Indiana Secretary of State Connie Lawson has agreed to a settlement of $450,000 with LPL Financial LLC, the nation’s largest independent broker-dealer. The settlement specifically focuses on email review and branch audit requirements.
Over the past several years, a software glitch caused LPL supervisors to not properly review a select number of emails. When the Secretary of State’s office uncovered the glitch, LPL was contacted, and the glitch was corrected. The investigation also found that LPL did not conduct annual compliance exams of its Indiana branches as required by law.
“Broker-dealers and financial firms are often the first line of defense against fraud,” said Secretary Lawson. “If a firm does not have, or does not follow its own supervisory procedures, Hoosiers could be at risk.”
In addition to the $450,000 civil penalty, LPL agreed to a conduct a third party compliance review of its policies and procedures in Indiana to ensure that they comply with Indiana law. LPL will provide a report to the Securities Commissioner in 180 days for review.
LPL Financial provides service to approximately $681 billion in brokerage and advisory assets as of the third quarter of 2018. The company provides proprietary technology, comprehensive clearing services, practice management programs and training, and independent research to more than 16,000 financial advisors and 700 financial institutions.