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.