A former LPL Financial advisor has gotten an 18-month suspension and must pay almost $250,000 for guiding client investments through a company he had set up outside of LPL, FINRA says.
From August 2010 to November 2012, Marc H. Baldinger advised 20 high-net-worth individuals and institutions to invest in government bonds -- steering them to accounts he'd created at two other brokerages, according to recently filed FINRA disciplinary action documents.
The clients invested $12 million in total, and Baldinger received $233,427 as compensation, the documents note.
Baldinger set up holding companies to invest those securities, and did not disclose any of the activities to LPL, the FINRA documents say -- a violation known as "selling away."
Baldinger is no longer registered with FINRA; LPL employed him from 2001 until 2012, according to FINRA BrokerCheck records. LPL spokeswoman Amanda Keating said the firm had no comments on Baldinger's case.
The FINRA documents say Baldinger neither admitted nor denied the findings, but consented to the sanctions. Baldinger's attorney in the FINRA disciplinary hearing, New Orleans-based Stephen H. Kupperman, did not return calls for comment. Messages left at businesses registered with Baldinger in Florida were not returned.
In addition to the suspension, FINRA ordered that Baldinger pay a $10,000 fine and give up the roughly $233,000 he made from the outside investments.
Although the $233,000 is described in FINRA documents as "disgorgement" rather than a fine, it's not clear where the payment will go; FINRA officials noted that when deemed appropriate, the organization can claim the full disgorgement amount and contribute the sum to its own FINRA Investor Education Foundation.
LPL has come under fire recently for repeated compliance woes. Its last two quarterly earnings reports were marred by higher than expected regulatory costs, and it recently discharged high-profile Houston advisor Jeb Bashaw, also for "selling away" violations.
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