LPL to Pay $499K to Texas for Unregistered Securities Sales
LPL Financial has agreed to pay the state of Texas $499,000 to settle allegations of “long-standing and widespread regulatory failures” tied to the sale of unregistered securities, the state said on Thursday.
The payment is related to a $26 million settlement that LPL Financial, the largest independent brokerage firm with over 16,000 brokers, reached with state securities regulators last year. LPL agreed to pay Texas a fine of $450,000 and to contribute $49,000 to an investor education fund run by the state.
“I am pleased with the robust and meaningful recovery to Texas investors and appreciate LPL’s work with regulators to achieve this outcome,” Texas Securities Commissioner Tavis J. Iles said in a prepared statement.
Under the terms of the broader settlement with 52 states and U.S. territories, LPL agreed to offer to repurchase certain unregistered stocks and fixed-income securities sold since October 1, 2006, at the sales price plus 3% interest. The states accused LPL of failing to invest in personnel and technology to properly detect and monitor sales of its brokers, who are independent contractors with the firm.
LPL also agreed to fully review its compliance systems as part of the settlement.