Articles Tagged with Failure to Supervise Investment Attorney

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Lincoln Financial Advisors Corporation (LFA) of Fort Wayne, Indiana submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly failing to implement and enforce reasonable supervisory procedures related to the recommendation of private placement variable annuities (PPVA).  LFA has been a FINRA member since 1969 and has nearly 2,500 registered representatives and over 500 branch offices.

FINRA found that between October 2008 and April 2009, representatives from two of LFA’s branch offices recommended customers to invest in a hedge fund that engaged in a complex option trading strategy. FINRA alleged that the complexity of the hedge fund exposed the LFA clients to a high degree of financial risk. LFA however approved the recommendations and 25 firm customers invested approximately $11.7 million in the hedge fund. In 2010, the hedge fund was shut down.

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