Former LPL Broker Suspended and Fined $5,000 for Life Insurance Scheme

Former LPL Broker Suspended and Fined $5,000 for Life Insurance Scheme

Scott Klor, a former representative of LPL Financial, was suspended for 14 months and fined $5,000 by the Financial Industry Regulatory Authority, Inc. (FINRA) for a life insurance scheme.

The Allegations

According to the FINRA letter of acceptance, Klor was involved in private securities transactions  encouraging investors to purchase approximately $1.4 million in a variable life insurance policy through a specially-formed limited liability company (LLC). Although Klor was required to disclose this transaction to LPL, he failed to do so.

The Facts of the Case

Investors purchased the life insurance policy at a price that exceeds the surrender value of the policy. The policy was for variable life insurance of a terminally ill elderly person. With Klor’s assistance, the investors formed an LLC and purchased the policy for $1.4 million. Over the years, the investors made payments and contributions to the LLC, and Klor received a 4 percent commission for his participation.

Klor Released from the Securities Firm

However, the amount paid for the policy exceeded the expected death benefit. After the insured passed away, it was revealed that the death benefit was worth less than the invested amount, causing the LLC investors to lose more than $200,000. Klor is no longer associated with the securities firm.

Speak with a Securities Fraud Attorney

Dimond Kaplan & Rothstein, P.A. has vast experience representing investors who have lost money as a result of securities fraud or stockbroker misconduct. We will aggressively pursue claims to recover your losses or damages.

If you are looking for a securities fraud attorney to review your rights and options, the securities fraud lawyers at Dimond Kaplan & Rothstein, P.A. represent individual and institutional investors who have lost money as a result of securities fraud or stockbroker misconduct.

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