The Massachusetts Security Division has ordered LPL Financial LLC to pay over $2 million in restitution to investors who purchased shares of non-traded real estate investment trusts ("non-traded REITs"). Regulators also fined LPL $500,000 for violating state limitations and LPL's own policies and procedures regarding REIT transactions.
The news follows the Securities Division's December complaint against LPL and the firm's own January announcement of the firm's intention to adopt new policies regarding mutual fund orders, ETF securities trading and REIT transactions.
Massachusetts' December complaint had alleged improper sales practices and sales made in violation of both firm and state regulatory limits. These sales were related to non-traded REITs, which are often illiquid and risky due to high fees, minimum reporting requirements and conflicts of interests associated with increased commissions and limited redemption opportunities.
As part of its consent order, LPL admitted to several statements of fact regarding REIT sales, but did not admit nor deny the Securities Division's allegations regarding compliance with securities law nor the charge of inadequate staff training and supervision.
LPL additionally agreed to review all Massachusetts-sold non-traded REITs and offered restitution to all other investors in the state who purchased these REITs in violation or excess of LPL rules or state regulations.
Prior to the $2 million restitution order, LPL Financial Holdings Inc. posted record revenue for the 2012 year of $3.66 billion. LPL's quarterly earnings were reported at $0.50 per share.
If you have purchased REITs from LPL Financial or from any firm you believe has sold to you in violation of prospectus guidelines, internal compliance standards, or in excess of state limits, and such misconduct has proven harmful to your investments or financial interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.
News: LPL ordered to pay $2M in restitution (Investment News)