LPL Supervisor Michael S. Lincoln’s Head in Ground while San Diego Financial Advisor Solicited Investments in Speculative Hawaii Real Estate from LPL Customers

Mr. Michael Lincoln is probably regretting his decision to avoid reporting the outside business activity (OBA) of a financial advisor he was supposed to be supervising, according to settlement documents he signed with the Financial Industry Regulatory Authority (FINRA).

While at LPL Financial, Mr. Lincoln supervised a financial advisor who developed a real estate property in Hawaii. Mr. Lincoln even invested $850,000 of his own money in his subordinate’s business venture.

What’s wrong with this? Absolutely nothing, except financial advisors are required to report their outside business activities to their brokerage firms. Brokerage firms need to know what their financial advisors are doing, so they can protect the firm’s clients as needed. In this case, the financial advisor should have been reporting his Hawaii real estate investment to Mr. Lincoln and up the supervisory chain. While Mr. Lincoln knew about this OBA, and knew that his subordinate was not reporting it, Mr. Lincoln also failed to report this OBA up LPL’s compliance chain of command.

And it appears that LPL customers may have been harmed as a result. According to Mr. Lincoln’s settlement documents with FINRA, seven LPL customers invested a combined $2.25 million in the financial advisors Hawaii real estate investment. While it is unclear how these investors fared, this investment was probably pretty speculative, and it appears to have already prompted litigation.

As a result of this supervisory failure, Mr. Lincoln is no longer with LPL, although he continues to work in the securities industry through the San Diego office of Independent Financial Group.

If you have questions about investment losses, the securities litigation attorneys at Investor Defense Law LLP may be able to help, and offer free consultations. Investor Defense Law LLP is a law firm dedicated to helping investors in California, Georgia, and Washington State recover investment losses. We understand investment fraud and know how to sue investment advisors, brokerage firms, and financial advisors. To learn more, contact an investment fraud attorney at 800.487.4660.