By: Courtney Werning
The Ohio Division of Securities sanctioned Uvest Financial, Inc. concerning
claims that Uvest improperly provided brokerage and investment advisory
services for unregistered investment advisers in violation of the Ohio
Securities Act. The Division of Securities fined the firm $750,000. Uvest
is a subsidiary of LPL Financial, the largest independent broker-dealer
in the United States. Fourteen other states' securities departments
joined Ohio in bringing disciplinary proceedings against Uvest for violations
of their securities and investor protection acts.
Bankers Life and Casualty Company is a life insurance company located in
Illinois that has never been registered as a broker-dealer or investment
adviser. The Division alleged that Bankers Life entered into an agreement
with Uvest where Bankers Life insurance agents who became licensed as
registered representatives or investment advisers of Uvest would be allowed
to provide brokerage and investment advisory services out of the insurance
firm's branch offices. The Division alleged that none of the representatives
or advisers had the appropriate licensing to do so.
Under the agreement with Uvest, Bankers Life agents participated in a number
of securities-related activities. Evidence uncovered during the investigation
showed that Bankers Life screen prospective securities agents, trained
new securities agents, monitored and attempted to increase securities
production of agents, worked with UVEST to determine the compensation
paid to the agents, and selected the product offerings available to them.
Under the Ohio Securities Act, a person may not act as a broker-dealer
of investment adviser in Ohio unless registered, exempt from registration,
or a federal covered investment adviser. By engaging in the conduct described
by the Division of Securities, Uvest materially aided an illegal course
of conduct in violation of Ohio Securities Act for a period of over six years.
According to the North American Securities Administrators Association (NASAA),
multiple state securities regulators also reached a settlement with Bankers
Life, who paid $9.9 million to be disbursed among the states where its
dual agents were located. As part of the settlement, Bankers Life agreed
that it will refrain from all brokerage activity and to terminate its
membership with FINRA until 2015.