LPL Financial Holdings Inc. Rotten Score Breakdown

FINRA censured LPL Financial LLC in 2015 and imposed a $10 million fine plus approximately $1.7 million in restitution for broad supervisory failures. FINRA found deficiencies involving LPL's supervision of sales of non-traditional exchange-traded funds, variable annuity contracts, non-traded real estate investment trusts and other complex products. The regulator also identified failures involving trade monitoring and reporting. FINRA found that LPL failed to deliver more than 14 million trade confirmations to customers. The investigation also identified weaknesses in LPL's automated anti-money-laundering surveillance. According to FINRA, programming flaws prevented LPL's surveillance system from generating certain alerts concerning potentially suspicious ATM activity. LPL agreed to a $10 million fine and approximately $1.7 million in restitution to customers. Primary source: FINRA — July 2015 Disciplinary Actions: https://www.finra.org/sites/default/files/publication_file/July_2015_Disciplinary_Actions.pdf

The U.S. Securities and Exchange Commission charged LPL Financial LLC in January 2025 with multiple failures in its anti-money-laundering compliance program. According to the SEC, from at least May 2019 through December 2023 LPL had longstanding deficiencies in its customer identification program. The SEC found that LPL failed to timely close accounts in circumstances where the identities of customers had not been properly verified. LPL also failed to close or restrict thousands of high-risk accounts. These included cannabis-related accounts and certain foreign accounts that were prohibited under LPL's own anti-money-laundering policies. The SEC concluded that LPL willfully violated federal securities-law requirements governing broker-dealer anti-money-laundering programs. Without admitting or denying the SEC's findings, LPL agreed to a censure and cease-and-desist order. The company also agreed to compliance undertakings intended to address the deficiencies and paid an $18 million civil penalty. Primary source: U.S. Securities and Exchange Commission — LPL Financial to Pay $18 Million for Anti-Money Laundering Program Failures: https://www.sec.gov/newsroom/press-releases/2025-17