FINRA slaps $6.5 million fine on LPL Financials

The Financial Industry Regulatory Authority (FINRA) has hit LPL Financials, one of the largest independent broker-dealers in the US, with a $6.5 million fine for failing to establish a supervisory system necessary for record retention and violating NASD Rule 3010 and FINRA Rules 3110 and 2010.

The charges were that LPL failed to maintain electronic records in the required format and the company did not inform FINRA of changes in the electronic storage media system. Furthermore, FINRA states that LPL’s failure to keep records in the required format impacted at least 87 million records. In result, over 1.5 million customer communications recorded by a third-party vendor were deleted.

According to the official document, “From January 2014 to September 2019, LPL failed to establish and maintain a supervisory system, including written procedures, reasonably designed to achieve compliance with certain of its record retention obligations, in violation of NASD Rule 3010 and FINRA Rules 3110 and 2010. LPL also failed to send account notices that are required to be sent to customers at 36-month intervals for each account in which a suitability determination had been made (36-Month Letters) to over one million customers.”