New Hampshire securities regulators have filed a regulatory action against brokerage firm LPL Financial seeking $3.6 million in fines, investigative costs, and restitution and seeking to force LPL to remediate losses for eligible New Hampshire clients for allegedly unsuitable sales of real estate investments to elderly clients. Over the past several years, LPL has been the subject of numerous customer claims that LPL brokers have sold risky and unsuitable REITs to investors and have resulted in REIT Investment loss.
The securities regulator alleges that the sales of the non-traded REIT were ‘unsuitable and unlawful’ and that LPL failed to supervise its brokers. The case stems from sales of non-traded REITs that an LPL broker made to an 81-year-old New Hampshire resident in January 2008. Non-traded REITs are typically illiquid, carry substantial risk, and involve high fees that can erode investor returns. The elderly LPL customer lost a significant amount of money from the investment. New Hampshire regulators have accused LPL of placing a higher concentration of risky alternative investments in elderly investors’ investment portfolios than LPL internal rules allowed. LPL ultimately settled by paying a $750,000 fine and agreeing to remediate losses for eligible New Hampshire clients, with total customer remediation reaching approximately $8 million for over 200 New Hampshire residents.
LPL Financial’s Pattern of Compliance Issues
This regulatory action follows on the heels of an apology that LPL’s CEO made to LPL Financial shareholders for the firm’s compliance missteps involving improper sales of REITs and variable annuities. LPL has paid millions of dollars in fines and to settle FINRA arbitration claims over the past several years as a result of its misconduct. These enforcement actions highlight ongoing concerns about unsuitable sales practices, particularly involving elderly clients and complex alternative investments.
Legal Options for Investors Who Lost Money
If you or anyone you know lost money in investments that an LPL broker recommended to you, contact Kaplan Rothstein Prüss Peraza, P.A. for a free consultation. We will evaluate your potential investment loss claims and discuss your options for attempting to recover your reit investment loss. Investors may be able to pursue recovery through FINRA arbitration if their broker recommended unsuitable investments or failed to disclose material risks associated with non-traded REITs or other alternative investments.
