LPL Financial Fined for DCU Financial Broker Supervision
Massachusetts brokerage firm LPL Financial LLC has agreed to pay a $1 million fine for failing to properly supervise its brokers who worked out of Digital Federal Credit Union branches. Massachusetts securities regulators accused the LPL brokers of misleading customers and accepting bonuses from the DCU Financial credit union during sales contests. This is just the latest in LPL’s long and repeated history of regulatory trouble.
Understanding the LPL DCU Financial Connection
In exchange for allowing LPL brokers to work from the credit union branch offices, the credit union took a cut of each of the sales. The credit union paid annual commissions and held several securities sales drives and paid bonuses to the LPL brokers on the increased sales.
LPL brokers who worked from the DCU Financial branch offices used a “doing business name” – DCU Financial. Their business cards did not properly disclaim that the LPL brokers were not affiliated with the credit union. Moreover, according to the regulators, an LPL broker told investigators who acted as “mystery shoppers” that they worked for the credit union and did not work on commission.
Specifically, Massachusetts regulators said that the LPL broker told mystery shoppers that he was “a bank employee receiving a salary,” that he was “not incentivized by fees and commissions and therefore [would] provide investment services to [customers] in [the customers’] best interest.” According to the securities regulator, when the mystery shoppers directly asked the broker if he worked for LPL, the broker said, “[he] was an employee of DCU not LPL.” Of course, Massachusetts regulators asserted that the broker had not been truthful.
As part of the settlement, LPL also is required to review its procedures, policies, and training in connection with its arrangement with the credit union.
Did you invest with LPL Financial or DCU Financial?
If you lost money in your LPL brokerage account or in your dealings with DCU Financial, you may have valid claims to recover your investment losses.
Call a Securities Fraud Attorney Today
If you believe you have been the victim of investment fraud orhave questions about a securities issue, contact a qualified securities fraud attorney today.
With offices in Miami, West Palm Beach, New York and California, our attorneys have recovered over $100 million from banks and brokerages firms for their wrongful actions.