SEC fines LPL $275,000 over data protection

David Benyon
01 Oct 2008

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Regulation

WASHINGTON, DC - US regulator the Securities and Exchange Commission (SEC) has issued a $275,000 fine to New York-based financial services firm LPL Financial over failure to protect clients' data.

The ruling comes in support of Regulation S-P, which requires broker dealers and SEC-registered investment advisers to properly safeguard their customers' information. An SEC investigation into the hacking of customer accounts revealed the firm's negligence. Criminals hacked into 68 customer accounts at LPL between July 2007 and early 2008. Having gained access, they placed or attempted to place 209 unauthorised securities trades worth more than $700,000 in the accounts.

In addition to the fine, LPL has now offered to institute remedial measures and to enlist the services of an independent consultant to review policies and procedures.

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