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LPL Advisor Charged over Annuity Sales

By Alex Padalka December 2, 2016

Massachusetts’ top securities cop is going after an advisor and his firm for reselling annuities to retirees to churn commissions, Reuters writes.

Secretary of the Commonwealth William Galvin accuses LPL Financial’s Roger Zullo of making $1.8 million in sales commissions from the same annuity over just one three-year period, according to the newswire. Every six or seven years, Zullo allegedly resold the high-commission variable annuity, Polaris Platinum III, to retiree clients, Reuters writes.

Zullo also stands accused of lying to his LPL supervisors as well as faking his clients’ suitability profiles, according to the newswire. But Galvin is also going after the company for failing to supervise Zullo, calling its compliance review program “paper-thin,” Reuters writes.

The regulator is seeking to revoke the broker’s registration and wants restitution from LPL and Zullo for the clients affected, according to the newswire.

LPL has landed in the crosshairs of regulators as a result of its brokers’ misbehavior in the past. Just last month, the SEC barred a former LPL broker for excessive trading of mutual funds.

Galvin’s office, meanwhile, has gone after the firm and its brokers for senior exploitation in the past. Last summer, the regulator charged the firm $250,000 for letting its brokers use bogus designations on their business cards to dupe seniors.