LPL Financial Sanctioned In Connection With Sale of Non-Traded REITs, Other Alternative Investments
LPL Financial LLC was recently sanctioned by securities regulators. LPL Financial failed to implement an adequate supervisory system for the sale of alternative investments and also failed to have compliance or written supervisory procedures that were reasonably designed to achieve compliance with regulatory rules and state suitability requirements, according to the Financial Industry Regulatory Authority (FINRA).
LPL Financial failed to have a reasonable supervisory system and procedures to identify and determined whether purchases of alternative investments caused a customer’s account to be unsuitably concentrated in alternative investments in violation of LPL Financial prospectus or certain state suitability standards, according to FINRA. Alternative investments include non-traded real estate investment trusts (“REITs”), oil and gas partnerships, business development companies (“BDCs”), equipment leasing programs, real estate limited partnerships, hedge funds, managed futures and any other illiquid pass-through investments.
LPL Financial’s written supervisory procedures did not precisely describe the supervisory steps to be taken with respect to alternative investment transaction reviews and failed to offer any guidance to LPL Financial’s registered representatives or reviewing principals regarding analyzing the state suitability standards for certain Alternative Investments such as REITs, BDCs, and managed futures, according to FINRA.
LPL Financial consented to being censured and fined $950,000 without deny or admitting FINRA’s factual findings.
The Peiffer Wolf securities attorneys often represent investors who lose money as a result of Ponzi schemes, investment fraud, or stockbroker misconduct. They are currently investigating the possibility of assisting victims with the recovery of their losses. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.
Investors who believe they may have lost money invested in alternative investment products such as REITs, oil and gas partnerships, BDCs, equipment leasing programs, real estate limited partnerships, hedge funds, managed futures and any other illiquid pass-through investments may contact the securities lawyers at Peiffer Wolf, Jason Kane or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at 585-310-5140.