SEC Charges Broker-Dealer and Two Senior Executives over Unauthorized Securities Transactions

The Securities and Exchange Commission has charged broker-dealer Alpine Securities Corporation, its former chief executive officer Christopher Doubek, and its current chief operations officer Joseph Walsh with engaging in a series of unauthorized securities transactions.

According to the SEC’s complaint, in May and June 2019, Alpine reportedly “seized” its retail customers’ securities without authorization or notice in an improper attempt to force customers to close their brokerage accounts. The unauthorized transactions were orchestrated by Doubek and Walsh, the regulator said.

Specifically, Doubek and Walsh allegedly caused Alpine to sell approximately $268,000 in customer securities without notice or customer approval on the basis that Alpine deemed securities valued $400 to $1500 as “worthless.”

The complaint also alleges that without authorization, the two executives caused Alpine to declare 545 customer accounts “abandoned” and transferred approximately $54 million worth of securities out of these accounts and into accounts that Alpine controlled.

Alpine eventually returned these securities to its customers, but not until it received numerous customer complaints and inquiries from the Financial Industry Regulatory Authority, the SEC alleges.

The SEC’s complaint charges Alpine, Doubek, and Walsh with violating the antifraud provisions of various federal securities laws and seeks injunctive relief, a penny stock bar, and civil penalties.

Headquartered in Salt Lake City, Alpine Securities Corporation has been registered with the SEC since 1984.

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LPL Financial Hires EVP of Corporate Strategy and New Ventures

LPL Financial LLC, the nation’s largest independent broker-dealer, has hired Katelyn Shackleton as executive vice president of corporate strategy and new ventures. In her role, she will lead LPL’s strategic planning while leveraging innovation to accelerate firm growth and benefit advisors and clients.

Shackleton has more than 20 years of experience in strategic planning, policy and risk management, process reengineering and employee engagement for global financial institutions.

Prior to joining LPL, she led business management for the chief administrative office at Wells Fargo, where she also held a variety of enterprise leadership and strategy positions. During that time, Shackleton also served as president of the company’s cross-enterprise generational diversity networking organization and sat on multiple diversity and inclusion councils, the company said.

“Katelyn is a veteran leader and strategist with a focus on expanding market share, maintaining client retention and developing multi-year business strategies. She has a profound understanding of our industry and its key stakeholders, and experience managing multiple global teams…,” said Rich Steinmeier, LPL managing director and divisional president of business development.

LPL supports more than 21,000 financial advisors, 1,100 institution-based investment programs and 500 independent RIA firms nationwide.

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LPL Financial Reports 2Q22 Results, Decrease in Advisory and Brokerage Assets

LPL Financial Holdings Inc. (Nasdaq: LPLA), the parent of LPL Financial LLC – the nation’s largest independent broker-dealer, released its second quarter 2022 financial results and reported an advisor count of 20,871, up 780 sequentially and 1,757 year-over-year. LPL also reported that total advisory and brokerage assets decreased 4 percent year-over-year to $1.06 trillion.

Advisory assets decreased 3 percent year-over-year to $559 billion, and 11 percent from last quarter’s total of $624 billion. Advisory assets as a percentage of total assets increased to 52.5 percent, up from 51.9 percent a year ago.

Brokerage assets decreased 5 percent year-over-year to $506 billion, and 6 percent from last quarter’s total of $538.8 billion.

Total organic net new assets were $37 billion, representing 13 percent annualized growth, and $108 billion over the past 12 months, representing 10 percent annualized growth. Organic net new advisory assets were $11 billion, representing 7 percent annualized growth. Organic net new brokerage assets were $26 billion, representing 19 percent annualized growth.

Recruited assets were $44 billion. Recruited assets over the trailing 12 months were $84 billion, up approximately 5 percent from a year ago.

“We delivered another quarter of solid results,” said Matt Audette, chief financial officer. “We recorded double-digit organic growth, while successfully onboarding CUNA, substantially completing the integration of Waddell & Reed, and signing an agreement to acquire Boenning & Scattergood. Additionally, we are looking forward to onboarding People’s United Bank later this year. As we look ahead, our business momentum and financial strength position us well to continue creating long-term shareholder value.”

LPL onboarded the retail brokerage and advisory business of CUNA Brokerage Services Inc., which has $30 billion of total assets, of which $25 billion transitioned onto the LPL platform in the second quarter.

The firm also entered into an agreement to purchase the Private Client Group business of Boenning & Scattergood, a firm with approximately 40 financial advisors who serve approximately $5 billion of advisory and brokerage assets.

LPL also announced that work is underway to implement the client cash account as its primary sweep overflow vehicle by the end of the third quarter 2022.

The company also plans to accelerate investments to drive and support organic growth. “Given our improved earnings profile, we are accelerating investments to drive and support organic growth and anticipate up to $20 million of additional Core G&A in 2022. This increases our core G&A outlook range to $1,170 million to $1,195 million.”

Net income was $161 million, or $1.97 per share, during the second quarter of 2022. This compares with $119 million, or $1.46 per share, in the second quarter of 2021 and $134 million, or $1.64 per share, in the prior quarter.

Gross profit increased 18 percent year-over-year to $711 million. Core G&A increased 14 percent year-over-year to $286 million, and EBITDA increased 28 percent year-over-year to $311 million.

LPL supports more than 21,000 financial advisors, 1,100 institution-based investment programs and 500 independent RIA firms nationwide.

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Carson Group Hires Former LPL Exec as Chief Market Strategist

Carson Group, a financial services firm that manages $20 billion in assets, has hired Ryan Detrick as chief market strategist. In his new role, Detrick will be responsible for advancing the company’s research team, delivering market insights and expanding the Carson Group investment platform.

Detrick joins Carson Group after more than six years at LPL Financial, most recently as chief market strategist. Early in his career, he spent more than a decade at Schaeffer’s Investment Research and later served as a senior portfolio manager at Haberer Registered Investment Advisor and as a strategist at Kimble Charting Solutions, according to his LinkedIn page.

This is the second former LPL executive to join Carson Group in recent months. Burt White, who spent 14 years as LPL’s chief investment officer, joined Carson Group in April 2022 as managing partner and chief strategy officer.

“I’ve known Ryan for over a decade, and I am incredibly excited about what he brings to the team. Ryan is a trusted voice in the industry, providing timely market insights, commentary and investment strategies to support advisors and their clients,” said White. “His strong relationships and expertise will help enhance our industry-leading wealth management offering and further our mission of being the most trusted in financial advice.”

Detrick holds a chartered market technician designation, a bachelor’s degree in finance from Xavier University, and an MBA from Miami University.

Founded in 1983 by Ron Carson and headquartered in Omaha, Nebraska, Carson Group serves financial advisors and investors through its three businesses – Carson Wealth, Carson Coaching, and Carson Partners. The company currently manages $20 billion in assets and serves more than 43,000 families among its advisor network of 130+ partner offices, including 35 Carson Wealth locations.

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Sageview Hires Former Goldman Exec as Chief Operating Officer

SageView Advisory Group, an independent registered investment advisory firm, has hired Jorge Bernal as chief operating officer.

In his new role, Bernal will oversee all day-to-day operations and provide leadership for SageView’s shared services across its more than 30 offices.

Bernal was previously a managing director and co-head of advisory services for Goldman Sachs Personal Financial Management where he provided oversight and leadership to more than 250 national financial advisors who oversee approximately $35 billion in assets and generate approximately $250 million in annual revenue.

Prior to Goldman Sachs, he was chief operating officer for United Capital Financial Advisors and played a “key role” in its sale to Goldman Sachs, the company said. He was also a senior vice president at Fidelity Investments, a managing director at JP Morgan Chase, vice president of customer service and sales at Citibank, and an operations manager at Deluxe Corp. He began his career at American Express where he was supervisor on the Latin American risk management team.

“I’m thrilled to have Jorge join our executive team of well-established and recognized retirement and wealth management leaders,” said Randy Long, founder and chief executive officer. “His experience leading complex and diverse organizations and successful track record strengthen SageView’s ability to deliver superior service and support for our advisors across our qualified retirement plan and wealth management teams.”

Bernal holds a bachelor’s in business administration and international management from High Point University in North Carolina, as well as FINRA Series 7, 24 and 63 securities licenses.

SageView oversees $170 billion in retirement plan assets, and its wealth management business has grown to more than $4 billion via “organic expansion and targeted acquisitions,” the company said.

In January 2021, the company partnered with Aquiline Capital Partners, a financial services and technology-focused private equity firm. Due in part to this partnership, SageView has purchased six firms since July 2021 and plans to continue its expansion through this year.

Bernal is the latest in several key appointments at SageView. Jim Dario joined from TD Ameritrade in March as head of wealth management. Tara Egan, formerly of Goldman Sachs, joined in May as managing director of human resources. In 2021, SageView hired Tony Notermann of Advisor Group as chief financial officer, and Jeremy Holly of LPL Financial as chief development and integration officer.

Also joining SageView’s retirement plan consulting teams are Cullen Reif in Minneapolis, Minnesota and Andrew Ness in Richmond, Virginia.

Reif will be responsible for guiding investment committees in their fiduciary responsibilities, plan design strategy, building new client relationships and total plan fee benchmarking. Ness has experience supporting tax-exempt plan sponsors and predominantly state retirement programs.

SageView is headquartered in Newport Beach, California.

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LPL Financial to Buy $5 Billion Firm

LPL Financial LLC (Nasdaq: LPLA), the nation’s largest independent broker-dealer, has agreed to purchase the private client group business of Boenning & Scattergood, a broker-dealer and registered investment adviser headquartered in West Conshohocken, Pennsylvania.

Boenning & Scattergood is comprised of approximately 40 financial advisors who serve approximately $5 billion of advisory and brokerage assets. The 108-year-old family-owned business will onboard to LPL’s employee advisor model and retain its brand.

“Our family business has a 108-year history of helping our clients build and secure their financial legacies, and LPL is the right partner for us to carry that legacy and our business forward…,” said Harold Scattergood Jr., chairman and chief executive officer of Boenning & Scattergood.

The transaction is structured as an asset purchase, and is anticipated to close in early 2023.

Under the transaction structure, LPL will onboard Boenning & Scattergood advisors and certain staff as employees, and maintain Boenning & Scattergood operations and brand. Boenning & Scattergood client assets will onboard to LPL’s custodial platform. The company estimates a transaction multiple of ~5x post-synergy EBITDA.

LPL Financial supports more than 20,000 financial advisors, approximately 1,000 institution-based investment programs and approximately 500 RIA firms nationwide. LPL’s advisory and brokerage assets total approximately $1.16 trillion.

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SEC Charges Former LPL Broker with Stealing $1.7 Million from Retail Investors

The Securities and Exchange Commission has charged Eric Hollifield of Winder, Georgia, with misappropriating at least $1.7 million from two advisory clients and one brokerage customer and using the funds to pay for personal expenses, including the purchase of a home.

Between October 2016 and September 2021, Hollifield was a registered representative of LPL Financial and was a co-owner, principal, managing member, and an investment adviser representative of Hamilton Investment Counsel, which was also sanctioned by the SEC. LPL and Hamilton Investment Counsel both terminated Hollified for failing to disclose his outside business activities.

The SEC alleges that, beginning no later than January 2020, Hollifield transferred client assets to an outside business that he controlled, without the clients’ permission. He then directed a portion of those funds to his own accounts, which he used to pay personal expenses.

The SEC also claims that in August 2020, Hollifield used investor funds to purchase a 37-acre home in Winder, Georgia for approximately $1.7 million.

Specifically, the complaint states that Hollifield moved at least $425,000 of client funds through the outside business and used a portion of that money as a partial payment for the property. At that same time, he reportedly sold securities in a brokerage customer’s account and recommended that the customer transfer $1.24 million to another financial institution to accrue higher interest.

After receiving the customer’s permission for the transfer, Hollifield allegedly sent the money to a real estate closing agent to complete the purchase of his home, the SEC said.

The SEC’s complaint, filed in federal district court in Georgia, charges Hollifield with violating the antifraud provisions of various federal securities laws. The SEC seeks permanent injunctions and monetary relief.

According to BrokerCheck, in September 2021, he was barred from practicing in the state of Georgia and fined $500,000. The following month, he was barred by FINRA for refusing to participate in its investigation into the aforementioned allegations.

In separate settled administrative and cease-and-desist proceedings, the SEC charged Hamilton Investment Counsel LLC, the investment adviser Hollifield co-owned, and Jeffrey Kirkpatrick, its chief compliance officer, for failing to implement the firm’s policies and procedures by inadequately responding to numerous red flags surrounding Hollifield’s outside business activities.

Without admitting or denying the SEC’s findings, Hamilton Investment Counsel agreed to a censure, a cease-and-desist order, and a civil penalty of $150,000.

Similarly, Kirkpatrick agreed to a cease-and-desist order, a civil penalty of $15,000, and the imposition of a five-year limitation on his ability to act in a supervisory or compliance capacity.

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Advisor Group to Buy $40 Billion Independent Broker-Dealer

Advisor Group, one of the nation’s largest networks of independent wealth management firms, has agreed to purchase American Portfolios Financial Services Inc., a full-service, independent broker-dealer.

Headquartered in Holbrook, New York, American Portfolios currently supports more than 850 financial professionals in nearly 400 branches across the country who oversee approximately $40 billion in client assets.

Following the completion of the transaction, the firm will become a member of the Advisor Group network and continue to do business under its own brand and maintain its current operating model.

Upon completion of the deal, Lon T. Dolber, the chairman, chief executive officer, and president of American Portfolios, will join Advisor Group as vice chairman, providing counsel to Jamie Price, Advisor Group’s president and CEO. Dolber has more than 30 years of wealth management and financial services experience.

This announcement comes after Advisor Group last month agreed to acquire Infinex Financial Holdings Inc., the holding company of a privately held broker-dealer that supports banks, credit unions and financial institution-based financial advisors and their clients. Infinex has more than 750 financial professionals overseeing approximately $30 billion in client assets.

“American Portfolios is one of the most well-established firms in its space. Lon and his team have built a distinctive business spanning 22 years. We are honored to partner with them to continue their growth,” Price said. “This acquisition underscores Advisor Group’s commitment to generating the right type of growth as part of a strategic framework that delivers value to all the entrepreneurial businesses we serve. Over time, we look forward to leveraging our scale and capabilities to better serve American Portfolios financial professionals and their clients.”

Founded in 2001, American Portfolios offers a range of financial services, including personal financial and retirement planning, securities trading, mutual funds, access to investment research, long-term care planning, insurance products, tax-free investing and fee-based asset management.

Advisor Group, a portfolio company of Reverence Capital Partners, serves approximately 9,700 financial professionals who oversee approximately $515 billion in client assets. The network is comprised of FSC Securities Corporation, Royal Alliance Associates, SagePoint Financial, Triad Advisors, and Woodbury Financial Services,

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LPL Financial Recruits Ex-Wells Fargo Team

LPL Financial LLC, the nation’s largest independent broker-dealer, has added Encore Capital Management to its broker-dealer and corporate registered investment advisor model. The team has aligned with The Financial Services Network, an existing firm supporting LPL-affiliated advisors.

The advisors join from Wells Fargo Advisors and reportedly serve approximately $205 million in advisory, brokerage, and retirement plan assets.

Based in the Los Angeles suburb of Glendale, California, Encore Capital is led by managing partners and co-founders Ara Mekhitarian and Leonardo Aguilar, who have been partners for
more than 10 years and are supported by chief administrative officer Amanda Aguilar. The team provides investment, insurance, estate planning and wealth preservation services to include high-net-worth individuals, business owners, and families.

LPL Financial (Nasdaq: LPLA) supports 20,000 financial advisors, and approximately 800 institution-based investment programs and approximately 500 independent RIA firms nationwide. LPL’s advisory and brokerage assets total approximately $1.16 trillion.

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LPL Financial Launches New Program to Serve Affluent Market

LPL Financial LLC, the nation’s largest independent broker-dealer, has launched the LPL Private Client Services Network, a new program to provide LPL-affiliated advisors access to a register of companies to help serve the needs of high-net-worth clients.

“The new program is a distinguishing addition to our Private Client offering, creating a full-service option for advisors serving or seeking to serve affluent clients,” said Patrick Herrington, vice president of LPL Private Client. “With LPL’s Private Client Services Network, advisors have access to vetted providers, enabling a concierge-like experience that can help advisors grow value and deepen relationships with clients.”

According to the company, access to the network can help with the sale of small and mid-sized businesses; hedging and monetizing concentrated stock positions; high-end property and casualty insurance; specialized tax services; and specialty lending.

From 2016 to 2021, LPL’s Private Client offering has reportedly enabled a more than 200 percent growth of assets associated with high-net-worth households, defined as households with greater than $5 million in assets invested with their LPL advisor.

LPL Financial supports approximately 20,000 financial advisors, and approximately 800 institution-based investment programs and approximately 500 independent RIA firms nationwide.

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