Linsco Private Ledger, which now goes by the name of LPL Financial Services, is at the center of a growing list of arbitration claims and lawsuits in connection to one of its former brokers, Raymond Londo. LPL is accused of failing to supervise Londo, who allegedly scammed millions of dollars from investors in an elaborate Ponzi scheme. Londo’s victims include friends, neighbors and even his own family.
Londo was fired from LPL on March 6, 2008. During his lengthy tenure with the company, however, there was an abundance of customer complaints and red flags regarding Londo’s service and investing strategies. Complaints about Londo’s sales practices also occurred at his former place of employment, Edward Jones.
Despite these warning signs, LPL not only hired Londo but chose to forego taking any action against the financial advisor until his termination in March 2008. By that time, investors in Illinois, Iowa and Wisconsin, as well as elsewhere, had lost millions and millions of dollars to Londo.
Specifically, Londo is accused of borrowing money from the accounts of investors and then promising them a certain rate of return. Under FINRA Rule 2370, it is illegal for registered representatives to borrow funds from their clients. Investors now contend if LPL had exerted proper supervision of Londo, the abuses would never have occurred.
LPL was formed in 1989 through the merger of Linsco Financial Group and Private Ledger Financial Services. Today, the company is considered the fifth-largest brokerage firm in the United States, with nearly 13,000 financial advisors.
Investors are continuing to sue LPL by filing arbitration claims with the Financial Industry Regulatory Authority (FINRA) for the financial losses they incurred in Londo’s Ponzi scheme.