Broker Theft Attorney

When Failure To Supervise Enables Broker Theft 

LPL Financial Fined $3M After Its Financial Advisors Steal From 13 Customers

If your broker-dealer failed to identify and investigate red flags indicating possible misconduct or fraud by your financial advisor you may be able to hold them liable for your investment losses. Recently, the Financial Industry Regulatory Authority (FINRA) fined LPL Financial $3M after finding that the firm allegedly failed to properly supervise its registered representatives, which placed customers at risk of suffering serious investment losses. This included its purported failure to stop two of its brokers from misappropriating $2.4M from 13 clients, most of whom were senior investors.

According to FINRA, two brokers “converted” money from these clients by having them make wire transfers or write checks to different entities that the financial advisors controlled. These registered representatives engaged in the purported broker theft separately, with one of them using up to $55K in client funds for his own use while the other stole nearly $1.9M from LPL clients to primarily purchase real estate. Not only that but also during the period at issue—May 2018 to August 2020—more than four dozen LPL sales representatives are accused of electronically signing another’s name on over 1000 firm documents.

FINRA found that LPL lacked a “reasonably designed” supervisor system that could have identified the red flags indicating forgery or falsification was going on. The broker-dealer settled without agreeing to or denying the self-regulatory organization’s (SRO’s) findings.

How Can Our Seasoned Broker Theft Attorney Team Help?

Shepherd Smith Edwards and Kantas (investorlawyers.com) are offering free, no-obligation case consultations to investors that may have been financially harmed because of the alleged broker misconduct of an LPL Financial registered representative or any other financial advisor. For over 30 years, we have pursued damages against broker-dealers that neglected to properly supervise their employees or failed to identify or act on red flags indicating something was amiss in clients’ accounts.

Some other examples of broker-dealer failure to supervise include: 

• Not properly screening the broker before hiring them.
• Hiring the financial advisor anyway even though they have a history of investor complaints or regulatory violations.
• Failing to properly train their registered representative.
• Neglecting to implement a reasonable supervisory system that would have allowed the firm to properly oversee their brokers’ activities involving customers and identify red flags.

With over 26,000 financial advisors and registered representatives, LPL is the largest independent brokerage firm in the US. It also has 246 disclosures on record.

This FINRA case is not the first time that the broker-dealer has been accused of failure to supervise. As a matter of fact, our skilled broker-dealer negligence attorneys have sued LPL before after supervisory deficiencies allegedly played a part in causing customers to lose money.

Should we decide to work together, our knowledgeable Broker Theft Attorney Teams have the experience and resources to provide you with zealous, quality securities law representation. Over the years, we have successfully fought for the financial recovery of many of our clients in arbitration, mediation, and litigation.

Call our Broker Theft Attorney Team at (800) 259-9010 today.