December 17, 2015 Comments (0) Blog, Securities Fraud

LPL Financial Settles Charges Involving Non-traded REIT Sales

(Last Updated On: December 17, 2015)

LPL Financial has settled charges with the New Hampshire’s Bureau of Securities Regulation for selling non-traded REITs to New Hampshire investors.

LPL has faced similar charges from other state regulators, including Massachusetts and Pennsylvania. In a press release, the New Hampshire securities regulator said the charges relate to unsuitable and unlawful sale of non-traded REITs and LPL’s failure to supervise the agents that sold them.

According to Investment News, Jeff Spill, deputy director of the New Hampshire Bureau of Securities Regulation said, “The firm could avoid these cases by reviewing its sales when first initiated and taking the appropriate data from the customer to appropriately assess the risk tolerance and suitability of the investments.”

LPL Financial has agreed to pay $750,000 to settle charges related to the sale of nontraded REITs to an 81-year-old investor in New Hampshire, an act which the state claims was both unsuitable and unlawful. In addition, as part of the consent order, LPL has agreed to offer remediation to any New Hampshire client who was sold a nontraded REIT since 2007 if the sale exceeded LPL’s guidelines or product-specific restrictions.

Non-traded REITs are typically illiquid and complex investments that involve a high degree of risk. Often problems arising from non-traded REITs generally involve the failure of broker-dealers to adequately disclose the risks, commission structure, and lack of liquidity.
Broker dealers have a fiduciary duty to make investment recommendations that are consistent with a client’s age, risk tolerance, investment objectives, and net worth, among others. To the extent that some broker dealers may have overlooked suitability requirements and/or state rules, they may be held responsible for investment losses in a FINRA arbitration claim

If you invested in non-traded REITs sold by LPL financial or another brokerage firm and would like to discuss your litigation options, please call The White Law Group at 312-238-9650 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.

For more information on The White Law Group, visit www.whitesecuritieslaw.com.