BOSTON (Reuters) - Massachusetts' top securities regulator said on Monday he ordered LPL Financial Holdings Inc to offer about $2.5 million in restitution to older investors over the sale of unsuitable insurance products.
The order also fines LPL $975,000 and requires disgorgement of $208,000 in commissions on the sales.
The order from Secretary of the Commonwealth William Gavin said one of LPL’s advisers misrepresented clients’ ages and net worth to make them appear more suitable for buying variable annuity investments. LPL also failed to detect various red flags and discrepancies which should would have prevented the harm, according to a statement from Galvin's office.
“With the risk of the Department of Labor’s Fiduciary rule being dismantled, it is crucial that the states step in to fill this void,” Galvin said. “The Securities Division and I intend to do that by vigilantly policing this area to protect retirees, and I would also caution Washington not to dismantle Labor’s rule and abandon mom and pop investors."
On the campaign trail, U.S. President Donald Trump had said that "70 percent of regulations can go," and one of his top advisers, Anthony Scaramucci, told Reuters the fiduciary rule "would likely be stopped."