FOR IMMEDIATE RELEASE
January 12, 2016
Contact: Stephanie Fleming, (573) 526-0949

Kander Reaches Settlement with LPL Financial


Jefferson City, Mo. — Secretary of State Jason Kander today announced a settlement with LPL Financial LLP in connection with an investigation of LPL’s failure to implement an adequate supervisory system regarding its sale of non-traded Real Estate Investment Trusts (REITs) and its failure to enforce its written procedures regarding those sales. Under the terms of the agreement, LPL will return funds to Missourians that lost money by investing in these REITs.

“My office will continue going after everyone from local scam artists who rip off their neighbors to global corporations who deceive hundreds or thousands of Missourians into improper investments,” Kander said.

Under the terms of the consent order, Boston-based LPL agreed to cover losses for all non-traded REITS sold by the firm from Jan. 1, 2008, through Dec. 31, 2013, that violated state limits, LPL’s own guidelines or limits specific to each non-traded REIT. LPL specifically identifies non-traded REITs as a form of “alternative investment,” because they typically carry significant investor risk due to long holding periods, high fees and a lack of liquidity.

Additionally, LPL agreed to retain an independent third party to review and verify its executed sales transactions for violations during this period, believed to be more than 2,000 nationwide. LPL will make offers of remediation to affected Missouri investors upon completion of the third-party review.

The order also requires LPL to pay a fine of $38,522.75 to the Missouri Investor Education and Protection Fund as part of the $1.425 million multistate settlement. Missouri is a member of the North American Securities Administrators Association (NASAA), the organization responsible for forming the task force that carried out the investigation. The investigation found that LPL failed to implement a supervisory system that complied with state law.

Before making an investment decision, Missourians are encouraged to call Kander’s Investor Protection Hotline at (800) 721-7996 or visit www.MissouriSafeSavings.com.

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Visit www.sos.mo.gov to learn more about the Office of the Missouri Secretary of State.