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Lincoln Financial Advisors Fined $950,000

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Lincoln Financial Advisors was fined $950,000 for receiving funds in connection with an agreement between certain mutual funds and other clearing firms. Lincoln Financial Advisors received brokerage commission payments that involved the use of trading commissions to generate payments for participation in the firm’s preferred partner program. (EAF0400860002)

Lincoln Financial Advisors was censured and ordered to pay a fine by a state regulator for inaccurately marking order tickets unsolicited v. solicited. (COM07-001).

When a stockbroker receives payment from a company in addition to commissions, a customer has to worry about advice given. The broker is supposed to recommend products that are suitable for the investor, based on their needs. No explanation is needed about the worry that secret payments from a recommended investment raise. The mis-marking of order tickets, from solicited (the broker recommended it) to unsolicited (the customer called with the idea) is a potential red flag for a broker trying to cover-up unsuitable investment advice. The level of responsibility may be different, and the cover-up always makes it worse.


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