Secretary of State Hibbit Hosemann issued the following statement.
Mississippi will soon receive $499,000 in civil penalties from LPL Financial LLC, a national wealth management group which had been selling unregistered, non-exempt securities since October 2006. A consent order made the settlement final this week.
The penalties are part of a $26 million multi-state settlement with LPL, which stemmed from an investigation regarding the failure to establish and maintain reasonable policies and procedures to prevent the sale of unregistered, non-exempt securities by the company to its customers.
In July 2017, the North American Securities Administrators Association (NASAA) established a task force with Massachusetts and Alabama as lead states to investigate LPL’s failure to establish and maintain reasonable policies and procedures to prevent the sale of unregistered, non-exempt securities by LPL to its customers. Mississippi is a member of NASAA. NASAA President Joseph P. Borg said LPL fully cooperated with the NASAA task force.
“We are grateful for the hard work of our partners in neighboring and other states in bringing this case to a conclusion,” Secretary of State Delbert Hosemann said. “Firms must be held accountable when they fail to follow state and federal laws designed to protect investors.”
The investigation in this case focused on LPL’s retention, use, and subsequent cancellation of certain third-party services integral to compliance with state securities registration requirements. Investigators also uncovered deficiencies within LPL’s compliance structure related to controls, monitoring and reporting tools, and escalation protocol regarding response to significant compliance issues.
Regulators concluded LPL offered and sold unregistered, non-exempt securities and failed to reasonably supervise the flow of information to ensure full and proper compliance with state securities registration requirements.
While no evidence was found of willful, reckless, or fraudulent conduct by LPL, investigators did find that the firm failed to maintain adequate systems to reasonably supervise agents, staff, and employees. State investigators also determined that LPL failed to maintain books and records necessary to ensure full compliance with state securities registration requirements, and failed to conduct due diligence regarding the retention, use, and subsequent cancelation of certain third-party services.
LPL also acted negligently in canceling certain third-party services; failed to supervise agents, staff, and employees in the performance of duties related to systems operation, process, and checks and balances; and failed to invest sufficient and appropriate resources in personnel, expertise, systems, and operations to adequately comply with state securities registration statutes, rules, and regulations.
In addition to civil penalties, the settlement calls for LPL to offer to repurchase from investors securities held in LPL accounts determined to have been unregistered, non-exempt equity, or fixed-income securities sold since October 1, 2006. Each offer must include 3 percent simple interest per year.
LPL also agreed to a review of the integration of new securities products to assess the firm’s ability to comply with state securities registration requirements applying to the offer and sale of these new products. The firm also agreed to a similar review of its vendor service protocols.
For more information about the settlement or other securities matters, visit www.sos.ms.gov/securities or call the Mississippi Secretary of State’s Securities Division at (601) 359-1334.
Saturday, October 13, 2018
SOS Gets $499K in Securities Settlement
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8 comments:
Isn't this supposed to go into the General Fund?
What pet project will this money be spent on?
This represents approximately 17 cents per Mississippi resident which is about the same as the tax per gallon of gasoline. This should be a game changer for Mississippi.
It all helps.
So, Dilbert takes credit for the state receiving "its share" of a $26 million nationwide settlement - something he had nothing to do with other than making sure the state's dues were paid to the national association. But as with everything else in his office, the press release is sent out touting this "bigass deal" - as noted above, two dimes per person in the state. Glad to have it, but wonder how much he will squander first in patting himself on the back for how well he sat on his arse while they set us a check.
But, the tax on gasoline, or anything else, ain't a one time thing. So, your analogy falls flatter than flat.
Attn 5:46 PM (?) It is kind of early in the day to be drunk!!!
"While no evidence was found of willful, reckless, or fraudulent conduct by LPL, investigators did find that the firm failed to maintain adequate systems to reasonably supervise agents, staff, and employees. State investigators also determined that LPL failed to maintain books and records necessary to ensure full compliance with state securities registration requirements, and failed to conduct due diligence regarding the retention, use, and subsequent cancelation of certain third-party services."
By that statement, City of Jackson Public Works owes the state how much? I guess the Blood/Turnip clause is applied regarding their ability to pay it back.
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