Alex Padalka
Jul 25, 2022
LPL Financial, along with Financial Resources Group Investment Services, faced accusations of concealing the actions of a registered representative who engaged in unauthorized trading in clients’ accounts.
A Financial Industry Regulatory Authority arbitration panel has ruled in favor of two investors who alleged that LPL Financial and another investment advice firm failed to protect them from the actions of a broker. Myriam Rodriguez Gonzalez and Juan Angel Ibarra Rodriguez filed a claim against LPL and Financial Resources Group Investment Services in November 2020 alleging fraud, breach of fiduciary duty and unauthorized accounts and trading, among other violations, according to an arbitration award document published earlier this month.
The accusations were in connection to what Gonzalez and Rodriguez claimed was LPL's attempt to “intentionally conceal” unauthorized changes to account and investment documents by an unnamed former registered representative that allowed for unauthorized trading and use of their funds, Finra says.
The claim also names Edward Bruce Miller and Antonio Reyna.
Miller has been registered with LPL since 2010 and with Financial Resources Group since 2015, while Reyna was with LPL from 2008 until 2014, when he left for Securities America, according to BrokerCheck.
Gonzalez and Rodriguez eventually sought around $3.36 million in total damages, Finra says. The defendants asked that the arbitration panel dismiss the claim with prejudice and award any relief they deemed appropriate, according to the award document.
Earlier this month, the arbitrators ordered LPL and FRG to pay Gonzalez and Rodriguez $1.66 million in compensatory damages, around $850,000 in lawyers’ fees and close to $69,000 in costs, Finra says.
In addition, the panel recommended the expungement of the matter from the records of Reyna, who had filed a motion for expungement, on the grounds that his “duties did not include the supervision of the subject account and therefore, the Claimant's allegation of negligent supervision is false and clearly erroneous,” according to the document.
The arbitrators dismissed all other claims, Finra says.
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