Stock brokerage contracting
LPL Ends Broker Self-Supervision:: Home About Us Our Attorneys William S.
Kantas Ryan Cook Tanya C. Edwards David Miller Luis J. LPL Ends Broker Self-Supervision One of the basic tenets of securities industry regulation is that brokers, the individuals who are actually interacting with clients on a day to day basis and placing trades for those clients, are supposed to be supervised in order to help ensure that the brokers comply with the relevant laws and regulations.
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While the system is by no means perfect, it is still a significant protection that customers are supposed to have to help shield them from securities fraud. Many of the brokers employed by LPL are self-employed one man shops, either as a result of their own desire to do business that way or because no major brokerage firm would hire them.
Essentially, these one man shops were permitted to hold two different employment titles: So the broker was supposed to enact trades for his clients, then go back through and review those trades to make sure that he had acted appropriately with regard to that trade.
The problems with this are obvious, as has been the results. As a result of these problems, LPL has recently given public statements that it is getting rid of the ability of its brokers to act as their own supervisors.
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Instead, brokers who had formerly worked that way have three choices. Third, they can leave and try to get hired on someplace else.
None of these options are going to be particularly attractive to the brokers who have gotten used to doing business unsupervised. Moving elsewhere might not be any easier, as the number of firms which permit this sort of self-supervision is getting to be few and far between, so finding a similar arrangement elsewhere may not be possible.
Of course, all of this is nothing but good for LPL customers. The whole reason that these changes are coming is that LPL customers have been repeatedly mistreated and improperly advised, and, without proper supervision, their brokers got away with misconduct for much longer than they would have had they been properly supervised.
LPL Ends Broker Self-Supervision :: US Independent Contractor Lawyer Shepherd Smith Edwards & Kantas LTD LLP - Serving the USA - Texas, California, New York, Florida, Arizona
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