Clients allegedly
Following an investigation by the New Hampshire Bureau of Securities Regulation, LPL has partially settled with the state regulator over its alleged failure to supervise Dain F. Stokes, the ex-rep who solicited money for a project he said had ties to Taylor Swift.
LPL Financial will repay the affected clients their $576,000 principal investment, pay a $400,000 penalty to the bureau and make offers to 21 of Stokes’ former clients to buy back “unsuitable” variable annuities the ex-advisor had sold them, according to the New Hampshire agency.
The settlement is a win for the clients — and far from an inevitable one as investors aren’t always able to recoup losses.
“That is a remarkable settlement that [the bureau was] able to secure, and it’s certainly not common,” Andrew Stoltmann, the former president of the Public Investors Advocate Bar Association, said in an email. “New Hampshire has a good reputation for being aggressive.”
One of Stokes’ clients reported Stokes to the local police department in Fremont, New Hampshire, last August. The bureau filed a cease and desist order against the rep later that month, and, soon after, Stokes was terminated from LPL Financial, “effectively shutting down his Bedford, New Hampshire office,” according to the New Hampshire agency.
Stokes was subsequently
The bureau’s investigation into Stokes is ongoing, according to the agency.
“While the bureau is satisfied with this result in making his victims whole, our matter against Mr. Stokes remains pending,” said Staff Attorney Noah Abrahams, in a statement. Abrahams was not immediately available for a request for comment.
Stokes still faces two pending client arbitration cases alleging misappropriation of funds and “suitability issues through misrepresentation and poor advice,” according to the summary of the cases on BrokerCheck.
The ex-advisor denied the claims against him last month
An LPL spokeswoman did not respond to a request for comment on the settlement.
