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FINRA Fines, Suspends LPL Veteran Broker for Falsified Signatures

FINRA Fines, Suspends LPL Veteran Broker for Falsified Signatures. FINRA, disciplinary, LPL, broker-dealer, regulatory, financial services

The Financial Industry Regulatory Authority fined and suspended a 46-year financial industry veteran in Braintree, Mass., over falsifying signatures, according to a recent letter of acceptance, waiver, and consent.

According to external reporting, the enforcement action marks at least the 12th case that the regulator has brought against former LPL brokers over falsified signatures since July when LPL itself paid a $3 million fine for failing to capture signature falsifications among other allegations.

In this case, Timothy W. Leveroni agreed to a $7,500 fine and two-month suspension to settle allegations that from May 2020 to March 2021, he allowed other LPL brokers to sign his name on more than 100 documents. The colleagues signed Leveroni’s name on client documents where he was the broker of record, including new account applications and account update forms.

Although none of the customers complained, according to the letter, these actions violated FINRA’s Rule 2010 requiring “high standards” and its books-and-records requirements under Rule 4511.

FINRA’s settlement noted that LPL had meted out its own internal discipline, a $1,000 fine and a letter of caution for Leveroni. Leveroni, who joined LPL in 2003 from Mutual Service Corporation, remains with the independent broker-dealer, according to BrokerCheck.

Leveroni neither admitted nor denied its finding, FINRA said in the letter.

In 2022, according to external reporting, LPL terminated a swath of brokers over allegations related to their use of electronic signatures on DocuSign. Specifically, FINRA said that LPL failed from January 2018 to January 2022 to detect instances of signature forgery or falsification. At least 50 LPL brokers were able to electronically sign a customer’s name on over 1,000 documents, including account transfer and money movement forms, FINRA said. In August 2023, two ex-LPL financial advisers were fined and suspended for forging or falsifying signatures on more than 216 account documents.

More recently in December 2023, according to previous DI Wire reporting, FINRA fined LPL $5.5 million for both failing to supervise direct business transactions and maintaining inaccurate records. According to FINRA:

  • From January 2012 to August 2019, LPL violated several FINRA rules when it did not take the necessary action to ensure that its representatives reported direct business transactions on the company’s trade blotter used to identify potential sales practice violations. Because of this, FINRA claimed that approximately 830,000 such transactions did not appear on the blotter;
  • From February 2016 through June 2020, LPL sent customers approximately 11,300 switch letters containing inaccurate information regarding the charges customers incurred when switching from one security to another; and
  • From May 2017 to November 2022, FINRA reported that LPL failed to establish, maintain, and enforce a supervisory system, including written procedures, reasonably designed to ensure that recommendations of publicly traded securities of business development companies complied with certain FINRA rules and Regulation Best Interest’s (Reg BI) Care Obligation.

 

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