New Hampshire securities regulators have filed a $1.2 million enforcement action against LPL Financial over the sale of non-traded REITs.
The New Hampshire Securities Bureau alleges that since 2007, the firm allowed 376 sales of illiquid REITs that violated LPL’s own concentration limits.
The offending sales were worth $17.5 million and generated about $1 million in commissions, the state alleges.
The complaint, filed Monday, asks for rescission or restitution to the affected New Hampshire investors, plus commission disgorgement, a $1 million fine and $200,000 in costs.
LPL, which is contesting the charges, has 30 days to request a hearing.
The firm “regrets that we were unable to reach a mutually agreeable resolution,” said LPL spokesman Brett Weinberg in a statement.
“LPL has dedicated substantial resources to addressing these legacy issues and enhancing our practices around the sale and supervision of alternative investments,” he said.
LPL has been bedeviled by costs incurred in cleaning up past sales of alternatives. A year ago, it settled a similar case with the Financial Industry Regulatory Authority, paying $950,000 for supervisory lapses in the sale of direct investments
In December 2012, LPL paid $2.6 million to settle a Massachusetts case
involving improper sale of nontraded REITs.
Last year, LPL’s top executives saw their bonuses drop, due in part to the adverse impact of regulatory charges.