FINRA’s Department of Enforcement investigated Lincoln Financial’s business activities between October 2008 and April 2009, and alleged it failed to establish and maintain an adequate system to monitor, supervise, and control its registered representatives’ solicitation and sale of a hedge fund PPVA. Specifically, FINRA alleged Lincoln Financial failed to provide adequate training or guidance to its registered representatives on the trading strategy or risks of the hedge fund before they solicited and sold the investments. Moreover, FINRA contended Lincoln Financial failed to supervise the suitability of the investment, including whether the investment was suitable for individual customers and whether the investment complied with the firm’s 10% of net worth limit for specific alternative investment products.
Based upon the foregoing conduct, FINRA alleged Lincoln Financial violated several financial industry rules and regulations, including but not limited to, NASD Conduct Rules 2110 and 3010(a), as well as FINRA Rules 2010. NASD Rule 3010(a) requires each member to establish and maintain a system of supervision that is reasonably designed to achieve compliance with applicable securities laws and regulations and with applicable NASD and FINRA Rules. Here, FINRA alleged Lincoln Financial did not provide adequate training to its registered representatives concerning suitability and concentration of customer assets, thereby violating financial industry rules.
Lufrano Law, LLC is a national securities litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. If you suffered investment damage investing in the hedge fund PPVA through Lincoln Financial, you may be able to recover your losses through FINRA arbitration. Our firm only receives a fee if you recover money. Please contact one of our attorneys at (800) 627-2179 to schedule a free consultation.