LPL Financial reaches $499,000 settlement with New Jersey authorities over sale of unregistered securities

Maria Nikolova

The settlement follows an investigation regarding the failure by LPL to establish reasonable policies to prevent the sale of unregistered, non-exempt securities to its customers between October 1, 2006 and May 1, 2018.

Attorney General Gurbir S. Grewal and the New Jersey Bureau of Securities within the Division of Consumer Affairs announced today that the brokerage firm LPL Financial agreed to pay the Bureau a $499,000 penalty to resolve violations that LPL offered and sold unregistered securities, and failed to have in place adequate policies and procedures to prevent those sales.

Under the settlement, LPL has also agreed to offer repurchases on unregistered securities it sold in New Jersey during that time.

The North American Securities Administrators Association (NASAA), of which the Bureau is a member, established a task force to investigate LPL’s failure to establish and maintain reasonable policies and procedures to prevent the sale of unregistered, non-exempt securities by LPL to its customers. Whereas the investigation has not found any evidence of willful, reckless or fraudulent conduct by LPL, the NASAA task force found that LPL failed to maintain adequate systems to reasonably supervise agents, staff and employees to prevent the sale of unregistered, non-exempt securities.

State investigators also determined that LPL failed to maintain books and records necessary to ensure full and proper compliance with state securities registration requirements.

Furthermore, investigators found that LPL failed to conduct necessary due diligence regarding the retention, use and subsequent cancelation of certain third-party services critical for compliance with state securities registration requirements.

Under terms of the settlement, LPL has agreed to enhance its processes and supervisory systems to prevent future sales of unregistered securities. The firm will also extend repurchase offers on any solicited orders of equity or fixed income securities sales in New Jersey between October 1, 2006 and May 1, 2018 that are determined to have been unregistered and non-exempt.

Under the settlement, repurchase offers will be made at the original purchase price plus three percent interest per year. LPL is expected to make repurchase offers to eligible consumers by or before November 2019.

  • Read this next

    Fintech

    Nubank makes impressive turnaround, posting $1 billion profit in 2023

    Brazil’s Nubank has made a remarkable turnaround, swinging from a net loss in 2022 to a $1 billion net profit in 2023. The digital bank’s revenues have soared past $8 billion, marking a major milestone in its financial performance.

    Retail FX

    Spanish watchdog warns of UP MARKETS, BITBINX

    The Comision Nacional del Mercado de Valores (CNMV), the financial regulatory body of Spain, announced in a statement that it has added to its warning list new website that are illegally offering financial services to Spanish citizens.

    Digital Assets

    MicroStrategy buys 3,000 more bitcoins, suffers phishing attack

    MicroStrategy, the largest corporate investor in bitcoin, has expanded its cryptocurrency portfolio by buying an additional 3,000 bitcoins for $155 million.

    Crypto Insider

    Saudi Launches World’s First Cultural Metaverse

    The Saudi Ministry of Culture, droppGroup, and Oracle have joined forces to launch the Cultural Universe, the world’s first government-operated national Metaverse initiative.

    Retail FX

    eToro revives IPO plans after failed $10B SPAC merger

    Israeli social trading network eToro is actively exploring options for a public market listing, according to CEO Yoni Assia in an exclusive interview with CNBC.

    Digital Assets

    Meme Coin Communities Gear Up for the CoinMarketCap Crypto Awards

    CoinMarketCap’s Crypto Awards 2024, the first edition of a new annual event, is captivating the global crypto community. This is especially true for the Meme Coin Of The Year category, where voting has become a battleground for the most passionate and vibrant communities in the crypto space.

    Digital Assets

    Sui Recognized as 2024 Blockchain Solution of the Year at AIBC Eurasia Awards

    The Layer-1 Received the Top Honor at the Eurasia Awards While Experiencing a Period of Unprecedented Growth and Recognition

    Crypto Insider

    Vitalik Buterin, Sandeep Nailwal Lead Decentralized AGI Summit, Address Centralized AI Risks at ETHDenver

    Sentient and Symbolic Capital’s Decentralized AGI Summit will feature leading Decentralized AI authorities like Vitalik Buterin and Sandeep Nailwal.

    Digital Assets

    Aethir Unveils Its First Decentralized AI Node Sale

    Aethir, a leader in decentralized GPU cloud infrastructure, has announced its highly anticipated Node Sale.

    <