Lincoln Investment Planning LLC a brokerage firm headquartered in Fort Washington Pennsylvania has been censured by Financial Industry Regulatory Authority (FINRA) based upon the firm’s consent to findings that it failed to supervise the firm’s mutual fund sales practices which caused customers to be excessively charged. Letter of Acceptance Waiver and Consent No. 2017053723701 (Sept. 5, 2018).
According to the AWC, from January 1, 2011 to June 27, 2018, the firm did not identify or apply the sales charge waivers that had been available for customers when mutual fund transactions were executed. Apparently, Lincoln Investment Planning was dependent on financial advisors to identify when the sales charge waivers should be applied; however, those advisors had no written supervisory procedures to turn to in order to know how to identify when the waivers should be applied. The AWC also stated that the sales charges waivers were identified within prospectuses; however, the firm did not have written supervisory procedures calling for the prospectuses to be consulted by the advisors to make sales charge waiver determinations.
Moreover, the AWC stated that the Lincoln financial advisors were insufficiently trained concerning the sales charge waiver availability. And the firm neglected to monitor mutual fund purchases to determine whether the waivers had not been applied.
Evidently, an investigation was conducted by Lincoln into its failure to apply sales charge waivers. After having conducted a second review, FINRA was notified by Lincoln that 2,753 customer accounts contained purchases of mutual fund shares where the sales charge waivers were not provided to the customers. Consequently, customers were excessively charged a total of $1,167,689.00. FINRA found that Lincoln’s failure to supervise in this respect was violative of FINRA Rules 2010 and 3110.
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