As part of its settlement with the Financial Industry Regulatory Authority (FINRA), LPL Financial LLC agreed to pay a $5.5 million fine.。

Between January 2012 and August 2019, LPL failed to reasonably supervise the transactions (i.e., direct business transactions) that the company's registered representative conducted directly with the product sponsor on behalf of the company's customers, in violation of NASD Rule 3010 and FINRA Rules 3110 and 2010.。

LPL did not take reasonable steps to ensure that its representatives reported such transactions on the company's transaction record book used to identify potentially offending sales practices, resulting in approximately 830,000 such transactions not appearing on the record book.。The company does not monitor these transactions because it does not generate unusual reports from these transactions to identify potentially offending sales practices, including potentially inappropriate transactions.。

In an additional approximately 2 million direct business transactions, LPL also failed to ensure that client investment profile information (e.g., client's age, investment horizon, and liquidity needs) was collected that was relevant to certain appropriateness judgments。

By failing to collect the required customer information, LPL failed to produce and maintain the required books and records, in violation of section 17 (a) of the Securities Exchange Act of 1934, section 17a-3 of the Exchange Act, section 3010 of the NASD and rules 3110, 4511 and 2010 of FINRA。

In addition, from February 2016 to June 2020, LPL sent approximately 11,300 conversion letters to customers, which contained inaccurate information about the expenses incurred by customers in converting from one security to another, in violation of FINRA rules 2010.。

LPL also violated FINRA rules 3110 and 2010 by failing to reasonably monitor the appropriateness of certain transactions because the firm's supervisory review tool contained incorrect information about the fees paid by customers for certain conversions.。

Finally, from May 2017 to November 2022, LPL violated FINRA Rule 3110 and 2010 and Securities Exchange Act of 1934 Rule 15l-1 by failing to establish, maintain and enforce a supervisory system, including written procedures, to reasonably ensure that recommendations of publicly traded securities by Business Development Companies (Listed BDCs) comply with the duty of care of FINRA Rule 2111 and the Best Interests Ordinance.。

In addition to the fine, the company agreed to accept the reprimand and pay 651,374..$51 compensation and interest。