May 05, 2017
Settlement is Result of Nationwide NASAA Investigation
Michael S. Pieciak, commissioner of the Department of Financial Regulation (DFR), announced a settlement today in which LPL Financial (LPL) will reimburse $460,000 to eight Vermont investors and has paid the state a penalty of about $11,000. The settlement was the result of a multi-state investigation conducted by the North American Securities Administrators Association (NASAA).
The investigation revealed that LPL agents did not comply with certain standards when selling non-traded real estate investment trusts (REIT) between January 2008 and December 2013. Specifically, the investigation found LPL agents often failed to adequately consider an investor's net worth and income in determining the suitability of the REIT investment. LPL also failed to provide adequate supervision over its agents as this conduct was contrary its own policies.
Pieciak said non-traded REITs can be a risky investment and often difficult to liquidate.
"Non-traded REITs do not have an active secondary market, which can put investors in a bind if they need immediate access to their money," he said. "accordingly, these investments are only appropriate for certain individuals."
"This investigation has been ongoing for several years and the settlement with Vermont is good news for our investors," Pieciak said, "It is also a great example of how NASAA coordinates the efforts of all state regulators to protect investors."
The restitution to Vermonters ranges from $14,000 to $200,000. More than 2,000 investors were affected nationwide.
LPL Financial, founded in 1989 by the merger of brokerage firms Linsco and Private Ledger, is headquartered in Boston and employs more than 14,000 financial advisors throughout the U.S.
Media Contact: Dale Schaft, Information Management Officer, 802-828-4872
Source: Department of Financial Regulation
Last Updated at: May 05, 2017 15:19:50