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Articles Tagged with LPL Financial

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FINRA recently fined LPL Financial (CRD #6413) for failing to disclose customer complaints and for failures in the firm’s anti-money laundering (AML) program.

David-Levy-of-Titus-Rockefeller-LLC-Permanently-Barred-from-Broker-Activity-After-Long-Career-of-Suspicious-Activity-300x200A misunderstanding with FINRA’s rule caused LPL to ignore dozens of customer complaints. The firm incorrectly failed to file and/or update registered representatives U4 or U5 forms to disclose dozens of reportable customer complaints that should have been filed. These claims requested compensatory damages of $5,000 or more. A representative for FINRA stated, “LPL incorrectly construed this phrase to mean that the firm was not required to report any complaint that did not expressly request compensation, even when the customer alleged a sales practice violation that caused a loss of $5,000 or more, and the complaint, when viewed as a whole, made clear that the customer was seeking compensation.”   LPL has been the subject of multiple customer complaints frequently filed as securities arbitration claims, claiming significant damages.

LPL also failed to file suspicious activity reports related to its AML program. Because of inaccurate guidance in the firm’s internal processes, including a “fraud case chart,” employees failed to investigate unauthorized attempts to access customer accounts. More than 400 “hacking” attempts of customer accounts went unreported.

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Bradley Taylor Pace (CRD #2097427) is a previously registered broker whose last employer was LPL Financial LLC (CRD #6413) of Orlando, FL. His previous employers include A.J. Pace & Co., Inc. (CRD #24228), also of Orlando, TD Waterhouse Investor Services, Inc. (CRD #7870) of Omaha, NE, and Quick & Reilly, Inc. (CRD #11217) of New York, NY. No current employment information is available. He began in the industry in 1991.

Are-or-Were-Unsuitable-Non-Traded-REITs-in-Your-Portfolio-300x224FINRA sent Pace a request for information, which he did not respond to by the requested deadline. FINRA then suspended Pace, indefinitely and in all capacities, effective 06/28/2018. Should Pace fail to request termination of his suspension within a 3-month time frame, he will be barred by FINRA from any association with any FINRA member firm. There is no indication of what prompted the request, or if any complaints were involved.

Pace is also the subject of a customer dispute, filed on 1/26/2018. In it, the customer alleged “unsuitability relating to the purchase of a REIT investment and misrepresentation relating to the liquidity of the REIT investment.” However, the claim was denied, and no additional information is available.

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Recently, we told you about a client dispute filed against broker and investment advisor  Shon Edward Flaharty (CRD #2666498), with LPL Financial LLC (CRD #6413) of Clearwater, FL.

Boca-Raton-Financial-Advisor-Robert-Child-Faces-Yet-Another-Customer-Dispute-300x199Flaharty’s recent disclosure, filed on 5/12/2018, has been settled. This customer dispute alleged, “over-concentration and unsuitability in connection with an ETF investment.”  The customer requested damages of $566,319.57, and LPL Financial has settled for $350,000. The allegations centered on dissatisfaction with the performance of an ETF investment. While the complaint was filed against Flaharty Asset Management (FAM), the investment adviser, and LPL Financial (LPL), Flaharty was not named in the action nor a party to the settlement.

Exchange traded funds (ETF) can be a suitable tool in an investor’s toolbox, but, if used improperly, an ETF can come with expensive commissions or high risk.  The market has introduced numerous ETF’s over the last decade and investors can potentially lose a large amount of money in many ETF’s.

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Picture1-1-300x200-300x200Shon Flaharty (CRD #2666498) is a currently registered broker and investment advisor with LPL Financial LLC (CRD #6413) of Clearwater, FL. He was previously employed with Banc Of America Investment Services, Inc. (CRD #16361), also of Clearwater, and Merrill Lynch, Pierce, Fenner & Smith Incorporated (CRD #7691) of New York, NY. He has been in the industry since 1996.

Flaharty has one disclosure, filed on 5/121/2018. This customer dispute is currently pending, and alleges, “Corporate customer alleges over-concentration and unsuitability in connection with an ETF investment.”  The customer has requested damages of $566,319.57. No additional information is available.

Our attorneys routinely represent investors in securities arbitration claims against LPL Financial.

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Sanders Spangler (CRD #4188542) was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Spangler consented to the sanction and to the entry of findings that he refused to appear for on-the-record testimony requested by FINRA in connection with an investigation into potential unauthorized trading in customer accounts.

Sanders Spangler was registered with LPL Financial’s Texas office until March 2017 when he was discharged for exercising discretionary power in customer account(s), in violation of firm policy.

Contact Our Firm if You’ve Invested with Sanders Spangler

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Joshua Ellis (CRD #5500165) was suspended on March 26, 2018 from associating with any FINRA member firm in all capacities. If Ellis fails to request termination of the suspension within three months of the date of the Notice of Suspension, he will automatically be barred on May 31, 2018 from association with any FINRA member in all capacities pursuant to FINRA Rule 9552(h).

South-Florida-Broker-Brian-Michael-Berger-Permanently-Barred-by-FINRA-1024x683-300x200Joshua Ellis was with LPL Financial in its Kennesaw, Georgia office until October 2017 when he was discharged for failing to timely respond to inquiries from the firm’s compliance department.

Contact Our Firm if You’ve Invested with Joshua Ellis

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David Schmerber (CRD #2093918) is a currently registered broker and investment advisor with Cetera Advisors of Centerville, OH. He has been in the industry since 1990. His previous employers include:

  • LPL Financial LLC (CRD #6413)
  • Smith Barney Inc. (CRD #7059)
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Silver Law Group is investigating former Coconut Creek, Florida-based LPL Financial broker Pedro O. Diaz (CRD# 4877003) after LPL Financial discharged him for short-term trading in mutual funds.  Short-term trading in mutual funds, according to Diaz’s FINRA BrokerCheck report, a violation of LPL Financial’s policies.

LPL Financial had employed Diaz since March 2010 and terminated him in December 2017.  Now, Newbridge Securities Corporation employs Diaz at its Boca Raton, Florida branch.

Diaz, who has been in the securities industry at South Florida brokerage firms for 12 years, also is an insurance agent.  Diaz sells fixed annuities and spends 10 percent of his time doing so.

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Silver Law Group is investigating former Colorado Springs, Colorado-based LPL Financial LLC broker Sonya Camarco (CRD# 2427529) after FINRA permanently barred her from the industry.

According to Camarco’s FINRA BrokerCheck report, FINRA barred Camarco in September 2017 after she failed to respond to its inquiry for information.

Sonya Camarco’s Employment with LPL Financial

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Melvin Case (CRD# 2393464) has been with LPL Financial in Jacksonville, Florida since 2008. In 2017, he was discharged from the firm in relation to a 2016 felony criminal charge in Duval County Circuit Court. Case pled guilty to exploitation of an aged adult and was sentenced to two years of probation. According to LPL Financial, Case was converting this elderly individual’s funds for his own personal benefit. This guilty plea also led FINRA to bring a regulatory action against Case in January 2018. FINRA found that Case failed to timely disclose his felony charge and guilty plea to the agency; he was suspended for six months and ordered to pay a $5,000 fine.

Case has also been the subject of several customer disputes. In 2017, one of Case’s customers brought a claim alleging Case made misrepresentations and poor recommendations in connection with the customer’s purchase of variable annuities. In another dispute from 2004, a Claimant similarly alleged that Pruco Securities (Case’s former employer) and Case made unsuitable recommendations and misrepresentations in connection with insurance products purchased by the Claimant. That case settled for $100,000, with Case responsible for paying two-thirds of the settlement.

FINRA requires its members to “have a reasonable basis to believe that a recommended transaction or investment strategy” is suitable for a customer given their individual needs. FINRA also requires that its members refrain from engaging in fraudulent or deceptive practices with their customers.

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