The New York Attorney General’s Office says LPL Financial will buy back some unregistered securities from investors by November and pay the state a penalty of $499,000.
The development is part of a nationwide agreement that LPL made in May 2018 — totaling about $26 million in civil fines — with the North American Securities Administrators Association in which each of the 52 states and U.S. territories are receiving $499,000.
“When New Yorkers invest with financial firms, they trust those firms to obey the law and act with integrity,” according to Attorney General Letitia James. “LPL failed to meet these standards and was not transparent while making purchases on behalf of its clients.”
The nationwide settlement deal is tied to unregistered securities sold by the independent broker-dealer from October 2006 to May 2018.
It stemmed from investigations in Alabama and Massachusetts regarding the IBD’s “failure to establish and maintain reasonable policies and procedures to prevent the sale of unregistered, nonexempt [equity and fixed income] securities by LPL to its customers,” according to NASAA.
“We take our compliance and risk management obligations seriously and will continue to dedicate resources to this important work moving forward,” LPL said in a statement at the time the NASAA agreement was reached. “We believe these resources, combined with additional expertise we’ve hired in the field of Blue Sky compliance, position us well with respect to this issue in the future.”