordered LPL Financial to pay up to $2 million dollars to investors and another $500,000 in fines. Massachusetts residents will be allowed to surrender their non-traded REIT’s back to LPL at the investors’ original purchase price, which was around $10 dollars a share.
REITs investments vary, many invest in commercial real estate such as strip malls and hotels. They are often promoted to investors with the sales pitch that the properties will increase in value. Of course, this may or may not happen. Many REITs are publicly traded, meaning that an investor can easily sell the interest if the investor needs to for any reason. A large problem for many investors with non-traded REIT’s, which do not trade on securities exchanges, is that they can be very difficult to sell and get out of. In addition, investors can continue being forced to contribute to the non-traded REIT for things like maintenance and repairs, depending on the language of the individual investment agreement. There are many non-traded REITs who stopped distributions long ago and left investors holding an interest that has little value as malls and hotels closed.
Not surprisingly, non-traded REIT’s generate higher fees and commissions for brokers. This can act as an incentive to unscrupulous agents to sell them to unsuspecting investors, especially seniors.
TIME IS OF THE ESSENCE
While the above action only applies to residents of Massachusetts, LPL sold the non-traded REITs nationwide. Residents of other states, including California, would be well advised to seek legal consultation on their non-traded REITs sold by LPL and other advisors. Since many of the LPL REITs were sold beginning in 2006, it is important to pursue your claim as soon as possible. .
If you think that you have been the victim of investment fraud in regards to non-traded REITs sold by LPL or other companies, contact Daniel Carlson at the Carlson Law Firm today for a free consultation at 619-544-9300.

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FINRA Fines Firms for Failing to Deliver Prospectuses

January 21st, 2013
Logo

Logo (Photo credit: Wikipedia)

On January 2, the Financial Industry Regulatory Authority announced fines totaling over $700,000  against five companies for failure in delivering prospectuses for mutual funds to clients.  The FINRA fines were implemented against LPL Financial, State Farm Management Corp., Scottrade Inc., T. Rowe Price Investment Services, Inc., and Deutsche Bank Securities, Inc.

By law, securities companies are required to deliver prospectuses to their clients so that the clients have an opportunity to review the investment portfolios and past performances of the funds.

The sanctions are the result of a FINRA review period from January 2009 through June 2011. LPL, who over that time period was required to deliver 3.4 million prospectuses to clients, blamed the problem on its brokers but admitted that there were no procedures in place to make sure the documents had been delivered.

FINRA alleged that State Farm, who was responsible for delivering 154,129 prospectuses, also failed due to inadequate supervision of its brokers.

As is the norm in these types of settlements, none of the firms involved admitted guilt in any of FINRA findings.  Of the five firms involved, only LPL released a statement.  Spokesman Betsy Weinberger said that LPL has instituted an automatic prospectus delivery program which she claims would assure that prospectuses are delivered in a timely manner.  None of the other firms released a statement.

At the Carlson Law Firm, we have experienced investment recovery lawyers to help investors when they have been harmed by the deceptive practices of the securities industry.  If you believe you have suffered financial losses through negligence or willful misconduct, contact us online or call (619) 544-9300.

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Linsco Private Ledger Found Liable for Failure to Supervise in Stockbroker Malpractice

May 10th, 2012

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).

WASHINGTON, DC - MARCH 02: Mickey Rooney testi...

WASHINGTON, DC – MARCH 02: Mickey Rooney testifies during the Justice For All: Ending Elder Abuse, Neglect & Financial Exploitation hearing at the Senate Dirksen Building on March 2, 2011 in Washington, DC. (Image credit: Getty Images via @daylife)

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.

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