Tr?id=566623520170033&ev=PageView&noscript=1

Ä¢¹½´«Ã½

FINRA Fines LPL Over Failure to Detect Harmful Wire Transfers to Clients

Posted on July 31st, 2023 at 1:13 PM
FINRA Fines LPL Over Failure to Detect Harmful Wire Transfers to Clients

From the Desk of Jim Eccleston at Ä¢¹½´«Ã½.

The Financial Industry Regulatory Authority Inc. (FINRA) imposed a $3 million fine on LPL Financial for failing to oversee two financial advisors adequately. Those advisors had misappropriated $2.4 million from 13 clients, predominantly senior citizens.

According to the FINRA settlement, known as an Acceptance, Waiver, and Consent (“AWC”), from May 2018 to August 2020, the advisors "converted” client funds by having them write checks or make wire transfers of funds to various entities they controlled. One advisor used at least $550,000 in client funds to pay his personal and business expenses. The second advisor took almost $1.9 million from clients and used most of it to purchase real estate. 

Additionally, FINRA claimed that LPL failed to have a supervisory system reasonably designed to detect possible instances of signature forgery or falsification. During that period, nearly 50 LPL sales reps electronically signed another person's name on over 1,000 LPL documents, including on documents that were required books and records of the firm. 

According to AdvisorHub, the issue began when LPL informed the self-regulatory authority a few weeks before submitting the necessary industry documentation (a Form U-5) that it had fired one of its financial advisors for misappropriating customer funds.

Ä¢¹½´«Ã½ LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

 

Related Attorneys: James J. Eccleston

Tags: Eccleston, Ä¢¹½´«Ã½, FINRA, LPL

Return to Archive

TESTIMONIALS

Previous
Next
Quotes Bigger

You were most helpful with my FINRA deposition. You are a good lawyer and a good person.

Dan B.

LATEST NEWS AND ARTICLES

1787070589 Law
August 18, 2026
Senior Protection Case Study: Edward Jones and Senior Investor Safeguards

A recent incident involving Edward Jones illustrates how challenging it may be to employ safeguards for protecting older clients from financial exploitation.

1786980584 Law
August 17, 2026
Federal Judge Allows Investor Class Action Over Lightstone REIT Disclosures to Proceed

A federal judge has allowed investors to proceed with a class-action lawsuit alleging that directors and advisors of three Lightstone Value Plus REITs failed to disclose a significant conflict of interest before shareholders voted on amendments extending the funds' operating periods.

1786734880 Law
August 14, 2026
Cash Sweep Litigation Continues to Drive Legal Costs

Cash sweep litigation continues to increase legal costs for wealth management firms despite the Securities and Exchange Commission's (SEC) decision under the Trump administration to close pending investigations without imposing enforcement penalties, according to AdvisorHub.