BROWSE BY TOPIC
- Bad Brokers
- Compliance Concepts
- Investor Protection
- Investments - Unsuitable
- Investments - Strategies
- Wall Street News
- Investments - Private
- Rules & Regulations
- Bad Advisors
- Boiler Rooms
- Terminations/Cost Cutting
- General News
- Donald Trump & Co.
- Regulatory Sanctions
- Big Banks
Stories of Interest
- Sarah ten Siethoff is New Associate Director of SEC Investment Management Rulemaking Office
- Catherine Keating Appointed CEO of BNY Mellon Wealth Management
- Credit Suisse to Pay $47Mn to Resolve DOJ Asia Probe
- SEC Chair Clayton Goes 'Hat in Hand' Before Congress on 2019 Budget Request
- SEC's Opening Remarks to the Elder Justice Coordinating Council
- Massachusetts Jury Convicts CA Attorney of Securities Fraud
- Deutsche Bank Says 3 Senior Investment Bankers to Leave Firm
- World’s Biggest Hedge Fund Reportedly ‘Bearish On Financial Assets’
- SEC Fines Constant Contact, Popular Email Marketer, for Overstating Subscriber Numbers
- SocGen Agrees to Pay $1.3 Billion to End Libya, Libor Probes
- Cryptocurrency Exchange Bitfinex Briefly Halts Trading After Cyber Attack
- SEC Names Valerie Szczepanik Senior Advisor for Digital Assets and Innovation
- SEC Modernizes Delivery of Fund Reports, Seeks Public Feedback on Improving Fund Disclosure
- NYSE Says SEC Plan to Limit Exchange Rebates Would Hurt Investors
- Deutsche Bank faces another challenge with Fed stress test
- Former JPMorgan Broker Files racial discrimination suit against company
- $3.3Mn Winning Bid for Lunch with Warren Buffett
- Julie Erhardt is SEC's New Acting Chief Risk Officer
- Chyhe Becker is SEC's New Acting Chief Economist, Acting Director of Economic and Risk Analysis Division
- Getting a Handle on Virtual Currencies - FINRA
We seek to provide information, insights and direction that may enable the Financial Community to effectively and efficiently operate in a regulatory risk-free environment by curating content from all over the web.
Stay Informed with the latest fanancialish news.
NEWSLETTERS & ALERTS
Brokered CDs: Ya Gotta Know What You're Selling
by Howard Haykin
LPL Financial agreed to pay a $375K fine to settle FINRA charges that the firm and its registered reps failed to adequately disclose all material risks and features of brokered certificates of deposit to customers.
FINRA FINDINGS. LPL Financial, a FINRA member since 1973, is headquartered in Boston, MA and conducts a general securities business. As of 6/30/17, LPL had nearly 18,000 registered reps in over 10,000 branches.
From 2010 to 2016, LPL sold $533 million worth of the Brokered CDs in nearly 8,000 transactions, generating over $1.6 million in firm revenues. The Brokerered CDs, which the firm characterized as non-security CDs (because they were FDIC insured instruments), had such complex features as ... (i) a step up, callable, floater or any combination thereof; and, (ii) complicated, multi-reference, variable rates that may expose purchasers to a variety of risks, including equity market volatility
That said, the Brokered CDs were sold even though ...
- LPL registered reps had not received adequate training on all material risks and features of the Brokered CDs;
- LPL registered reps or fixed income desk employees had not received, or did not have, meaningful access to issuer-prepared disclosure documents prior to their sales of these products; and,
- the Firm had failed to adequately disclose all material risks and features of the Brokered CDs to customers.
► Pursuant to FINRA NtM 02-69, the firm prepared and delivered to customers who purchased Brokered CDs a generic CD disclosure statement that described the general risks and characteristics of brokered CDs.
This case was reported in FINRA Disciplinary Actions for April 2018.
For details on this case, go to ... FINRA Disciplinary Actions Online, and refer to Case #2015045703001.