LPL Financial Fined Following AML Complaint
In response to a complaint filed by the SEC, LPL Financial has agreed to pay more than $4.8 million dollars in fines and restitution to the Municipality of Mayaguez, Puerto Rico in connection with antifraud violations by Eugenio Garcia Jimenez, Jr., an unregistered investment adviser not affiliated with LPL.
According to the order issued by the SEC:
While not affiliated with LPL, Garcia opened an account with LPL to further a scheme to defraud with the Municipality of Mayaguez. LPL failed to follow its own procedures in its Customer Identification Program (CIP) when allowing Garcia to open and operate the investment account. Had LPL conducted the appropriate due diligence according to internal policy, it would have discovered conflicting and suspicious information regarding the account and its registered address. Through this account with LPL, Garcia was able to misappropriate millions of dollars of taxpayers money from the Puerto Rican city, and launder the ill-gotten gains.
LPL agreed to pay more than $4 million to reimburse losses from by the Municipality of Mayaguez. LPL also agreed to pay approximately $140,000 in disgorgement, a fine of $750,000, and a censure of its firm.