LPL Financial will pay up to $26 million to settle charges that its representatives sold unregistered securities to clients over the past 12 years.

LPL agreed to the settlement after an investigation by the North American Securities Administrators Association (NASAA) found that its customers were sold unregistered and non-exempt securities since October 2006, according to an announcement from the office of Massachusetts Secretary of Commonwealth William Galvin.

“The action today represents the states at their best–working together on an extremely important investor protection matter. Because of the states’ combined efforts, thousands of investors will benefit and be given the right to have their money returned plus interest,” said Galvin in comments released on Wednesday.

“This investigation is representative of the aggressive and coordinated enforcement actions of state securities regulators and demonstrates the important investor protection role states serve in safeguarding investors nationwide,” said Joseph P. Borg, director of the Alabama Securities Commission and president of NASAA.

A NASAA task force led by regulators in Alabama and Massachusetts found that LPL “was negligent in its duty to supervise” employees and halt the sales of unregistered securities to its customers.

Through separate administrative orders in the coming months, LPL will agree to pay a fine of $499,000 to each of the 52 U.S. states and territories, totaling $26 million if all decide to participate in the settlements. As of Wednesday morning, the state of California had not agreed to participate in the settlement, according to the announcement.

As part of the settlement, LPL agreed to work with a third-party reviewer to analyze transactions dating back to October 2006. The company also offered to repurchase the unregistered and non-exempt securities at the full amount paid plus three percent interest, or pay damages for the purchases of those securities as required by state regulators. Investors would be able to choose whether to accept the restitution or to continue holding the security.

“We take our compliance and risk management obligations seriously and will continue to dedicate resources to this important work moving forward,” said LPL in a statement released Wednesday. “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. Our focus now is on offering remediation to investors who may have been affected.”

The transactions uncovered by NASAA comprised a small part of the company’s business, said an LPL representative who requested anonymity.