Investment News reported today that LPL Financial is being asked to pay $3.6 million in investor repayments and fines. The state of New Hampshire and LPL financial on Monday slapping LPL with a $1 million fine and $200,000 in investigative costs in addition to the $2.4 million in buybacks and restitution for clients.The state alleges unsuitable sales of real estate investments to elderly clients and adds that LPL failed to supervise its agents.
This is not the first time that LPL has been in the news for problems with REITs. In March of 2013 Investment News reported that the Montana State Auditor’s Department was concerned with the sale of REITs to unsophisticated investors. The New York Times collaborated the story and also questioned LPL’s broader compliance efforts.
We applaud The New Hampshire Bureau of Securities and the Montana State Auditor’s Department for taking action, and wish other state securities regulators would do the same. Unfortunately, the New Hampshire action can only benefit New Hampshire investors. Our firm has successfully represented investors nationwide in claims against LPL Financial and other firms selling non-traded REITS, both in court and in the FINRA arbitration process. Our claims have most commonly been based on the fact that our clients were not told that the REITs and other so-called alternative investments they were sold could not be sold in the public market, and were laden with undisclosed fees. We continue to investigate firms that sell these products and welcome calls from investors with questions about their investments that they cannot sell.
Darlene Pasieczny’s practice at Samuels Yoelin Kantor LLP focuses on all stages of corporate and securities law issues, securities litigation and FINRA arbitration, fiduciary litigation in trust and estate disputes, and complex civil litigation. Darlene’s practice includes representing investors nationwide in investment disputes through FINRA arbitration.