Brokerage Firm Review: Lincoln Financial Advisors Corporation

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.

If you believe you have a claim against Lincoln Financial Advisors, you should strongly consider hiring an investment fraud lawyer. You should not wait until it’s too late to file a claim. The Law Offices of Robert Wayne Pearce, P.A., offers free consultations. 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.

Can I Sue Lincoln Financial Advisors?

If you’ve lost money caused by Lincoln Financial Advisors and/or its employees’ misconduct then the answer is, YES, you can sue Lincoln Financial Advisors, but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding. Attorney Robert Wayne Pearce has over 40 years of personal experience in FINRA arbitration proceedings and knows very well how you can not only sue Lincoln Financial Advisors in FINRA arbitration proceedings but WIN that arbitration. The easiest way to know if you have a viable case against Lincoln Financial Advisors is to call Attorney Pearce at our office at 800-732-2889.

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

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.

Lincoln Financial Advisors Has Many Different Regulatory Problems 

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 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 $150,000.

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.

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.

Did Lincoln Financial Advisors Advisor Misconduct Cause You Investment Losses?

When financial advisor misconduct has caused you to lose substantial value to your investment accounts, you have the right to seek reimbursement from the responsible parties. Lincoln Financial Advisors is responsible like any employer for its financial advisors acts and omissions. In addition, it has an independent duty to supervise its stockbrokers and investment advisors. 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.

Get A Free Consultation

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 40 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.

Robert Wayne Pearce

Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 40 years and has helped recover over $170 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.

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