FINRA suspended ex LPL broker, Mark Tauzin, from the securities industry for eight months for unsuitable short-term trading of unit investment trusts (UITs). FINRA alleged the short term trading was for the purpose of generating excessive commissions. FINRA ordered Tauzin to repay clients $205,000 plus interest and also fined Tauzin $20,000.
Two investors, a mother and daughter, were awarded $52,062 by a FINRA arbitration panel after they allegedly received unsuitable recommendations from their LPL broker, Samuel Izaguirre. The investors were only claiming about $9,000 in damages, but because of one of the investor's age and diminished mental capacity, they were awarded treble damages and attorney's fees. Izaguirre is still registered with FINRA and LPL has stood by him, claiming he acted in "good faith." The claims related to advice Izaguirre provide in connection with an IRA account.
LPL Financial was fined $11.7 million by the Financial Industry Regulatory Authority (FINRA) for supervisory failures. FINRA believes that the supervisory failures began in 2007 when LPL allegedly did not properly supervise the sale of complex products. FINRA also alleges that the system LPL had in place to review customer accounts was deficient which caused 67,000 customers to not receive 14 million trade confirmations.
Raymond Schmidt, formerly with LPL, was barred by the Financial Industry Regulatory Authority (FINRA) after he borrowed about $2.25 million from his clients. Schmidt failed to disclose to LPL that he was borrowing from customers over a three year period to build a luxury rental home in Hawaii. Schmidt was also obligated to notify FINRA about the rental home because it is considered an outside business activity, but failed to do so. FINRA made no accusations that Schmidt had failed to repay the borrowed monies. However, Schmidt has one customer complaint pending for $375,000 relating to the real estate in Hawaii.
After allegedly bilking clients of almost $1.7 million, Blake B. Richards, a former LPL broker, was ordered to pay $2 million by Judge Willis B. Hunt, Jr. The Securities and Exchange Commission (SEC) first announced the charges against Richards in the summer of 2012. The SEC believes that Richards began advising at least seven clients to invest into funds and entities that he controlled. The investors were told that their funds would be reinvested into conservative investments, but in reality it was going to Richards to pay his own personal expenses. Richards allegedly kept up scam by creating fake statements for each of the clients. LPL has commented that they began an investigation and terminated him after another advisor had tipped the company off. In June 2013, shortly after he was terminated, Richards was also barred from the securities industry by the Financial Industry Regulatory Authority.
Gary Chackman, a long time LPL broker, was barred from the financial industry by the Financial Industry Regulatory Authority, Inc. (FINRA) for abusive sales practices involving nontraded real estate investment trusts (REITs). According to FINRA, Chackman falsified documents to effectuate the improper REIT sales. By falsifying the documents, Chackman enjoyed the benefit of the typically high (7%) commission paid on nontraded REITS.