X0405 TA-1/A 0001007444 XXXXXXXX 084-05637 true LIVE SEC LPL Financial LLC /TA LPL Financial CORP /TA 008698 4707 Executive Drive San Diego CA 92121-3091 Y 75 STATE STREET, 22ND FLOOR BOSTON MA 02109 800-877-7210 N N N N Other LPL Holdings, Inc. 04/01/1989 Managing Member Parent Company Mark Robert Helliker 08/01/2008 Managing Director Client Support Services 08/01/2015 Robert Joseph Moore 05/01/2012 President and Director Advisor & Institution Solutions 03/16/2015 Sharyn J. Handelsman 01/01/2014 Managing Director Chief Compliance Officer, Brokerage 06/12/2015 George Burton White 11/01/2007 Managing Director Investor & Investment Solutions Dan Hogan Arnold, Jr. 05/01/2012 President & Chief Executive Officer President & Chief Executive Officer David Paul Bergers 08/01/2013 Managing Director Legal and Government Relations 06/09/2017 Michelle Oroschakoff 09/01/2013 Managing Director Chief Legal & Risk Officer Paul Middlemiss 05/01/2011 Executive Vice President Chief Compliance Officer, Advisory 11/21/2016 John Andrew Kalbaugh 03/01/2010 Managing Director & Divisional President National Sales & Consulting Joan Dominy Khoury 05/01/2012 Managing Director Chief Marketing Officer 06/01/2014 Sallie Rebecca Larsen 05/01/2012 Managing Director Chief Human Capital Officer Victor Peter Fetter, III 12/01/2012 Managing Director Chief Information Officer 06/23/2017 Mark Stephen Casady 12/01/2005 Chairman of the Board and CEO Chief Executive Officer 01/03/2017 William P. Morrissey, Jr. 04/01/2014 Managing Director & Divisional President Business Development Stephanie Leigh Brown 03/01/2004 Managing Director General Counsel 08/19/2013 Esther Marion Stearns 03/01/2007 Chief Operating Officer President 05/01/2012 William Edward Dwyer III 01/01/2004 Managing Director National Sales 03/01/2013 Denise Abood 01/01/2008 Managing Director Human Capital 06/30/2012 Jonathan Eaton 01/01/2008 Managing Director Retirement Planning 06/30/2012 Christopher F. Feeney 01/28/2008 Managing Director Chief Information Officer 12/31/2012 Kathy VanNoy-Pineda 05/21/2009 EVP Chief Compliance Officer, Brokerage 01/01/2014 John J. McDermott Jr. 07/27/2009 Managing Director Chief Risk Officer 09/13/2013 Abdiel Alan Valenzuela 05/21/2009 VP - Advisory Chief Compliance Officer, Advisory 05/01/2011 Derek Bruton 03/01/2010 Managing Director National Sales 04/04/2014 Becky Shulman 06/06/2011 Managing Director Deputy CFO 11/21/2011 Mary Frances Schott 06/01/2014 Managing Director Client Experience and Training 03/29/2016 Ryan Christopher Parker 06/01/2014 Managing Director Investment and Planning Solutions 06/03/2016 Thomas Dominic Lux 03/16/2015 Executive Vice President Chief Financial Officer 09/28/2015 Thomas Andrew Gooley 07/10/2015 Managing Director Service, Trading and Operations Matthew Jon Audette 09/28/2015 Chief Financial Officer Chief Financial Officer Suzanne Elizabeth Auletta 09/18/2015 Executive Vice President Chief Compliance Officer, Brokerage Tracy Ellen Calder 01/25/2016 Managing Director Deputy Chief Risk Officer Kurt Walker Lofgren 03/13/2017 Senior Vice President Chief Compliance Officer, Advisory Scott Alan Seese 07/10/2017 Managing Director Chief Information Officer LLC Y LPL Financial Holdings Inc. Sole stockholder of LPL Holdings, Inc. N N N N N N Y Linsco/Private Ledger Corp. (N/K/A LPL Financial) SEC Administrative Proceeding Rel. Nos. 33 8371 and 34 49232 02/12/2004 The Securities and Exchange Commission Action involved allegations related to application of mutual breakpoints for eligible customers on purchases of front-end load mutual funds. The SEC issued and order against LPL that resulted in a censure, monetary fine, disgorgement/restitution and cease and desist/injunction. LPL Financial SEC Administrative Proceeding No. 34-58515 09/11/2008 The Securities and Exchange Commission Proceeding involved allegations of violations of the safeguards rules of Regulation S-P. The SEC issued an order against LPL that resulted in a censure, monetary fine, remedial undertakings by LPL, and cease and desist/injunction. N Y LPL Financial SEC Administrative Proceeding Rel. Nos. 33 8371 and 34 49232 02/12/2004 The Securities and Exchange Commission Action involved allegations related to application of mutual breakpoints for eligible customers on purchases of front-end load mutual funds. The SEC issued an order against LPL that resulted in a censure, monetary fine, disgorgement/restitution, and cease and desist/injunction. Y LPL Financial Consent Order 09/04/2014 State of Ohio Department of Insurance LPL failed to report various regulatory actions to the Ohio Department of Insurance within 30 days. $800.00 fine and investigative costs of $200.00. Y Private Ledger Financial Services, Inc. (N/K/A LPL Financial) Docket/Case Number: 82-66-S 05/20/1984 State of Michigan The matter involved a client that was sold various securities by two Private Ledger Financial Services, Inc. (PLFS) agents who were not registered in Michigan at the time of sale, which is a violation of Michigan Securities Act. PLFS was censured and ordered to pay restitution of $11,163.00 to a Michigan client. Private Ledger Financial Services, Inc. (N/K/A LPL Financial) Docket/Case Number: 50-86-952(a). 05/14/1986 State of Georgia The matter involved allegations that PLFS offered for sale and sold securities which were not effectively registered nor exempt from registration. PLFS reimbursed the Commissioner in the amount of $1,000.00 and agreed to cease and desist without admitting or denying any of the findings of fact or conclusions of Law. LPL Financial Docket/Case Number: 9501-04LC 10/09/1996 State of Pennsylvania The matter involved conduct of a former registered representative and one of its predecessor firms, Private Ledger Financial Services (PLFS). LPL consented to an order requiring it to engage an independent consultant to review its existing compliance policies & procedures, pay costs of $19,304.94 and comply with PA securities regulations. LPL Financial Docket/Case Number: 97E179 12/01/1998 State of Kansas The proceeding was based on the conduct of a former registered representative and one of its predecessor firms, PLFS. LPL agreed to review procedures and make modifications that LPL determines to be reasonable, not overly burdensome and offers restitution to certain LPL customers. LPL Financial Docket/Case Number: IC06-CAF-19 06/28/2006 State of Texas Involved allegations that LPL failed to timely update its Form BD to reflect the use of other business names in connection with securities activity by certain LPL branch offices in TX. The order resulted in a reprimand and administrative fine in the amount of $10,000.00. LPL Financial Docket/Case Number: 2007-03-01 11/20/2007 State of Pennsylvania Allegations that at certain times between 1998 and 2006, LPL failed to maintain or enforce procedures reasonably designed to supervise one or more of its former registered representatives. The matter resulted in a $200,000.00 administrative assessment and $30,000.00 for investigative and legal costs. LPL Financial Docket/Case Number: SEC-2009-46 09/11/2009 State of Montana Allegation that LPL failed to reasonably supervise a former registered representative. LPL consented to pay restitution of $1,144,416.51 and a fine to the State of Montana of $150,000.00. LPL Financial Docket/Case Number: SEU-2007-73 12/24/2007 State of Hawaii Allegation of failure to disclose to clients material information in connection with the offer, sale or purchase of securities. Consent agreement resulted in an administrative penalty of $10,000.00. LPL Financial Docket/Case Number: 2010-AH-012 12/08/2009 State of Kentucky Allegation that LPL paid advisory compensation to registered representative who was not qualified and was not registered as an investment advisor representative. Matter resulted in a fine of $4,000.00. LPL Financial Docket/Case Number: 0800381 07/12/2010 State of Illinois Allegation that LPL failed to detect the role of one of its former representatives in the sale of participations in oil and gas projects. Matter resulted in a $300,000.00 fine and restitution of $167,796.00. LPL Financial Docket/Case Number: AP-10-16 08/11/2010 State of Missouri Matter involved sale of variable annuity contract in which one of its representatives allegedly misunderstood the contract's rider. Matter resulted in a censure and $37,540.00 in total for fine, restitution and interest. LPL Financial Docket/Case Number:1000096 10/24/2011 State of Illinois Allegation that LPL failed to supervise a former registered representative. Matter resulted in restitution of $1,885,000.00 to customers. LPL Financial Docket/Case Number: 2009-10-06 12/06/2011 State of Pennsylvania Allegation that LPL failed to supervise two former registered representatives. Matter resulted in a fine of $59,092.52 and investigative costs. LPL Financial Docket/Case Number: S-07-0001-2 11/08/2011 State of Oregon Allegation that LPL failed to supervise a former OSJ manager's transactions. Matter resulted in a fine of $100,000.00. LPL Financial Docket/Case Number: AP-13-21 12/17/2013 State of Missouri Allegation that LPL failed to supervise a former registered representative. Fine of $175,000.00 and pay the cost of the investigation in the amount of $10,000.00. LPL Financial Docket/Case Number: SEC-2012-144 11/04/2012 State of Montana Allegation that LPL failed to supervise a former registered representative. Matter resulted in a fine of $10,000.00 and restitution of $20,500.00 to customers. LPL Financial Docket/Case Number: 2012-0036 12/12/2012 State of Massachusetts Allegations of failure to supervise and train registered representatives in connection with the sale of non-traded REITS. Matter resulted in a fine of $500,000.00 and restitution to certain customers. LPL Financial Docket/Case Number: IC08-CAF-22 12/30/2008 State of Texas The state alleged that LPL failed to enforce its written procedures by failing to report a felony charge on a registered representative's Form U4. Fine of $5,000.00. LPL Financial File No. 1200385 06/30/2014 State of Illinois Securities Department LPL submitted to a consent order with the Illinois Securities Department in connection with certain variable annuity exchange transactions, in particular, relating to its failure to adequately enforce supervisory procedures and maintain certain books and records required under Illinois law. LPL agreed to a censure, fine of $2,000,000.00 and restitution to impacted customers of approximately $800,000.00. LPL Financial File no. 1200385 10/31/2014 State of Illinois Securities Department LPL Financial failed to detect improper and fraudulent conduct on the part of David Lisnek toward his LPL clients. LPL Financial allowed Mr. Lisnek to remain a registered representative while several facts, viewed together as a pattern of conduct, would have constituted multiple cautionary indicators of the potential for improper conduct. Fine of $500,000.00 and restitution in the amount of $315,218.00. LPL Financial Consent Order 07/14/2015 Massachusetts Securities Division LPL consented to the findings that it did not establish, maintain, or enforce adequate procedures to review senior-specific titles for compliance with the Commonwealth's Senior Designations Regulations adopted June 1, 2007. As a result, LPL allowed its broker-dealer agents and investment adviser representatives to use prohibited senior-specific designations. Censure, undertakings, cease and desist, and a fine in the amount of $250,000.00. LPL Financial Stipulation and Consent 07/31/2015 State of Florida Office of Financial Regulation LPL consented to the sanctions and the entry of the findings that from September 2009 to September 2013, LPL allowed one of its registered representatives to engage in investment advisory business from an office in the State of Florida without being lawfully registered in Florida. Cease and desist and a fine in the amount of $10,000.00. LPL Financial Consent Order 09/22/2015 State of Delaware Investor Protection Unit LPL consented to the sanctions and the entry of findings that LPL failed to ensure that its financial advisors understood and explained the unique risks, failed to enforce its warning and fine system with regard to its leveraged ETFs concentration limits, and failed to adequately monitor and ensure the monitoring of client holding periods, all of which constitute a failure to supervise. Fine in the amount of $50,000.00, restitution in the amount of $150,000.00, and undertakings. LPL Financial Consent Order 10/01/2015 State of Nevada Securities Division LPL consented to the sanctions and the entry of findings that from January 1, 2008 through December 31, 2013, LPL offered multiple non-traded REITs that were sold in excess of the REIT's prospectus standards, various state concentration limits, or its own alternative investment guidelines. LPL failed to implement an adequate supervisory system that was reasonably designed to achieve compliance with NAC 90.321. LPL also failed to enforce its written procedures to supervise the activities of its registered representatives in violation of NAC 90.321. Fine of $21,202.19 and reimbursement of $19,676.00 for investigation costs to Nevada, reimbursement of $35,000.00 for investigation costs to NASAA, censure, restitution, cease and desist, and undertakings. LPL Financial Assurance of Discontinuance 09/15/2015 Commonwealth of Massachusetts LPL consented to the sanctions and the entry of findings that LPL offered leveraged ETFs without monitoring and systematically reviewing the length of time its clients held leveraged ETFs. LPL provided insufficient training materials to financial advisors and failed to identify and examine potential issues concerning the suitability of leveraged ETF exposure. Moreover, LPL did not consistently adhere to its policy of imposing fines on LPL financial advisors who exceeded this concentration limit. Fine in the amount of $200,000.00, restitution in the amount of $1,600,000.00, and undertakings. LPL Financial Consent Order 11/04/2015 State of Ohio Department of Insurance LPL consented to the allegations that it violated Ohio statute 3905.22 by failing to timely report a regulatory action taken by the state of New Hampshire dated April 6, 2015. Civil penalty in the amount of $1,800.00 and administrative costs of $200.00. LPL Financial LLC Administrative Consent Order 11/24/2015 Mississippi Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Mississippi residents. Civil penalty in the amount of $19,253.45, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 11/23/2015 Commonwealth of Puerto Rico LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Puerto Rico residents. Civil penalty in the amount of $10,125.11, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 11/30/2015 Pennsylvania Department of Banking and Securities LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Pennsylvania residents. Civil penalty in the amount of $26,110.92, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 11/24/2015 New Mexico Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to New Mexico residents. Civil penalty in the amount of $11,528.48, cease and desist, offers of remediation, and undertakings. LPL Financial Consent Order 11/30/2015 South Dakota Division of Securities LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to South Dakota residents. The Firm received a copy of the final Consent Order on November 30, 2015. Civil penalty in the amount of $12,500.70, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 11/24/2015 Indiana Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Indiana residents. Civil penalty in the amount of $19,041.63 and reimbursement of $35,000 for investigation costs to NASAA, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Stipulation and Consent Order 12/03/2015 Utah Division of Securities LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Utah residents. Civil penalty in the amount of $18,293.16, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 12/03/2015 Missouri Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Missouri residents. Civil penalty in the amount of $38,522.75, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 12/01/2015 Texas State Securities Board LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Texas residents. Civil penalty in the amount of $110,855.07, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent To Order 12/03/2015 Alaska Division of Banking and Securities LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Alaska residents. Civil penalty in the amount of $10,570.45, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Stipulation for Consent Order 12/30/2015 Colorado Division of Securities LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Colorado residents. Civil penalty in the amount of $40,183.94, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Stipulation and Consent Agreement 12/30/2015 Florida Office of Financial Regulation LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Florida residents. Administrative fine in the amount of $50,555.39, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 01/08/2016 Georgia Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Georgia residents. Civil penalty in the amount of $28,021.63, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 12/21/2015 Idaho Department of Finance LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Idaho residents. Civil penalty in the amount of $17,738.18, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 01/05/2016 Iowa Insurance Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Iowa residents. Civil penalty in the amount of $16,638.57, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 12/21/2015 Michigan Department of Licensing and Regulatory Affairs LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Michigan residents. The Consent Order was issued and entered by Michigan on December 21, 2015. Civil penalty in the amount of $38,133.80, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 12/23/2015 Minnesota Department of Commerce LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Minnesota residents. The Firm received a copy of the final Consent Order on December 23, 2015. Civil penalty in the amount of $41,209.74, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 12/29/2015 Nebraska Department of Banking & Finance LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Nebraska residents. Civil penalty in the amount of $16,736.07, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 12/15/2015 New Hampshire Bureau of Securities Regulation Without admitting or denying the facts or allegations, LPL consented to the findings that LPL failed to implement an adequate supervisory system and enforce its written procedures regarding the sale of non-traded REITs to New Hampshire residents. Pay an administrative fine of $250,000.00, the Bureau's costs of $250,000.00, and a contribution to the investor education fund of $250,000.00, offer remediation, undertakings, and cease and desist from any further violations. LPL Financial LLC Administrative Consent Order 01/29/2016 California Department of Business Oversight LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to California residents. Civil penalty in the amount of $140,220.11, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 01/15/2016 Washington Department of Financial Institutions Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Washington residents. Civil penalty in the amount of $65,766.07, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 02/09/2016 Alabama Securities Commission LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Alabama residents. Civil penalty in the amount of $18,267.52, of which $8,267.52 represents partial reimbursement for the Commission's cost for investigating this matter, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 02/09/2016 North Dakota Securities Department LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to North Dakota residents. Civil penalty in the amount of $11,012.50, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 02/18/2016 Texas State Securities Board In May 2015, the Staff of the Texas Securities Board initiated an investigation into LPL's Financial Statement Reviews for agents registered with the Texas Securities Commission. In certain instances, during the relevant periods of January 2011 through September 2011 and June 2014 through December 2014, the Financial Statement Reviews were not conducted in accordance with LPL's written supervisory procedures. LPL consented to the entry of the order, an administrative fine in the amount of $95,000.00, and undertakings. LPL Financial LLC Consent Order 02/19/2016 Washington Insurance Commissioner LPL consented to the entry of a consent order with the Insurance Commissioner of the state of Washington, after its investigation into the conduct of a non-resident insurance producer after receiving a complaint from an insured alleging that he misrepresented the benefits and suitability of an annuity. More than one of the insurance producers' violations were known or should have been known by one or more individuals acting on behalf of LPL, and LPL neither reported the violations nor took corrective action. LPL paid a fine in the amount of $2,000.00. LPL Financial LLC Consent Order 02/26/2016 Office of the Kansas Securities Commissioner LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Kansas residents. Civil penalty in the amount of $16,182.86, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Administrative Consent Order 02/29/2016 Kentucky Department of Financial Institutions LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Kentucky residents. Civil penalty in the amount of $22,841.84, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 03/02/2016 Wisconsin Division of Securities LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Wisconsin residents. Civil penalty in the amount of $25,928.70, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 03/04/2016 Tennessee Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Tennessee residents. Civil penalty in the amount of $33,714.11, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 03/11/2016 U.S. Virgin Islands Division of Banking and Insurance LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to U.S. Virgin Islands residents. Civil penalty in the amount of $10,013.22, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 03/14/2016 Ohio Division of Securities LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Ohio residents. Civil penalty in the amount of $35,522.13, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 03/30/2016 South Carolina Securities Commission LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to South Carolina residents. Civil penalty in the amount of $80,000.00, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 04/26/2016 Arkansas Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Arkansas residents. Civil penalty in the amount of $19,347.74, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 04/29/2016 Oregon Division of Financial Regulation LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Oregon residents. Civil penalty in the amount of $24,642.20, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 05/03/2016 Oklahoma Department of Securities LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Oklahoma residents. Civil penalty in the amount of $21,245.14, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 06/30/2016 Commonwealth of Massachusetts The Firm entered into a Consent Order with the Commonwealth of Massachusetts, Enforcement Section of the Division, related to their investigation into whether the Firm's activities and conduct violated the Massachusetts Uniform Securities Act. The Enforcement Section alleged that during the time period of January 1, 2014 to June 30, 2016, the Firm failed to supervise its agents when it failed to review those agents' misleading communications with the public in connection with the purchase and sale of an agents' book of business. The Enforcement Section also alleged that the Firm failed to supervise its agents when such agent borrowed money from a client and lost that money in speculative trading for agents' own account. A fine in the amount of $100,000.00, payment of restitution to clients in the amount of $217,750.00, cease and desist, additional undertakings of employee training, and changes to policies and procedures. LPL Financial LLC Consent Order 07/05/2016 Wyoming Secretary of State Compliance Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Wyoming residents. Civil penalty in the amount of $12,344.55, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 07/20/2016 Louisiana Office of Financial Institutions LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Louisiana residents. Civil penalty in the amount of $64,363.95, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 07/27/2016 Maryland Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Maryland residents. Civil penalty in the amount of $28,172.31, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 08/25/2016 Hawaii Department of Commerce and Consumer Affairs LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Hawaii residents. Civil penalty in the amount of $19,825.37, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 07/18/2016 Montana Securities Department LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Montana residents. Civil penalty in the amount of $11,397.81, investigative costs of $29,112.18, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Acceptance, Waiver and Consent 12/21/2016 FINRA Without admitting or denying the findings, LPL Financial LLC ("The Firm") consented to the sanctions and to the entry of findings that it failed to maintain over 18.3 million electronic communications in non-erasable and no re-writable format, known as WORM ("write once, read many") format. The findings stated that the WORM format is intended to prevent the alteration or destruction of broker dealer records maintained on electronic storage media. In addition, the Firm failed to retain check registers in WORM format. The findings also stated that the Firm's written supervisory procedures failed to have an adequate supervisory process concerning WORM compliance. The firm was censured and fined $750,000.00. LPL Financial LLC Acceptance, Waiver and Consent 12/21/2016 FINRA Without admitting or denying the findings, LPL Financial LLC ("The Firm") consented to the sanctions and to the entry of findings that it failed to send and create records that it had sent to customers, more than 1.6 million account notices required under Rule 17a-3(a)(17) of the Exchange Act. The Firm is required to send these account notices to customers at 36 month intervals for each account in which a suitability determination was made. Over a seven-year period, the Firm failed to send over 25 percent of the required notices. In addition, the Firm failed to establish, maintain, and enforce a supervisory system and written supervisory procedures reasonably designed to achieve compliance with applicable laws and regulations in relation to the creation and distribution of such account records. The firm was censured, fined $900,000.00, and consented to additional undertakings to review policies and procedures. LPL Financial LLC Consent Order 01/27/2017 Commonwealth of Massachusetts The Firm entered into a Consent Order with the Commonwealth of Massachusetts, Enforcement Section of the Division, related to allegations that LPL advisor, Roger S. Zullo, fabricated the suitability profiles of numerous LPL clients, selling them scores of large, illiquid, unsuitable, high commission variable annuities, at substantial upfront profits to himself and LPL, in violation of Sections 101, 102, and 204(a)(2)(G) of the Act. The Enforcement Section further alleges that LPL failed in its responsibility to supervise Roger S. Zullo, in violation of Section 204(a)(2)(J). Cease and desist, censure, a fine in the amount of $975,000.00, additional undertakings, restitution and disgorgement to be determined based on results of LPL Financials investigation and accounting. LPL Financial LLC Consent Order 04/26/2017 State of Maine Office of Securities LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Maine residents. Civil penalty in the amount of $11,939.46, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 05/01/2017 Vermont Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Vermont residents. Civil penalty in the amount of $ 11,074.81, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 05/04/2017 Massachusetts Securities Division The Massachusetts Securities Division alleged that LPL Financial failed to supervise financial advisors located on credit union premises, including the supervision of certain compensation and certain aspects of disclosures related to its business conducted on the credit union premises. On May 2, 2017, LPL submitted an Offer of Settlement to the Division. LPL neither admitted nor denied the Statement of Facts and Violations of Law contained in the Consent Order related to an ongoing investigation by the Division's Registration, Inspections, Compliance and Examinations Section during the time period of December 27, 2011 to May 2, 2017. Cease and desist, censure, removal of the credit union's DBA name; a comprehensive review of the Firm's policies, procedures, training, and processes related to the allegations; certain undertakings, and pay a fine in the amount of $1,000,000. LPL Financial LLC Consent Order 05/26/2017 Virginia Division of Securities and Retail Franchising LPL consented to the findings that from January 1, 2008 through December 21, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Virginia residents. Civil penalty in the amount of $28,095.38, cease and desist, offers of remediation, and undertakings. N Y LPL Financial Docket/Case Number: IC06-CAF-19 06/28/2006 State of Texas Involved allegations with LPL failed to timely update its Form BD to reflect the use of other business names in connection with securities activity by certain LPL branch offices in TX. The order resulted in a reprimand and a fine in the amount of $10,000.00. LPL Financial Docket/Case Number: SEC-2009-46 10/26/2009 State of Montana Allegation that LPL failed to reasonably supervise a former registered representative. Consent order resulted in LPL agreeing to pay restitution of $1,144,416.51 and a fine to the State of MT of $150,000.00. LPL Financial Docket/Case No. 2010-AH-012 12/08/2009 State of Kentucky Allegation that LPL paid advisory compensation to a registered representative who was not qualified and was not registered as an investment advisor representative. $4,000.00 fine. LPL Financial Docket/Case Number: 0800381 07/12/2010 State of Illinois Allegation that LPL failed to detect role of one of its former representatives in the sale of participations in oil and gas projects. Matter resulted in a $300,000.00 fine and restitution of $167,796.00. LPL Financial Docket/Case Number: 1000096 10/24/2011 State of Illinois Allegation that LPL failed to supervise a former registered representative. Matter resulted in $1,885,000.00 restitution to customers. LPL Financial Docket/Case Number: 2009-10-06 12/06/2011 State of Pennsylvania Allegation that LPL failed to supervise two former registered representatives. Matter resulted in $59,092.52 fine for investigative costs. LPL Financial Docket/Case Number: S-07-0001-2 11/08/2011 State of Oregon Allegation that LPL failed to supervise a former OSJ manager's transactions. Matter resulted in $100,000.00 fine. LPL Financial Docket/Case Number: AP-10-16 08/11/2010 State of Missouri Matter involved sale of variable annuity contract in which a registered representative allegedly misunderstood the contract's rider. Matter resulted in a censure and $37,540.00 in total for fine, restitution and interest. LPL Financial Docket/Case No. 2007-03-01 11/20/2007 State of Pennsylvania Allegations that at certain times between 1998 and 2006, LPL failed to maintain or enforce procedures reasonably designed to supervise one or more of its former registered representatives. The matter resulted in a $200,000.00 administrative assessment and $30,000.00 for investigative and legal costs. LPL Financial Docket/Case Number: IC08-CAF-22 12/30/2008 State of Texas The state alleged that LPL failed to enforce its written procedures relating to the notification of a felony charge and Form U4 updates. Fine of $5,000.00. LPL Financial Docket/Case Number: AP-13-21 12/17/2013 State of Missouri Allegation that LPL failed to supervise a former registered representative. Fine of $175,000.00 and payment of the cost of the investigation in the amount of $10,000.00. LPL Financial Docket/Case Number: SEC-2012-144 11/04/2012 State of Montana Allegation that LPL failed to supervise a former registered representative. Fine of $10,000.00 and $20,500.00 in restitution to customers. LPL Financial Docket/Case Number: 2012-0036 12/12/2012 State of Massachusetts Allegations of failure to supervise and train registered representatives in connection with the sale of non-traded REITS. Fine of $500,000.00 and restitution to certain customers. LPL Financial File No. 1200385 06/30/2014 State of Illinois Securities Department LPL submitted to a consent order with the Illinois Securities Department in connection with certain variable annuity exchange transactions, in particular, relating to its failure to adequately enforce supervisory procedures and maintain certain books and records required under Illinois law. LPL agreed to a censure, fine of $2,000,000.00 and restitution to impacted customers of approximately $800,000.00 LPL Financial Consent Order 09/04/2014 State of Ohio Department of Insurance LPL failed to report various regulatory actions to the Ohio Department of Insurance within 30 days. $800.00 fine and investigative costs of $200.00. LPL Financial File No. 1200385 10/31/2014 State of Illinois Securities Department LPL Financial failed to detect improper and fraudulent conduct on the part of David Lisnek toward his LPL clients. LPL Financial allowed Mr. Lisnek to remain a registered representative while several facts, viewed together as a pattern of conduct, would have constituted multiple cautionary indicators of the potential for improper conduct. Fine of $500,000.00 and restitution in the amount of $315,218.00. LPL Financial Consent Order 07/14/2015 Massachusetts Securities Division LPL consented to the findings that it did not establish, maintain, or enforce adequate procedures to review senior-specific titles for compliance with the Commonwealth's Senior Designations Regulations adopted June 1, 2007. As a result, LPL allowed its broker-dealer agents and investment adviser representatives to use prohibited senior-specific designations. Censure, undertakings, cease and desist, and a fine in the amount of $250,000.00. LPL Financial Stipulation and Consent 07/31/2015 State of Florida Office of Financial Regulation LPL consented to the sanctions and the entry of the findings that from September 2009 to September 2013, LPL allowed one of its registered representatives to engage in investment advisory business from an office in the State of Florida without being lawfully registered in Florida. Cease and desist and a fine in the amount of $10,000.00. LPL Financial Consent Order 09/22/2015 State of Delaware Investor Protection Unit LPL consented to the sanctions and the entry of findings that LPL failed to ensure that its financial advisors understood and explained the unique risks, failed to enforce its warning and fine system with regard to its leveraged ETFs concentration limits, and failed to adequately monitor and ensure the monitoring of client holding periods, all of which constitute a failure to supervise. Fine in the amount of $50,000, restitution in the amount of $150,000.00, and undertakings. LPL Financial Consent Order 10/01/2015 State of Nevada Securities Division LPL consented to the sanctions and the entry of findings that from January 1, 2008 through December 31, 2013, LPL offered multiple non-traded REITs that were sold in excess of the REIT's prospectus standards, various state concentration limits, or its own alternative investment guidelines. LPL failed to implement an adequate supervisory system that was reasonably designed to achieve compliance with NAC 90.321. LPL also failed to enforce its written procedures to supervise the activities of its registered representatives in violation of NAC 90.321. Fine of $21,202.19 and reimbursement of $19,676.00 for investigation costs to Nevada, reimbursement of $35,000.00 for investigation costs to NASAA, censure, restitution, cease and desist, and undertakings. LPL Financial Assurance of Discontinuance 09/15/2015 Commonwealth of Massachusetts LPL consented to the sanctions and the entry of findings that LPL offered leveraged ETFs without monitoring and systematically reviewing the length of time its clients held leveraged ETFs. LPL provided insufficient training materials to financial advisors and failed to identify and examine potential issues concerning the suitability of leveraged ETF exposure. Moreover, LPL did not consistently adhere to its policy of imposing fines on LPL financial advisors who exceeded this concentration limit. Fine in the amount of $200,000.00, restitution in the amount of $1,600,000.00, and undertakings. LPL Financial Consent Order 11/04/2015 State of Ohio Department of Insurance LPL consented to the allegations that it violated Ohio statute 3905.22 by failing to timely report a regulatory action taken by the state of New Hampshire dated April 6, 2015. Civil fine in the amount of $1,800.00 and administrative costs of $200.00. LPL Financial LLC Administrative Consent Order 11/24/2015 Mississippi Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Mississippi residents. Civil penalty in the amount of $19,253.45, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 11/23/2015 Commonwealth of Puerto Rico LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Puerto Rico residents. Civil penalty in the amount of $10,125.11, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 11/30/2015 Pennsylvania Department of Banking and Securities LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Pennsylvania residents. Civil penalty in the amount of $26,110.92, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 11/24/2015 New Mexico Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to New Mexico residents. Civil penalty in the amount of $11,528.48, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 11/30/2015 South Dakota Division of Securities LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to South Dakota residents. The Firm received a copy of the final Consent Order on November 30, 2015. Civil penalty in the amount of $12,500.70, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 11/24/2015 Indiana Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Indiana residents. Civil penalty in the amount of $19,041.63 and reimbursement of $35,000 for investigation costs to NASAA, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Stipulation and Consent Order 12/03/2015 Utah Division of Securities LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Utah residents. Civil penalty in the amount of $18,293.16, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 12/03/2015 Missouri Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Missouri residents. Civil penalty in the amount of $38,522.75, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 12/01/2015 Texas State Securities Board LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Texas residents. Civil penalty in the amount of $110,855.07, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent To Order 12/03/2015 Alaska Division of Banking and Securitie LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Alaska residents. Civil penalty in the amount of $10,570.45, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Stipulation for Consent Order 12/30/2015 Colorado Division of Securities LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Colorado residents. Civil penalty in the amount of $40,183.94, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Stipulation and Consent Agreement 12/30/2015 Florida Office of Financial Regulation LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Florida residents. Administrative fine in the amount of $50,555.39, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 01/08/2016 Georgia Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Georgia residents. Civil penalty in the amount of $28,021.63, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 12/21/2015 Idaho Department of Finance LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Idaho residents. Civil penalty in the amount of $17,738.18, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 01/05/2016 Iowa Insurance Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Iowa residents. Civil penalty in the amount of $16,638.57, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 12/21/2015 Michigan Department of Licensing and Regulatory Affairs LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Michigan residents. The Consent Order was issued and entered by Michigan on December 21, 2015. Civil penalty in the amount of $38,133.80, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 12/23/2015 Minnesota Department of Commerce LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Minnesota residents. The Firm received a copy of the final Consent Order on December 23, 2015. Civil penalty in the amount of $41,209.74, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 12/29/2015 Nebraska Department of Banking & Finance LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Nebraska residents. Civil penalty in the amount of $16,736.07, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 12/15/2015 New Hampshire Bureau of Securities Regulation Without admitting or denying the facts or allegations, LPL consented to the findings that LPL failed to implement an adequate supervisory system and enforce its written procedures regarding the sale of non-traded REITs to New Hampshire residents. Pay an administrative fine of $250,000.00, the Bureau's costs of $250,000.00, and a contribution to the investor education fund of $250,000.00, offer remediation, undertakings, and cease and desist from any further violations. LPL Financial LLC Administrative Consent Order 01/29/2016 California Department of Business Oversight LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to California residents. Civil penalty in the amount of $140,220.11, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 01/15/2016 Washington Department of Financial Institutions Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Washington residents. Civil penalty in the amount of $65,766.07, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 02/09/2016 Alabama Securities Commission LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Alabama residents. Civil penalty in the amount of $18,267.52, of which $8,267.52 represents partial reimbursement for the Commission's cost for investigating this matter, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 02/09/2016 North Dakota Securities Department LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to North Dakota residents. Civil penalty in the amount of $11,012.50, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 02/18/2016 Texas State Securities Board In May 2015, the Staff of the Texas Securities Board initiated an investigation into LPL's Financial Statement Reviews for agents registered with the Texas Securities Commission. In certain instances, during the relevant periods of January 2011 through September 2011 and June 2014 through December 2014, the Financial Statement Reviews were not conducted in accordance with LPL's written supervisory procedures. LPL consented to the entry of the order, an administrative fine in the amount of $95,000.00, and undertakings. LPL Financial LLC Consent Order 02/19/2016 Washington Insurance Commissioner LPL consented to the entry of a consent order with the Insurance Commissioner of the state of Washington, after its investigation into the conduct of a non-resident insurance producer after receiving a complaint from an insured alleging that he misrepresented the benefits and suitability of an annuity. More than one of the insurance producers' violations were known or should have been known by one or more individuals acting on behalf of LPL, and LPL neither reported the violations nor took corrective action. LPL paid a fine in the amount of $2,000.00. LPL Financial LLC Consent Order 02/26/2016 Office of the Kansas Securities Commissioner LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Kansas residents. Civil penalty in the amount of $16,182.86, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Administrative Consent Order 02/29/2016 Kentucky Department of Financial Institutions LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Kentucky residents. Civil penalty in the amount of $22,841.84, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 03/02/2016 Wisconsin Division of Securities LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Wisconsin residents. Civil penalty in the amount of $25,928.70, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 03/04/2016 Tennessee Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Tennessee residents. Civil penalty in the amount of $33,714.11, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 03/11/2016 U.S. Virgin Islands Division of Banking and Insurance LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to U.S. Virgin Islands residents. Civil penalty in the amount of $10,013.22, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 03/14/2016 Ohio Division of Securities LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Ohio residents. Civil penalty in the amount of $35,522.13, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 03/30/2016 South Carolina Securities Commission LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to South Carolina residents. Civil penalty in the amount of $80,000.00, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 04/26/2016 Arkansas Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Arkansas residents. Civil penalty in the amount of $19,347.74, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 04/29/2016 Oregon Division of Financial Regulation LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Oregon residents. Civil penalty in the amount of $24,642.20, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 05/03/2016 Oklahoma Department of Securities LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Oklahoma residents. Civil penalty in the amount of $21,245.14, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 06/30/2016 Commonwealth of Massachusetts The Firm entered into a Consent Order with the Commonwealth of Massachusetts, Enforcement Section of the Division, related to their investigation into whether the Firm's activities and conduct violated the Massachusetts Uniform Securities Act. The Enforcement Section alleged that during the time period of January 1, 2014 to June 30, 2016, the Firm failed to supervise its agents when it failed to review those agents' misleading communications with the public in connection with the purchase and sale of an agents' book of business. The Enforcement Section also alleged that the Firm failed to supervise its agents when such agent borrowed money from a client and lost that money in speculative trading for agents' own account. A fine in the amount of $100,000.00, payment of restitution to clients in the amount of $217,750.00, cease and desist, additional undertakings of employee training, and changes to policies and procedures. LPL Financial LLC Consent Order 07/05/2016 Wyoming Secretary of State Compliance Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Wyoming residents. Civil penalty in the amount of $12,344.55, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 07/20/2016 Louisiana Office of Financial Institutions LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Louisiana residents. Civil penalty in the amount of $64,363.95, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 07/27/2016 Maryland Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Maryland residents. Civil penalty in the amount of $28,172.31, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 08/25/2016 Hawaii Department of Commerce and Consumer Affairs LPL consented to the findings that from January 1, 2008 through December 31,2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Hawaii residents. Civil penalty in the amount of $19,825.37, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 07/18/2016 Montana Securities Department LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Montana residents. Civil penalty in the amount of $11,397.81, investigative costs of $29,112.18, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Acceptance, Waiver and Consent 12/21/2016 FINRA Without admitting or denying the findings, LPL Financial LLC ("The Firm") consented to the sanctions and to the entry of findings that it failed to maintain over 18.3 million electronic communications in non-erasable and no re-writable format, known as WORM ("write once, read many") format. The findings stated that the WORM format is intended to prevent the alteration or destruction of broker dealer records maintained on electronic storage media. In addition, the Firm failed to retain check registers in WORM format. The findings also stated that the Firm's written supervisory procedures failed to have an adequate supervisory process concerning WORM compliance. The firm was censured and fined $750,000.00. LPL Financial LLC Acceptance, Waiver and Consent 12/21/2016 FINRA Without admitting or denying the findings, LPL Financial LLC ("The Firm") consented to the sanctions and to the entry of findings that it failed to send and create records that it had sent to customers, more than 1.6 million account notices required under Rule 17a-3(a)(17) of the Exchange Act. The Firm is required to send these account notices to customers at 36 month intervals for each account in which a suitability determination was made. Over a seven-year period, the Firm failed to send over 25 percent of the required notices. In addition, the Firm failed to establish, maintain, and enforce a supervisory system and written supervisory procedures reasonably designed to achieve compliance with applicable laws and regulations in relation to the creation and distribution of such account records. The firm was censured, fined $900,000.00, and consented to additional undertakings to review policies and procedures. LPL Financial LLC Consent Order 01/27/2017 Commonwealth of Massachusetts The Firm entered into a Consent Order with the Commonwealth of Massachusetts, Enforcement Section of the Division, related to allegations that LPL advisor, Roger S. Zullo, fabricated the suitability profiles of numerous LPL clients, selling them scores of large, illiquid, unsuitable, high commission variable annuities, at substantial upfront profits to himself and LPL, in violation of Sections 101, 102, and 204(a)(2)(G) of the Act. The Enforcement Section further alleges that LPL failed in its responsibility to supervise Roger S. Zullo, in violation of Section 204(a)(2)(J). Cease and desist, censure, a fine in the amount of $975,000.00, additional undertakings, restitution and disgorgement to be determined based on results of LPL Financials investigation and accounting. LPL Financial LLC Consent Order 04/26/2017 State of Maine Office of Securities LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Maine residents. Civil penalty in the amount of $11,939.46, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 05/01/2017 Vermont Securities Division LPL consented to the findings that from January 1, 2008 through December 31, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Vermont residents. Civil penalty in the amount of $ 11,074.81, cease and desist, offers of remediation, and undertakings. LPL Financial LLC Consent Order 05/04/2017 Massachusetts Securities Division The Massachusetts Securities Division alleged that LPL Financial failed to supervise financial advisors located on credit union premises, including the supervision of certain compensation and certain aspects of disclosures related to its business conducted on the credit union premises. On May 2, 2017, LPL submitted an Offer of Settlement to the Division. LPL neither admitted nor denied the Statement of Facts and Violations of Law contained in the Consent Order related to an ongoing investigation by the Division's Registration, Inspections, Compliance and Examinations Section during the time period of December 27, 2011 to May 2, 2017. Cease and desist, censure, removal of the credit union's DBA name; a comprehensive review of the Firm's policies, procedures, training, and processes related to the allegations; certain undertakings, and pay a fine in the amount of $1,000,000. LPL Financial LLC Consent Order 05/26/2017 Virginia Division of Securities and Retail Franchising LPL consented to the findings that from January 1, 2008 through December 21, 2013, it failed to implement an adequate supervisory system regarding its sales of non-traded REITs and failed to enforce its written procedures regarding the sale of non-traded REITs to Virginia residents. Civil penalty in the amount of $28,095.38, cease and desist, offers of remediation, and undertakings. Y LPL Financial Order of Revocation 02/13/2015 State of Ohio Department of Insurance On or about September 4, 2014, LPL entered into a Consent Agreement with the Ohio Department of Insurance regarding the reporting of various administrative actions on its license. Pursuant to the agreement, LPL was required to pay a civil penalty and administrative costs. LPL failed to comply with the order in paying the civil penalty and administrative costs. On February 27, 2015, the Ohio Department of Insurance issued an order vacating the prior Order of Revocation entered on February 13, 2015. LPL did not receive the invoice for the $1,000 civil penalty and administrative costs. When the Firm became aware of the Order of Revocation, the monetary penalty was paid promptly and the Firm's license was reinstated on February 27, 2015. N Y LPL Financial Acceptance, Waiver and Consent 05/21/2013 FINRA The matter involved inadequate e-mail supervision and allegations of misstatements regarding the chronology of events concerning the LPL's discovery of the issue. Fine of $7,500,000.00. Y PLFS (N/K/A LPL Financial) Acceptance, Waiver and Consent 06/04/1980 NASD District 2 Business Conduct Committee Allegations involved failure to supervise a branch office for use of stationary and business cards, failure to use appropriate signage and a listing in a phone directory. Fine of $500.00. LPL Financial Acceptance, Waiver and Consent 02/13/2003 NASD The matter arose out of a representatives' unauthorized participation in and postings on electronic bulletin boards. The AWC resulted in a fine of $5,000.00 and an undertaking to revise LPL's written supervisory procedures concerning communications with the public via electronic media. LPL Financial Acceptance, Waiver and Consent 03/27/2003 NASD The matter arose from an error in reporting 23 transactions in FIPS securities within five minutes after execution. The AWC resulted in a fine of $5,000.00. LPL Financial Acceptance, Waiver and Consent 02/12/2004 NASD Action involved allegations related to application of mutual breakpoints for eligible customers on purchases of front-end load mutual funds. LPL was censured and fined $2,232,805.00 and made various other undertakings to the NASD. LPL Financial Acceptance, Waiver and Consent 10/11/2004 NASD The matter involved allegations related to two municipal bond liquidations. AWC resulted in censure and fine of $5,000.00, restitution of $4,662.00, and undertaking to review written supervisory procedures related to determining FMV of municipal securities. LPL Financial Acceptance, Waiver and Consent 11/30/2004 NASD The matter arose out of LPL's alleged late filing of amendments to Forms U4 and Forms U5 from January 2002 through March 2004. The AWC resulted in a censure, fine in the amount of $450,000.00 and various undertakings by LPL. LPL Financial Acceptance, Waiver and Consent 06/08/2005 NASD The matter arose out of LPL's acceptance of directed brokerage payments from mutual fund companies. The AWC resulted in a fine of $3,602,398.00. LPL Financial Acceptance, Waiver and Consent 11/14/2005 NASD Allegations that LPL failed to establish, maintain and enforce reasonable system of procedures to supervise activities of registered persons in connection with wire transfers. AWC resulted in a censure and fine of $75,000.00. LPL Financial Acceptance, Waiver and Consent 12/19/2005 NASD Matter arose out of allegations related to recommendations to customers for the purchase of mutual fund Class B and C shares. The AWC resulted in a fine of $2,400,000.00. LPL Financial Acceptance, Waiver and Consent 01/06/2006 NASD The matter arose out of allegations related to violations of NASD rules regarding the termination of research coverage of subject companies. The matter resulted in a fine of $5,000.00. LPL Financial Acceptance, Waiver and Consent 12/21/2006 NASD Allegations were that during a period, LPL failed to establish, maintain and enforce adequate supervisory systems related to variable annuity exchanges. The AWC resulted in various undertakings by LPL. LPL Financial Acceptance, Waiver and Consent 04/17/2007 NASD Allegations that LPL failed to timely amend a representative's Form U4 with material information. The AWC resulted in a fine of $5,000.00. LPL Financial Acceptance, Waiver and Consent 09/04/2009 FINRA Allegations involved failure to comply with MSRB Rule G-14. AWC resulted in a fine to LPL of $5,000.00. LPL Financial Acceptance, Waiver and Consent 01/20/2011 FINRA Allegations involved review of e-mails. Resulted in a censure and fine of $100,000.00. LPL Financial Acceptance, Waiver and Consent 01/20/2011 FINRA Allegations involved review of procedures on transmittal of cash and securities from customer accounts to third-party accounts. Resulted in a censure and fine of $100,000.00. LPL Financial Acceptance, Waiver and Consent 01/06/2011 FINRA Allegations that LPL did not use reasonable diligence to ascertain best inter-dealer market and failed to buy or sell in such market so that the resulting price to customers was as favorable as possible. Resulted in a censure and fine of $20,000.00. LPL Financial Acceptance, Waiver and Consent 12/22/2010 FINRA Allegations involved procedures on supervision of variable annuity exchanges. Resulted in a censure and fine of $175,000.00. LPL Financial Acceptance, Waiver and Consent 06/03/2008 FINRA Allegations involved failure to supervise a former registered representative in connection with his/her use of investment strategies, marketing materials and the appropriateness of investments. Resulted in a censure and fine of $125,000.00. LPL Financial Acceptance, Waiver and Consent 06/08/2011 FINRA Allegations involved procedures on supervision of advertising and public appearances. AWC resulted in a fine of $25,000.00. LPL Financial Acceptance, Waiver and Consent 06/26/2012 FINRA Allegations of trade reporting violations. Matter resulted in censure and $17,000.00 fine. LPL Financial Acceptance, Waiver and Consent 07/26/2011 FINRA Allegations of trade reporting violations. Matter resulted in censure and $22,500.00 fine. LPL Financial Acceptance, Waiver and Consent 05/21/2013 FINRA The matter involved inadequate e-mail supervision and allegations of misstatements regarding the chronology of events concerning the LPL's discovery of the issue. Fine of $7,500,000.00. LPL Financial Acceptance, Waiver and Consent 05/16/2013 FINRA The action arose from allegations of charging commissions that were not fair and reasonable on certain corporate and municipal bonds. Fine of $60,000.00. LPL Financial Acceptance, Waiver and Consent 12/31/2012 FINRA Allegations of inadequate supervision of mutual fund prospectus delivery to customers. Fine of $400,000.00. LPL Financial Acceptance, Waiver and Consent 05/06/2015 FINRA Beginning in 2007, LPL pursued a strategy of significantly increasing the size of the Firm but LPL did not accompany this rapid growth with a concomitant dedication of sufficient resources to permit the Firm to meet its supervisory obligations. As a result, the Firm failed to have adequate systems and procedures in place to supervise certain aspects of its business. Examples of the alleged failures stemming from these allegations are set forth in the AWC, number 2013035109701. $10,000,000 fine, undertakings, and restitution to certain customers. LPL Financial Acceptance, Waiver and Consent 07/06/2015 FINRA Without admitting or denying the findings, the Firm consented to the sanctions and to the entry of findings that it disadvantaged certain retirement plan and charitable organization customers who were eligible to purchase Class A shares in certain mutual funds without a front-end sales charge. The findings stated that these customers were instead sold Class A shares with a front-end sales charge or a Class B or C shares with back-end sales charges and higher ongoing fees and expenses. These sales disadvantaged customers by causing them to pay higher fees than they were actually required to pay. The findings also stated that the Firm has failed to establish and maintain a supervisory system and procedures reasonably designed to ensure that customers who purchased mutual fund shares received the benefit of applicable sales charge waivers. The Firm also failed to adopt any controls to detect instances in which the Firm did not provide sales charge waivers to customers in connection with their mutual fund purchases. Censure, undertakings, and $5.72 million in restitution to customers. N N N N Y N/A N/A 12/01/1989 N/A A claim for recovery of corporate funds embezzled by a former employee (not securities licensed) in the Private Ledger Financial Services Accounting Department. Claim was paid in late 1989 by the National Union Fire Insurance Company. N/A N/A 12/01/2006 N/A Claim for misappropriation of funds by a former registered representative. Claim was paid during 2004 through 2006 by Zurich American. N/A N/A 07/27/2007 N/A Claim for misappropriation of funds by a former registered representative. Claim of $50,000.00 was paid on July 27, 2007 by Zurich American. N/A N/A 11/02/2011 N/A Indemnification payments received from fidelity bond carrier. Claims arising from payments made by individuals to a former registered representative. Payments totaling $1,279,433.79. Dates of payments: August 31, 2009 - $1,080,233.79; July 20, 2010 - $14,000.00 and; November 2, 2011 - $185,200.00. N/A N/A 10/18/2011 N/A Issue related to non-payment of funds loaned to a former registered representative. $2,000,000.00 claim paid. N/A N/A 11/05/2013 N/A Claim for misappropriation of funds by a former registered representative. $1,300,000.00 claim paid. N Steve Morrison 617-897-4095 SVP, Associate Counsel 08/11/2017