Mark Lamkin says everything had gone well for years while his independent firm managed roughly $450 million through an affiliation with LPL Financial.
Then came his discovery that a pair of his associates were placing clients in allegedly unsuitable private investments. That set in motion a series of events eventually leading to the
Meanwhile, the suit alleges, some of his former associates
"In the last five years, I had to start completely over because of LPL," said Lamkin, who is back to managing close to $250 million through an affiliation with the independent broker-dealer and advisory firm Calton & Associates.
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"That book represented 18 years of my life's work," Lamkin added. "I probably could have sold it and retired on it. That's why I'm upset."
Lamkin's suit accuses LPL, the largest independent broker-dealer in the U.S., of four counts of wrongful interference with clients, advisors and others. Lamkin's lawyers, John Cox and Scott Spiegel of Louisville, Kentucky-based Lynch, Cox, Gilman & Goodman did not respond to requests for comment; nor did LPL.
Bill Singer, a longtime securities lawyer and recently retired author of the
"What we ultimately have is a marriage of convenience," Singer said in an email. "But, as with many marriages, when discord arises, we tend to have unsavory divorces."
He said many firms in situations similar to Lamkin's think their independent status means they can leave their affiliated broker-dealer with little resistance.
"The reality is often far different," Singer said, "and all the more so when a 'team' that operated the introducing firm has a division in its own ranks and some folks want to leave and others want to stay."
Lamkin, who was with LPL from 2001 to 2018, said all was going well with the independent broker-dealer until he learned that
Don Woods has a total of 14 disclosures on his record, most of them related to allegations about unsuitable investments. Jason Woods has 9 disclosures alleging similar violations.
Lamkin, whose lawsuit was first reported by the industry publication Financial Advisor IQ, said he fired the two after discovering the alleged improper activity. He soon began working with outside legal counsel to have the affected clients reimbursed for any losses. At one point, he said, LPL representatives asked him if he was "negotiating against us" and said they'd prefer to settle any customer disputes.
"Then they subjected me to three audits in one year," Lamkin said. "They hired an ex-FBI agent to rip up my office because they were going to find something. And all this when not a year before they gave me a six-figure bonus to stay on."
Lamkin was discharged by LPL on Aug. 17, 2018, after he was found to have not properly reported loans received from a client. Lamkin's lawsuit states the loan had been arranged according to advice from LPL and that LPL had assured him the loan didn't have to be reported.
"These allegations have been conjured up by LPL as a subterfuge, to justify its efforts to damage my reputation and, as a result, take my customers," Lamkin wrote on his
While all this was going on, according to the suit, Lamkin was looking to move his practice elsewhere. Lamkin, the lawsuit states, received repeated assurances from three of his former associates — Bruce Lindsay, Jonathan Upton and Gregory Smith — that they would stay with him through the transfer.
His suit accuses LPL of "creating an atmosphere of fear and intimidation" that made the three unwilling to depart despite what they had said. It also alleges that Lindsay, Upton and Smith were encouraging Lamkin to leave "while preparing to steal all of [Lamkin Wealth Management's] business."
Lamkin said he is separately suing the three in state court and is also pursuing a claim against LPL through FINRA. Lindsay, Upton and Smith are all listed as representatives of
Lamkin said two of his other associates were discharged by LPL shortly after he was. Christopher "Neil" Watkins was let go in November 2018 after being accused of helping distribute advisory fees to an unregistered person. In a response on his
Waktins is now listed as a representative of Magnate Advisory Services, an investment advisory in Louisville. Attempts to reach him at that firm were unsuccessful.
Doug Obradovich, who still works with Lamkin, was also let go from LPL in November 2018 after being accused of helping to distribute commissions to a nonregistered person. Obradovich denied the allegations on his
Lamkin said LPL meanwhile is seeking reimbursement for money it claims he still owes on a promissory note from the firm. Lamkin said the amount in question in that dispute is about $600,000.
Lamkin's own BrokerCheck page lists seven disclosures, most of them having to do with his time at LPL. He settled his dispute over the unreported loans in March 2020 for $7,500. The loans, coming to nearly $1.3 million, were made to Lamkin, his wife and an LLC of which he was a member, according to BrokerCheck.
In May 2019, Lamkin agreed to pay $1,000 to settle allegations brought by Kentucky securities regulators that he had conducted business in the state without being properly registered. Lamkin states in his lawsuit that the disputed transactions occurred when he was in the midst of leaving LPL and was actually still in control of his practice. In December 2000, he resigned from PNC Brokerage after he failed to report to the firm management that an associate had accessed his bank account without his knowledge.
Lamkin said he believes the lesson from his case is that independent advisors should be careful about which firms they choose to affiliate with.
"I love the independent model, and I think it's fantastic," Lamkin said. "But you better check the record of the company you choose to work with."
