SEC Charges LPL Financial with Anti-Money Laundering Violations
LPL Financial LLC agreed to pay an $18 million penalty to resolve SEC charges regarding systemic failures in its anti-money laundering program between 2019 and 2023.
LPL Financial LLC was charged with willfully violating Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-8 due to AML program deficiencies. The firm failed to properly verify customer identities and neglected to restrict thousands of high-risk accounts, including cannabis-related and foreign accounts. To resolve the matter, LPL agreed to an $18 million civil penalty, a censure, and a cease-and-desist order.
Between May 2019 and December 2023, LPL Financial LLC experienced significant failures in its anti-money laundering (AML) program, specifically regarding customer identification and due diligence. The SEC found that the firm failed to timely close accounts with unverified identities and neglected to restrict thousands of high-risk accounts, such as foreign and cannabis-related accounts. These deficiencies constituted a willful violation of Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-8. To resolve these charges, LPL agreed to pay an $18 million civil penalty, a censure, and a cease-and-desist order. The firm also must continue engaging a compliance consultant to review and improve its AML policies and procedures. This settlement was reached without LPL admitting or denying the SEC’s specific findings.
Exhibits & Attached Documents (1)
Extracted insights
- $18.00M $18 million $10M–$100M
- company lpl financial llc
- agency sec’s investigation
- agency sec’s order
- agency Securities and Exchange Commission
- person stacy bogert
- Securities and Exchange Commission Announced Charges LPL Financial LLC
- LPL Financial LLC Agreed to Pay $18 million
- LPL Financial LLC Failed to Close Thousands of high-risk accounts
- Stacy Bogert Said Federal law requires broker-dealers to ascertain the identity of their customers
- LPL Financial LLC Violated Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-8 thereunder
- LPL Financial LLC Agreed to Censure and a cease-and-desist order
- SEC’s order Directs LPL to continue its engagement of a compliance consultant
- SEC’s investigation Conducted by Ada Fernandez Johnson and John Ponyicsanyi
- The case Supervised by Pei Y. Chung and Ms. Bogert
The Securities and Exchange Commission today announced charges against broker-dealer and investment adviser LPL Financial LLC for multiple failures related to its anti-money laundering (AML) program. To resolve the SEC’s charges, LPL agreed to pay a civil penalty of $18 million and to implement improvements to its AML policies and procedures. According to the SEC order, from at least May 2019 through December 2023, LPL experienced longstanding failures in its customer identification program, including a failure to timely close accounts for which it had not properly verified the customer’s identity. Furthermore, LPL failed to close or restrict thousands of high-risk accounts, such as cannabis-related and foreign accounts, that were prohibited under LPL’s AML policies. “Federal law requires broker-dealers to ascertain the identity of their customers and to conduct ongoing customer due diligence to aid the government in its efforts to detect and prevent money laundering,” said Stacy Bogert, Associate Director of the SEC’s Division of Enforcement. “When broker-dealers like LPL fail to comply with their AML obligations, they put the securities markets at risk. Today’s case underscores the importance of complying with applicable regulations in the areas of customer identification and ongoing customer due diligence.” The SEC’s order finds that LPL willfully violated Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-8 thereunder. Without admitting or denying the SEC’s findings, the firm agreed to a censure and a cease-and-desist order in addition to the $18 million penalty. The SEC’s order also directs LPL to continue its engagement of a compliance consultant to review and recommend changes to the firm’s AML policies and procedures. The SEC’s investigation was conducted by Ada Fernandez Johnson and John Ponyicsanyi. The case has been supervised by Pei Y. Chung and Ms. Bogert.
The Securities and Exchange Commission today announced charges against broker-dealer and investment adviser LPL Financial LLC for multiple failures related to its anti-money laundering (AML) program. To resolve the SEC’s charges, LPL agreed to pay a civil penalty of $18 million and to implement improvements to its AML policies and procedures. According to the SEC order, from at least May 2019 through December 2023, LPL experienced longstanding failures in its customer identification program, including a failure to timely close accounts for which it had not properly verified the customer’s identity. Furthermore, LPL failed to close or restrict thousands of high-risk accounts, such as cannabis-related and foreign accounts, that were prohibited under LPL’s AML policies. “Federal law requires broker-dealers to ascertain the identity of their customers and to conduct ongoing customer due diligence to aid the government in its efforts to detect and prevent money laundering,” said Stacy Bogert, Associate Director of the SEC’s Division of Enforcement. “When broker-dealers like LPL fail to comply with their AML obligations, they put the securities markets at risk. Today’s case underscores the importance of complying with applicable regulations in the areas of customer identification and ongoing customer due diligence.” The SEC’s order finds that LPL willfully violated Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-8 thereunder. Without admitting or denying the SEC’s findings, the firm agreed to a censure and a cease-and-desist order in addition to the $18 million penalty. The SEC’s order also directs LPL to continue its engagement of a compliance consultant to review and recommend changes to the firm’s AML policies and procedures. The SEC’s investigation was conducted by Ada Fernandez Johnson and John Ponyicsanyi. The case has been supervised by Pei Y. Chung and Ms. Bogert.