Massachusetts has imposed a $1.1 million fine on LPL Financial over the firm’s failure to properly register advisors and to file reportable events in a timely manner.
LPL agreed to the fine as part of a consent order on Wednesday that also requires the company to undertake a review of its policies and procedures, according to state regulators.
Over the past six years, LPL allowed 651 brokers who were not registered in Massachusetts to work with investors in the state in violation of state securities laws, according to the consent order.
In addition, LPL failed to file timely notice of nearly 800 reportable events, including customer complaints, criminal events, regulatory actions, bankruptcies, judgments and liens, according to the consent order.
“LPL’s failure to seek initial registration of these agents in Massachusetts, or maintain their registration in Massachusetts, prevented the division from reviewing the agents’ qualifications and disclosure histories in its effort to protect Massachusetts investors,” the consent order stated.
“This is not the first time that we have had dealings with LPL, and I think that this case serves as an example that my Securities Division will continue to closely monitor those who have been found to be conducting securities business in Massachusetts without being registered,” Masachusettts Secretary of State William F. Galvin said in a statement.
LPL, the largest independent broker-dealer in the nation, was also the subject of a $26 million nationwide settlement a year ago as the result of an investigation by a North American Securities Administrators Association (NASAA) taskforce led by Galvin. NASAA’s investigation found that LPL had been negligent in supervising its advisors and preventing the sale of unregistered securities to its customers over a 12-year period.
An LPL spokeswoman did not immediately respond to a request for comment.