LPL Financial Complaints and Financial Misconduct Cases

LPL Financial has faced several complaints and financial misconduct cases over the years. In 2019, the firm paid $26 million to settle allegations of unsuitable investment recommendations made by its financial advisors.

The Securities and Exchange Commission (SEC) found that LPL Financial failed to supervise its advisors, leading to the sale of complex investment products to retail investors. This resulted in significant losses for many investors.

LPL Financial has also been criticized for its handling of customer complaints. A 2020 report by the Financial Industry Regulatory Authority (FINRA) found that the firm had a high rate of complaints filed against it.

LPL Financial has faced numerous complaints from investors regarding various issues. LPL Financial was fined $3 million for failing to supervise representatives, resulting in customer funds being converted. This incident occurred between May 2018 and an unspecified date.

Investors have also complained about unsuitable investment recommendations made by LPL Financial representatives. For example, Cynthia Ann Giovacchino, a stockbroker registered with LPL Financial, was the subject of a customer complaint that was settled in 2022. The customer alleged that Giovacchino made unsuitable recommendations of Real Estate Investment Trusts (REITs).

LPL Financial has also been accused of failing to report customer complaints. In 2018, FINRA fined the company $2.75 million for multiple regulatory violations. The company failed to report dozens of customer complaints and did not file Suspicious Activity Reports (SARs) due to inaccurate guidance provided to its Anti Money Laundering team.

Several customers have filed complaints against LPL Financial regarding unauthorized purchases of equity index annuities and fixed annuities. Brian James Coleman, a former LPL Financial representative, was accused of making such sales between March 2015 and April 2016. The customers alleged that Coleman guaranteed them a certain return on investment, but they did not receive it.

Investors have also filed FINRA arbitration claims against LPL Financial over unsuitable investment recommendations. For example, Timothy Joseph Banks, a stockbroker registered with LPL Financial, was the subject of a customer complaint that alleged he made unsuitable investment recommendations of real estate securities.

LPL Financial has also been involved in arbitration claims over fraudulent structured note sales. Brian Jesse Singleton, a stockbroker registered with LPL Financial, was the subject of a customer-initiated investment related FINRA securities arbitration claim that was settled for $14,999.00 in damages.

LPL Financial has faced numerous regulatory actions, including fines and suspensions for its registered representatives.

Azmi P. Sharif was discharged by LPL Financial on December 20, 2022, for allegedly engaging in an undisclosed outside business activity.

Jeremy Jefferson Jacobson was fined $5,000 and suspended for three months from associating with any FINRA member in any capacity due to discretionary trading.

Sharif Azmi Sharif was fined $5,000 and suspended for nine months from associating with any FINRA member in any capacity for failing to disclose his involvement with an outside company.

Andrew M. Komarow was barred by the SEC from being a stockbroker or investment advisor representative due to a free-riding securities trading scheme.

LPL Financial was fined $3 million for failing to supervise its representatives, resulting in customer funds being converted.

Eric Shea Hollifield is the subject of an SEC enforcement action alleging securities fraud, with the regulator seeking sanctions against him.

LPL Financial paid $4.8 million to settle charges regarding violating an anti-money laundering rule.

LPL Financial has faced numerous complaints and fines related to financial misconduct. LPL Financial was fined $3 million for failing to supervise certain representatives, resulting in the conversion of customer funds between May 2018 and an unspecified date.

LPL Financial has also been censured and fined $5.5 million for failing to supervise direct business transactions, providing false information to customers regarding mutual fund switch transactions, and failing to supervise Business Development Company ("BDC") transactions.

In 2018, FINRA fined LPL Financial $2.75 million for alleged failure to report customer complaints. This included not reporting dozens of customer complaints seeking compensatory damages of $5,000 or more.

LPL Financial stockbrokers have been accused of various forms of misconduct, including misrepresentation, unsuitable investment recommendations, and mismanagement of customer accounts. For example, Joseph William Moyer was accused of making misrepresentations of material fact and making unsuitable investment recommendations.

LPL Financial stockbrokers have also been accused of breaching their fiduciary duties, failing to supervise the sale of certain investments, and misappropriating customer funds. William Perry Randall was accused of breaching his fiduciary duties and failing to supervise the sale of the FS Energy & Power Fund.

In some cases, LPL Financial stockbrokers have been barred from associating with any FINRA member in any capacity due to misconduct. For example, John Nicholas Terzis was barred from associating with any FINRA member after borrowing $200,000 from an elderly client.

Edward Terral Hill, a stockbroker registered with LPL Financial, is the subject of a customer complaint alleging he failed to follow instructions in connection with an investment.

Lori Fleischhacker Copeland, another LPL Financial stockbroker, was barred from associating with any FINRA member due to her failure to cooperate with an investigation into allegations of outside business activities.

Robert Douglas Mitchell, an LPL Financial representative since 2008, was involved in a FINRA Arbitration where customers alleged conflicts of interest, unauthorized trading, and breach of fiduciary duty.

Brian James Coleman, a former LPL Financial representative, was accused by customers of making unauthorized purchases of equity index annuities and fixed annuities, and guaranteeing returns that were not met.

Gary Alan Rosenstone, a registered representative of LPL Financial, was accused by a customer of failing to reasonably inform them about a variable annuity's features before recommending it.

Robert Douglas Mitchell, a stockbroker registered with LPL Financial LLC since January 18, 2008, was involved in a FINRA Arbitration case in 2017.

Several customers contested Mitchell's sales practices, claiming that he sold them risky and speculative investments, including covered call options, real estate investment trusts, and a variable annuity, which were not consistent with their investment objectives.

Mitchell reportedly sought to have this matter expunged from his record, but the Arbitrators denied his request.

Customers filed a FINRA Arbitration case against Mitchell and LPL Financial, citing causes of action including conflicts of interest, unauthorized trading, breach of fiduciary duty, unsuitability, and failure to supervise.

LPL Financial settled the customers' claims by paying them $82,500.00.

Michael Moffa, a former representative of LPL Financial LLC, is at the center of a FINRA Arbitration case. He was associated with the firm from December 10, 2010 to September 28, 2018.

Moffa's activities led to customers filing a collective complaint, claiming he made unsuitable investment recommendations. The customers stated they wanted to invest in low-risk products, but Moffa advised them to invest in exchanged traded funds, mutual funds, and a variable annuity.

These investments were seemingly unsuitable for the customers, and they alleged Moffa did not inform them about the risks involved. The customers requested $135,000 in damages, which is still pending a decision.

Moffa denies the customers' allegations and has been employed by other firms in the past, including Ameriprise Financial Services, Inc. and IDS Life Insurance Company.

Gary Rosenstone, a registered representative of LPL Financial LLC, has been involved in a notable arbitration case. He has been a registered representative since October 23, 2009.

Rosenstone failed to reasonably inform a customer about a variable annuity's features, specifically the differences between the death benefit, income benefit, and cash surrender value. This lack of transparency led to a customer filing a FINRA arbitration claim.

The customer's claim, FINRA Arbitration #17-01527, was settled by LPL Financial LLC on October 17, 2018, with the company paying the customer $30,000.00.