LPL Securities has hired the Securities and Exchange Commission Division of Enforcement’s ex-acting deputy director David Bergers as LPL Financial Holdings Inc.’s (LPLA) general counsel and managing director for government and legal relations. Following news of the appointment, LPL CEO and Chairman Mark Casady was quick to point out that the firm didn’t choose Bergers because it recently has been in trouble with regulators. That said, Casady did acknowledge that Bergers’ 13 years of SEC experience was one reason he became the top contender for the post. Because of SEC rules, Bergers is not allowed to appear before the Commission as an LPL representative until June 2014.
A source close to our securities fraud law firm says that there are at least seven complaints against Bergers at the moment, with the majority of them involving large seven-figure. Before working at the SEC, Bergers served as assistant general counsel and vice president for Tucker Anthony Inc., a regional brokerage firm.
In regards to LPL’s recent trouble’s with regulators, there was the $7.5 million that the Financial Industry Regulatory Authority ordered the financial firm to pay over nearly three dozen key e-mail system failures (including retention issues) that occurred between 2007 and 2013 involving 28 million business emails and thousands of independent contractor representatives. The SRO accused LPL of inadequate supervision, failure to capture emails and respond to regulator requests, and making misstatements during the SRO’s investigation. In addition to the fine, LPL has to establish a $1.5 million fund for customer compensation.
In February, LPL Financial LLC (LPLA) consented to pay $2 million to Massachusetts’s securities regulator as restitution and a $500,000 fine over nontraded REITs. The total restitution amount, however, eventually reached $4.8 million. William F. Galvin, the Massachusetts Secretary of the Commonwealth, claims LPL Financial Holdings did not properly review the sales of the non-traded real estate investment trusts and violating rules that placed a concentration cap that is supposed to limit investors’ buys to 10% of their net worth.
Also, more inadequate supervision allegations were aimed at LPL after one of its ex-financial advisers was hit with SEC charges accusing him of bilking investor of $2 million. Blake Richards allegedly misappropriate funds from at least seven customers. The majority of the funds were retirement monies and life insurance proceeds from spouses that passed away. The SEC’s complaint, which referred to Richards as a marginal LPL Financial broker, contends that he engaged in “selling away,” which involves engaging activities outside the firm to defraud clients.
If you are an LPL Financial client that suffered investment losses and you suspect that broker negligence, inadequate supervision, or some other type of broker fraud may be involved, please contact one of our securities fraud lawyers right away to ask for your free case assessment.
After SEC, Bergers to lead LPL Financial’s legal department, Biz Journals, June 20, 2013
More Blog Posts:
SEC Charges Ex-LPL Financial Adviser With Defrauding Investors of $2M, Stockbroker Fraud Blog, May 28, 2013
FINRA Orders LPL Financial to Pay $7.5M Over Allegedly Inadequate Supervision of E-Mails, Stockbroker Fraud Blog, May 23, 2013
LPL Financial Ordered to Pay $7.5M FINRA Fine Over E-Mail Failures, Institutional Investor Securities Blog, May 22, 2013