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LPL Financial Fined by FINRA for Selling Municipal and Corporate Bonds at Unfair Prices

Boston, Massachusetts based LPL Financial LLC submitted a Letter of Acceptance, Waiver and Consent in which the firm consented to, but did not admit to or deny, the described sanctions and the entry of the Financial Industry Regulatory Authority's (FINRA) findings that it purchased municipal securities for its own account from a customer and/or sold municipal securities for its own account to a customer at an aggregate price (including any commission or service charge) that was not fair and reasonable. Factors taken into consideration were the best judgment of the broker-dealer or municipal securities dealer as to the fair market value of the securities at the time of the transaction and of any securities exchanged or traded in connection with the transaction; the expense involved in effecting the transaction; the fact that the broker-dealer or municipal securities dealer is entitled to a profit; and the total dollar amount of the transaction. FINRA also stated that in corporate bond transactions, the firm 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. The firm was censured and fined $60,000.

Broker-Dealers have a duty of best execution, which requires that they seek to obtain for its customers' orders the most favorable terms reasonably available under the circumstances. The obligation also provides that in any transaction for or with a customer, a member and persons associated with a member shall use reasonable diligence to ascertain the best inter-dealer market for a security and buy or sell in such market so that the price to the customer is as favorable as possible under prevailing market conditions. If broker-dealers do not use reasonable diligence to obtain the best price for their customers, they may be liable for damages resulting from unreasonable execution. Therefore, investors who have suffered damages due to purchases and/or sales of securities at unreasonable prices can bring forth claims to recover those investment losses against broker-dealers like LPL Financial, which should have prevented the above described misconduct.

Have you suffered losses in your LPL Financial LLC account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against LPL Financial LLC stockbrokers who may have engaged in stockbroker misconduct and caused investment losses.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 33 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

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