Lincoln Financial Network

Background Information

Lincoln Financial Network operates Lincoln Financial Advisors Corp. and Lincoln Financial Securities Corporation, both broker-dealers which are affiliates of Lincoln Financial Group. Lincoln Financial Advisors (LFA) markets itself as a fee-based financial planning firm headquartered in Fort Wayne, Indiana. Lincoln Financial Securities Corporation (LFS) promotes its long-term financial solutions to individuals and small businesses. LFS is headquartered in Concord, New Hampshire.

Regulatory Violations

Lincoln Financial Advisors Corp and Lincoln Financial Securities Corporation have been the subject of many regulatory investigations, some which resulted in disciplinary actions by regulators.

REITs Oversold in Massachusetts

LFA was fined $100,000 by Massachusetts Securities Division in 2013 for selling non-traded REITs in excess of Massachusetts heightened concentration limits. LFA also agreed to offer restitution to customers that were sold those non-traded REITs. LFA will also conduct a review of their policies and procedures for the sale of alternative investments to Massachusetts residents.

FINRA Fines and Sanctions – Lincoln Financial Network

Lincoln Financial Advisors Corporation (CRD #3978, Fort Wayne, Indiana) submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $950,000 for maintaining a revenue sharing program in which participating mutual fund complexes received preferential treatment in return for a fee. Approximately $3.18 million in mutual fund portfolio brokerage commission were directed to LFA by six participants in the program. This is a violation of FINRA rules. (FINRA Case #EAF0400860002)

Lincoln Financial Securities Corporation (CRD #3870, Concord, New Hampshire) submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $525,000 for failing to establish and maintain adequate supervisory systems and written procedures or failing to enforce its written procedures with regard to variable annuity redemptions when proceeds were used to purchase unregistered products sold outside LFS. In addition, among other violations, LFS failed to enforce its policies designed to ensure that all of its representatives were properly licensed in the states where they conducted securities transactions for customers. (FINRA Case #2009016302501)

Lincoln Financial Securities Corporation (CRD #3870, Concord, New Hampshire) submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $175,000 for failing to establish and maintain a supervisory system and establish, maintain and enforce written supervisory procedures reasonably designed to supervise its registered representatives and detect and prevent fraudulent activity. Specifically, LFS failed to detect a registered representative’s fraudulent solicitation and sale of investments in a purported bond fund. This activity turned out to be a Ponzi scheme operated by the representative which commenced approximately 18 years before his association with LFS and raised approximately $34 million. Had LFS supervisory system been enforced, they would have not hired the representative in the first place; as he was hired knowing that he had an “open inquiry” by securities regulators in his home state. This is a violation of supervisory procedures in place at the time. (FINRA Case #2010025074101)

FINRA Arbitrations

Lincoln Financial has been the subject of several FINRA arbitration claims which have resulted in significant awards to claimants.

One such claimant was awarded over $4.4 million finding Lincoln negligent in not preventing a representative of Lincoln from “selling away” and making material misstatements and/or omissions regarding the sale of these securities. The panel found that claims for failure to supervise, breach of fiduciary duty, violations of FINRA conduct rules and common law respondent superior are all included and form a part of the negligence of Lincoln.

Another FINRA arbitration panel awarded the claimant over $1.7 million in compensatory damages and interest for breach of contract, negligence, breach of fiduciary duty, unsuitability, misrepresentation and omission of fact, failure to supervise and unauthorized transactions related to investments in exchange-traded funds, hedge funds and private equities.

Silver Law Group

Silver Law Group is a nationally recognized securities and investment fraud law firm with Martindale-Hubbell® Peer Review Ratings™ “AV” rated lawyers that handle all securities arbitration matters on a contingency fee basis. The Law Firm, at no cost to investors will review account activity and account statements to determine whether there was any misconduct, whether there are damages and the legal causes of action. We investigate all sales practice violations, while taking into consideration the investor’s age, investment background, and the relationship between the investor and the brokerage firm and its financial advisor. According to securities industry rules and regulations, unsuitable investment advice, securities concentration, fraudulent misrepresentations and omissions of material facts, breach of fiduciary duty, conflicts of interest, variable annuity switching are among the causes of action that may be available to investors in claims for damages against brokerage firms and their financial advisors in a securities arbitration claim filed with the Financial Industry Regulatory Authority (FINRA). We represent investors in FINRA arbitration claims on a contingency fee basis.

To learn more call us at (954) 755-4799 or Toll Free at (800) 975-4345

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