BOSTON–The Massachusetts Securities Division has fined the LPL Financial Holdings, Inc. $1 million for allegedly failing to supervise advisers operating out of Digital FCU in Marlborough.
The state regulators alleged that LPL agents at Digital Federal Credit Union were working for both the brokerage and the credit union, according to the Boston Globe, and were being paid bonuses by the credit union and used the name “DCU Financial” for their operation.
Secretary of State William F. Galvin, who oversees the state securities division, said the employees did not make it clear to members/customers they were being paid by both the credit union and LPL, the Globe reported.
“Credit union members are hard-working average investors who should not find themselves subject to these types of aggressive sales practices and misleading and confusing disclosures,” Galvin said in a released statement.
LPL has agreed to pay the fine and to remove the name DCU from its business name on the credit union premises. LPL also was ordered to perform an internal review of its policies, procedures, and training in connection with the credit union, according to the Globe.
LPL issued a statement saying it “has made a long-term commitment to enhancing our risk management and compliance structures. We are pleased to have resolved this matter with the Massachusetts Securities Division.”
According to the Boston Globe, LPL has paid millions of dollars in fines since 2013 to regulators to resolve allegations ranging from the unsuitable sale of variable annuities and complex exchange-traded funds to failing to send out or create proper records.