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TMCNet:  Notice to All LPL Customers Who Invested In Alternative Investments: The Securities Arbitration Law Firm of Klayman & Toskes Investigates Sales Practices of LPL In Light of Fine Levied Against LPL by FINRA

[March 26, 2014]

Notice to All LPL Customers Who Invested In Alternative Investments: The Securities Arbitration Law Firm of Klayman & Toskes Investigates Sales Practices of LPL In Light of Fine Levied Against LPL by FINRA

NEW YORK --(Business Wire)--

The Securities Arbitration Law Firm of Klayman & Toskes ("K&T") (www.nasd-law.com) announced today that the Financial Industry Regulatory Authority ("FINRA") fined LPL Financial (NasdaqGS: LPLA) $950,000 for supervisory deficiencies related to the sales of alternative investment products, including non-traded real estate investment trusts ("REITs"), oil and gas partnerships, business development companies ("BDCs"), hedge funds, managed futures and other illiquid pass-through investments. As part of the sanction, LPL was also required to conduct a comprehensive review of its policies, systems, procedures and training, and remedy the failures.

According to FINRA, "from January 1, 2008, to July 1, 2012, LPL failed to adequately supervise the sales f alternative investments that violated…concentration limits. At first, LPL used a manual process to review whether an investment complied with suitability requirements, relying on information that was at times outdated and inaccurate. The firm later implemented an automated system for review, but that database contained flawed programming and was not updated in a timely manner to accurately reflect suitability standards. LPL also did not adequately train its supervisory staff to analyze state suitability standards as part of their suitability reviews of alternative investments."


FINRA further added, "In order to sell alternative investments, a broker-dealer must tailor its supervisory system to these products. LPL exposed customers to unacceptable risks by not having an adequate system in place that could accurately review whether a transaction complied with suitability requirements imposed by the states, the product issuers and the firm itself - and it failed to train its registered representatives to apply all the suitability guidelines appropriately." In settling the matter with FINRA, LPL neither admitted nor denied the charges, but consented to the entry of FINRA's findings.

The sole purpose of this release is to investigate, on behalf of our clients, the sales practices of LPL in connection with the sale of alternative investments to their customers. Current and former customers of LPL who purchased alternative investments, and have information relating to the manner in which the firm represented these products, are encouraged to contact Steven D. Toskes or Jahan K. Manasseh of Klayman & Toskes at (888) 997-9956, or visit us on the web at www.nasd-law.com.


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