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FINRA Disciplinary Action Against LPL Financial LLC

In July 2013, LPL Financial LLC submitted a Letter of Acceptance, Waiver and Consent in which the firm agreed to be censured and fined $60,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it purchased municipal securities for its own account from customers and/or sold municipal securities for its own account to customers at an aggregate price (including any commission or service charge) that was not fair and reasonable, taking into consideration all relevant factors, including the best judgment of the broker, dealer or municipal securities dealer as to the fair market value of the securities at the time of the transaction and of any securities exchanged or traded in connection with the transaction; the expense involved in effecting the transaction; the fact that the broker, dealer, or municipal securities dealer is entitled to a profit; and the total dollar amount of the transaction.

According to FINRA, the firm failed to use reasonable diligence to ascertain the best inter-dealer market, and failed to buy or sell in such market so that the resultant price to its customer was as favorable as possible under prevailing market conditions. The findings also stated that the firm submitted evidence that it made restitution to each of the affected customers.  Because of the evidence submitted by LPL, it is unlikely that the customers initiated FINRA arbitrations, or any other type of securities arbitration.