LPL Financial LLC. Fined by the State of Oregon

November, 2011:

Senior Citizen Alert – Private Placements and/or Direct Investments:

If you are the sibling, child, grandchild, friend or professional for a senior citizen, please pay particular attention to the following post.  The Oregon Department of Consumer and Business Services recently entered into a consent order with LPL Financial and fined the company $100,000 for failing to properly supervise one of its brokers. LPL Financial is a nationwide brokerage firm with branch offices throughout Oregon.

Jack Kleck, branch manager for LPL Financial in La Grande, sold investments in high-risk oil and gas partnerships to nearly three dozen Oregon residents, including many elderly people. The partnership interests were not suitable investments for Kleck’s clientèle, given their age and investment objectives.

“This case underscores the importance of investing with individuals and firms licensed by the State of Oregon,” said David Tatman, administrator of the department’s Division of Finance and Corporate Securities (DFCS). “The state examines licensed brokerage firms and the division will take appropriate action against firms that do not comply with the law.”

The division found LPL Financial, a licensed firm in Oregon, violated several securities laws, such as failing to diligently supervise the actions of its broker and failing to ensure company policies and procedures were enforced. Many of Kleck’s clients were in their 70s and 80s, and some were not capable, due to poor health, of making sound investment decisions.