FINRA fined Boston-based LPL Financial Corporation, nka LPL Financial LLC, the sum of $220,000 in 3 separate disciplinary actions pertaining to best execution, branch e-communications, and handling of customer funds and securities.  

    Fined $20K over Best Execution.   LPL Financial settled FINRA charges that, in transactions for or with a customer, it failed to use reasonable diligence to ascertain the best inter-dealer market, and failed to buy or sell in such market so that the resultant price to its customer was as favorable as possible under prevailing market conditions. This is FINRA Case #2007011340401.

    $100K Fine over Electronic Communications.   LPL Financial settled FINRA charges that it failed to review some 3 million e-communications in certain branch locations.  FINRA found that the emails in questions, which were transmitted or received by firm financial advisors (FA's), related to one bank program, and they were not processed through the Office of Supervisory Jurisdiction Review Tool (ORT) due to a technology problem concerning the interface between one bank program’s email system and the firm’s ORT.  As a result, those emails were not subject to supervisory review by firm managers and principals.  FINRA also found that the firm’s ORT flagged for supervisory review FA emails, but a branch manager or principal never reviewed them.  This is FINRA Case #2009016570001.

    $100K Fine over Customer Funds and Securities.   LPL Financial settled FINRA charges that it failed to adequately review and monitor all transmittals of funds and securities from customer accounts to 3rd-party accounts and to RRs's accounts.  FINRA found that the firm, in part, used an ORT (see above) to monitor 3rd-party disbursements.  However, ORT was designed to identify only transmittals of cash - e.g. in the form of checks, Automated Clearing House (ACH) transactions, or wire transfers to third parties. 

By using ORT for its reviews, the firm allegedly didn't address journals between accounts, which one of the firm’s RR's exploited by  journaling $40,000 in cash as well as securities out of customers’ accounts to his personal account, and converting the cash and proceeds from the sale of the journaled securities in the aggregate amount of over $1 million. 

FINRA further found that the firm’s procedures required that any journal that results in assets being journaled into a n RR's personal account must be submitted to a supervisor for approval - and the firm failed to document any approvals of the subject journals or document that the requests were escalated to a supervisor for further review. 

Finally, while firm procedures required that a written confirmation be sent to the customer’s address of record in conjunction with all 3rd-party journals, the firm nonetheless failed to send written confirmations in conjunction with some third-party journals. This is FINRA Case #2009016922702.  

[FINRA March Disciplinary Actions]