The Brokercheck Report further states that LPL Financial “Discharged” Mr. Tunink for “Failed to disclose and receive prior approval for loans from customers; and settled a customer complaint away from the Firm.” Mr. Tunink had been registered with LPL as a securities representative from 2021 to September 2025, and previously was registered with Avantax Investment Services from 1996 to 2021.

Financial advisors who are registered with FINRA are generally prohibited from taking loans from their customers pursuant to FINRA Rule 3240. The limited exceptions in the rule include loans from family members, loans from financial institutions, and the borrowing or lending arrangement is based on a bona fide business relationship outside of the broker-customer relationship. However, even in those limited exceptions, the representative’s FINRA firm must be notified of the loan and approve the loan.

The Securities Fraud lawyers at Greco & Greco have decades of experience representing harmed investors from across the country for claims related to improper loans and broker theft, as well as claims for suitability, securities fraud, failure to supervise, negligence, violations of Regulation Best Interest, and breach of fiduciary duty. If you have had your trusted investment advisor solicit a loan from you or otherwise wrongfully take control of your funds and savings, please contact Scott Greco for a free attorney consultation.

Background: LPL Financial LLC

LPL Financial LLC, a long-standing member of FINRA since 1973, operates as a significant player in the securities industry and is one of the larger “independent” FINRA firms. Headquartered in Fort Mill, South Carolina, LPL boasts a considerable network, with over 27,000 registered representatives across more than 18,000 branch offices. Most advisors who are registered with independent firms operate out of small one or two advisor offices. Although independent firms have the same supervisory duties and more traditional firms with big branch offices, proper supervision does not always occur.

Overview of Allegations

The allegations against LPL Financial LLC span a significant timeframe, from January 2012 to November 2022. Among the key alleged violations cited by FINRA include the firm’s failure to reasonably supervise transactions conducted directly with product sponsors on behalf of customers. This lack of oversight led to approximately 830,000 transactions not being reported, raising concerns about potential sales practice violations and unsuitable recommendations.

Moreover, LPL’s shortcomings extended to inaccurate information provided to customers regarding switch transactions, where approximately 11,300 letters were found to contain misleading fee information. This negligence in supervision and communication not only violated FINRA rules but also compromised the interests of customers.

Furthermore, the firm failed to establish a proper supervisory system for recommendations involving publicly traded securities of business development companies (BDCs which are considered “alternative” investments), leading to potential overconcentration in Listed BDC investments for certain customers. The AWC stated: “LPL also failed to have a reasonable supervisory system to ensure the collection of information for its direct business customers’ investment profiles—such as the customers’ ages, investment time horizons, and liquidity needs—that was relevant for making suitability determinations. LPL relied on its representatives to collect such information by completing new account forms for direct business transactions. However, the firm did not take steps to ensure that representatives completed the new account forms.”

Consequences and Sanctions

In response to these violations, LPL Financial LLC has consented to several sanctions imposed by FINRA, including a censure, a substantial fine of $5.5 million, and restitution totaling $651,374.51 plus interest. Additionally, the firm is required to undertake remedial actions within a specified timeframe to address the identified issues and ensure compliance with regulatory standards.

Contact a Securities Fraud Lawyer if you may have a claim.

If you think you may have a potential claim for unsuitable investments or failure to supervise against a financial advisory firm such as LPL, please contact Scott Greco for a free attorney consultation about your case.

Background

The AWC against LPL Financial LLC was the result of a failure to reasonably supervise the transmittal of customer funds, which enabled two firm registered representatives to convert substantial sums of money for their personal use. The findings by FINRA in the AWC are outlined below:

1. Improper Transfers of Customer Funds: One representative persuaded nine customers, five of whom were seniors, to issue checks from their brokerage accounts payable to an undisclosed entity controlled by the representative. Instead of investing these funds, the representative used them for personal and business expenses, totaling approximately $550,000.
2. Wire Transfers for Personal Use: Another representative convinced four customers, three of whom were seniors, to wire money from their firm accounts to an outside business he controlled, purportedly for investment purposes. However, he misappropriated around $675,000 of their funds for personal use. Furthermore, this representative electronically forged a senior customer’s signature on a wire transfer form to transfer approximately $1.2 million for his personal real estate purchase.
3. Lack of Reasonable Supervisory Systems: LPL Financial LLC failed to establish a reasonable supervisory system to review transmittals of customer funds to third parties by wire or check. Their automated tool for reviewing checks only examined the second line of the recipient’s address, missing discrepancies in the address on the fourth line. Additionally, the firm did not monitor transmittals from unrelated customer accounts to the same third party.
4. Failure to Respond to Red Flags: The firm did not adequately respond to red flags indicating potential conversion/theft, such as all third-party checks being mailed to the undisclosed entity and flagged wire transfers. They also failed to detect instances of signature forgery or falsification and did not verify questionable transfers adequately.
5. Unauthorized Electronic Signatures: At least 50 firm representatives electronically signed customers’ names on over 1,000 firm documents without proper verification.

Penalties

As a result of these violations, FINRA imposed significant sanctions on LPL Financial LLC:

1. Censure: The firm was officially censured by FINRA.
2. Financial Penalty: LPL Financial LLC was fined a substantial amount of $3,000,000.00.
3. Restitution: The firm was ordered to pay $100,000 plus interest in restitution to affected customers who suffered financial losses due to the actions of the two representatives.
4. Remediation and Supervision: LPL Financial LLC must undertake a review to identify and rectify any additional improper transfers of customer funds, establish a supervisory system designed to monitor customer fund transmittals and electronic signatures to ensure compliance with securities laws and FINRA rules.

This disciplinary action against LPL Financial LLC underscores the importance of robust supervisory systems, diligent monitoring, and quick response to red flags.

Here are some key takeaways for FINRA securities firms:

1. Enhance Supervision: FINRA Broker-Dealers must implement robust supervisory systems that can detect and prevent unauthorized transfers of customer funds.
2. Vigilance with Red Flags: Red flags indicating potential misconduct should never be ignored. Firms must respond promptly and thoroughly investigate any suspicious activity.
3. Authentication and Verification: Verification procedures for electronic signatures and fund transfers must be stringent to prevent forgery and misappropriation.
4. Regular Audits and Reviews: Regularly audit and review transactions and documents to ensure compliance and prevent unauthorized actions.

Greco & Greco’s securities fraud lawyers have extensive experience pursuing legal recovery of monies stolen by customers’ financial advisors. Although criminal advisors may not be able to repay the monies they have stolen, their securities firms bear responsibility for the fraud and theft under multiple legal theories. This includes liability by the firm’s for the actions of their agents related to investments, as well as direct liability by the firms for supervisory failures and failures to follow up on red flags as discussed herein. If you have been defrauded by your financial advisor or firm, please contact Scott Greco for a free attorney consultation.