LPL Fined Over Brokered CDs Sales
Finra has censured and fined LPL Financial $375,000 over alleged lapses in its supervision of the sale of certain brokered certificates of deposits, the industry’s self-regulator says in a letter of acceptance, waiver and consent.
From 2010 through at least 2016, the firm allegedly failed to ensure its reps were sufficiently trained about the features and risks of brokered CDs and that its clients received adequate disclosures on the features and risks of the product, Finra says.
LPL allegedly sold $533 million worth of brokered CDs during that time, generating more than $1.6 million in revenue, the regulator says. As a result of the alleged supervisory failures, one LPL rep made material misrepresentations about how the product could be redeemed to five elderly clients, according to the letter.
The five clients or their estates were not able to fully redeem the CDs and lost around $75,000 when they had to sell them on the secondary market, Finra alleges. LPL subsequently covered the clients’ losses, according to the regulator.