LPL Financial (“LPL”), the nation’s fourth-largest brokerage firm and the largest in much of rural
America, is growing in size and, unfortunately, in its list of problems with regulators.
As LPL has expanded, state and federal authorities have censured the company and its brokers with unusual frequency, as demonstrated by recent New York Times article. Among other complaints, regulators penalized LPL brokers for selling complex investments to unsophisticated investors, for speculative trading in customer accounts, and, in a few cases, for outright stealing from clients. In the last year and a half, state regulators in Illinois, Massachusetts, Montana, Oregon and Pennsylvania have penalized LPL for failure to oversee its brokers properly. Surprisingly, LPL’s brokers have faced the most common industry reprimands, and have done so more frequently than even its larger competitors (Wells Fargo, Morgan Stanley and Merrill Lynch).