Lincoln Financial Advisors Corporation (“Lincoln Financial Advisors”) (CRD#3978) has many different complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors such as yourself.
At the Law Offices of Robert Wayne Pearce, we have investigated Lincoln Financial Advisors, its regulatory and customer complaints, and have also represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors.
Is Lincoln Financial Advisors Corporation in trouble?
Yes, Lincoln Financial Advisors Corporation continues to face significant regulatory and legal problems through 2024 and 2025. The company was hit with new investor lawsuits in state court in January 2025, with plaintiffs claiming the company should have warned them earlier about problems with its variable universal life policies.
The firm, which now operates as Osaic Financial following its acquisition, has dealt with multiple enforcement actions. In February 2024, the SEC issued a major enforcement order finding that Lincoln willfully violated recordkeeping rules by failing to preserve off‑channel communications, resulting in an $8.5 million penalty and requiring a heightened supervision plan to maintain its FINRA membership.
In May 2024, Osaic paid an additional $18 million civil money penalty for the same recordkeeping failures, and in late 2024, FINRA ordered Osaic Wealth to pay over $3 million in restitution to customers who were improperly denied mutual fund sales‑charge waivers.
Individual broker misconduct continues to surface, with a customer filing a $100,000 complaint in October 2024 against a former Lincoln representative, alleging unsuitable recommendations related to oil & gas investments.
A BRIEF OVERVIEW OF SOME OF THE COMPLAINTS AND REGULATORY PROBLEMS LINCOLN FINANCIAL ADVISORS CORPORATION HAS FACED OVER THE YEARS
Beyond the recent issues, the firm has accumulated over 14 FINRA-reported proceedings for supervisory lapses. Historical problems include unsuitable REIT sales exceeding concentration limits, failed oversight of penny stock trading resulting in a $90,000 fine, and unsuitable hedge fund allocations leading to a $175,000 penalty. The pattern shows ongoing compliance challenges spanning multiple years and regulatory jurisdictions.
Can I Sue Lincoln Financial Advisors?
Yes, you can sue Lincoln Financial Advisors if you have experienced financial losses caused by the firm’s misconduct, negligence, or the wrongful actions of its brokers or advisors. However, like most major brokerage firms, Lincoln Financial Advisors generally requires clients to resolve disputes through FINRA arbitration rather than in a traditional courtroom lawsuit.
This means that while you may not be able to pursue a public trial, you still have the right to bring legal claims through the FINRA arbitration process, which is the industry’s standard forum for investor disputes. With the right representation and strategy, investors can maximize their chances of recovering damages against Lincoln Financial Advisors in arbitration.
Investment Losses? We Can Help
Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.
or, give us a ring at (800) 732-2889.
What is Lincoln Financial Advisors?
Lincoln Financial Advisors (CRD#3978) is a registered broker-dealer. It operates as a full-service independent broker-dealer, providing a range of financial products and services to individual investors and financial advisors.
As a registered broker-dealer, Lincoln Financial Advisors is subject to regulations and oversight by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). It is required to comply with industry standards and regulations to ensure the protection of its clients’ interests.
A failure to comply with industry standards by either its brokers or the firm itself can result in disciplinary actions, fines, or other penalties imposed by regulatory authorities.
Examples of Regulatory Problems and Complaints for Lincoln Financial Advisors
Lincoln Financial Advisors’ rapid growth has not been without consequences. There have been approximately 14 state and self-regulatory body disclosure events; that is, final and formal proceedings initiated by a regulatory authority (e.g., a state or federal securities agency like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA) for a violation(s) of investment-related rules or regulations.
In addition, there have been customer complaints filed against Lincoln Financial Advisors for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record.
We have reported and written about these regulatory problems and customer complaints over many years. Lincoln Financial Advisors is a repeat offender: there are over 14 FINRA-reported proceedings citing the firm with one form of supervisory lapses or another.
A Brief Overview of Some of the Complaints and Regulatory Problems Lincoln Financial Advisors Has Faced Over the Years*
Lincoln Financial Advisors has been repeatedly censured, warned, and fined multi-millions of dollars for its own misconduct and failure to supervise its army of financial advisors.* A few of the notable FINRA Sanctions for its Supervisory Failures are below:
Ohio Division of Securities Orders Lincoln Financial Advisors to Cease-and-Desist for Unsuitable REIT Sales
Brief Overview: The Ohio Division of Securities initiated an investigation to which Lincoln Financial Advisors consented that it sold non-traded real estate investment trusts to at least eight clients based on forms containing inaccurate or incomplete information that did not establish that the purchases complied with the concentration limit set forth in the prospectuses.
The Division found that the sales of the REIT securities were without reasonable grounds to determine suitability and that it failed to enforce reasonable supervisory procedures. As a result, Lincoln Financial Advisors consented to the cease-and-desist order.
FINRA Censures and Fines Lincoln Financial Advisors for Failed Oversight of Penny Stock Trading
Brief Overview: Without admitting or denying the findings, Lincoln Financial Advisors consented to the sanctions and to the entry of FINRA findings that it failed to adequately supervise the activities of a registered representative who engaged in unsuitable penny stock trading.
FINRA stated that the firm failed to enforce its written supervisory procedures regarding solicited penny stock transactions, and failed to establish a supervisory system reasonably designed to achieve compliance with applicable securities laws and regulations even though it had a system to monitor low-priced securities but failed to detect the registered representative’s activities.
Specifically, to detect solicited penny stock transactions and to monitor the suitability of low-priced securities transactions despite exception reporting that triggered an alert whenever any penny stock transaction over $5,000 was executed. As a result, the firm was fined $90,000.
FINRA Censures and Fines Lincoln Financial Advisors for Unsuitable Allocation to Hedge Fund
Brief Overview: Without admitting or denying the findings, Lincoln Financial Advisors consented to the sanctions and to the entry of FINRA findings that it failed to establish and maintain adequate supervisory systems and procedures reasonably designed to achieve compliance by its registered representatives with their suitability obligations in recommending to 25 customers that they invest in a hedge fund.
According to FINRA, registered representatives in two of the firm’s branch offices recommended that customers invest in a private placement variable annuity. Soon after, the firm approved a hedge fund for investment by the firm’s customers and was added as a sub-account by the private placement sponsor. The hedge fund employed a complicated options trading strategy whereby it earned revenue exclusively by writing a combination of uncovered options.
This strategy exposed customers to a high degree of financial risk. Based on these recommendations, 25 customers invested a total of approximately $11.7 million in the hedge fund. Although the firm conducted suitability reviews concerning a customer’s initial sub-account allocation, the firm did not conduct a similar review when customers re-allocated their investments to the hedge fund. As a result, the firm was censured and fined $175,000.
Massachusetts Securities Division Fines Lincoln Financial Advisors for REIT Sales Exceeding Concentration Limits
Brief Overview: Without admitting or denying the findings, Lincoln Financial Advisors, through its registered representatives, sold nontraded real estate investment trusts more than Massachusetts heightened concentration limits imposed by the prospectus. The Massachusetts Securities Division required the firm to certify in writing to the division a report addressing a comprehensive review of Lincoln Financial Advisor’s policies and procedures for the sale and approval of all alternative investments to Massachusetts residents. A $100,000 fine was paid because of the consent order.
New Hampshire Bureau of Securities Regulation Censures Lincoln Financial Advisors for Mismarked Order Confirmations
Brief Overview: The New Hampshire Bureau of Securities Regulation initiated an investigation in which it was uncovered that a registered representative inaccurately marked several order tickets relating to one customer account.
Specifically, the customer purchased stocks through respondent’s agent and confirmations were mismarked as solicited when they should have been marked unsolicited, and marked unsolicited when they should have been marked solicited. In addition, the Bureau found the firm failed to keep proper records of the confirmations. Apart from the censure, the Lincoln Financial Advisors was ordered to pay restitution to the client and investigative costs.
*Above are only some of the regulatory disciplinary actions filed against Lincoln Financial Advisors by FINRA. NASAA and other state securities regulator investigations and enforcement actions account for another 9 BrokerCheck disclosures.
Why Does Lincoln Financial Advisors Have So Many Regulatory Problems And Customer Complaints?
Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses.
They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.
The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters.
The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers.
Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission.
There may be no one onsite to detect forgeries of clients’ signatures on documents, the placement of inaccurate information about a client’s investment objectives and financial condition to document the suitability of a particular investment recommendation.
Oftentimes there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices.
These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms than the traditional brokerage firms with branch offices with on-site managers and compliance personnel.
How to File an Official Complaint Against Lincoln Financial Advisors or one of its brokers with FINRA
If you suffered financial losses because of misconduct by Lincoln Financial Advisors (CRD# 3978)—now operating under Osaic Financial—you are not alone. Over the years, the firm has faced repeated FINRA and SEC sanctions, state regulatory actions, and customer complaints tied to unsuitable investment recommendations, supervisory failures, and compliance violations.
From multimillion-dollar penalties for recordkeeping failures to restitution orders for denying mutual fund fee waivers, Lincoln’s history shows a troubling pattern of negligence and misconduct that has harmed investors nationwide.
At the Law Offices of Robert Wayne Pearce, P.A., our investment fraud attorneys have over 45 years of experience representing clients in FINRA arbitration against brokerage firms like Lincoln Financial Advisors. We understand how these firms operate, the tactics they use to deny responsibility, and—most importantly—how to hold them accountable.
If you are considering filing a FINRA complaint or arbitration claim against Lincoln Financial Advisors or one of its brokers, our team can guide you through the process and fight to recover the compensation you deserve.
These cases can be extremely complex, and so having the support of a reputable attorney who is experienced in recovering investment losses for investors is key to your success. Many customers make the mistake of contacting Lincoln Financial Advisors without representation with an attorney about their complaints and have their complaints denied.
Related Read: Can You Sue Your Brokerage Firm?
Investment Losses? We Can Help
Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.
or, give us a ring at (800) 732-2889.
Consult With An Attorney Who Recovers Investment Losses Caused By Lincoln Financial Advisors Today!
The investment loss attorneys at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 45 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with Lincoln Financial Advisors cases, and Attorney Pearce is committed to seeing that those responsible for the losses you have suffered are held fully accountable.
Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.