Securities Arbitration Lawyer Blog
FINRA has suspended former LPL Financial LLC broker Eric Burton from the securities industry for 3 months for allegedly falsifying documents that he submitted to LPL in connection with twenty two variable annuity (“VA”) exchanges.
Burton was also fined $5,000.
If you have lost money with Eric Burton, or LPL Financial LLC, contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.
FINRA Letter of Acceptance, Waiver, and Consent (“AWC”)
Eric Burton and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) on June 22, 2021.
According to the AWC, between August 2016 and December 2016, Burton falsified twenty two VA replacement disclosure forms, which he submitted to LPL. On each form, Burton stated, falsely, that gaining a stepped-up death benefit was one of the reasons that the VA exchange was suitable for the customer. In fact, as Burton knew, each VA that was to be replaced had a stepped-up death benefit that, unbeknownst to LPL, was removed at Burton’s recommendation immediately prior to the time he recommended the VA exchange. Burton recommended to his customers that the death benefits be removed from the existing VAs in order to make his recommended exchanges look to LPL as though they were more advantageous to the customer than they were, even though each of the twenty two VA replacement disclosure forms identified other, accurate reasons why each exchange was suitable for the customer.
LPL’s written supervisory procedures required that registered representatives who recommended the exchange of a VA completed and signed a VA replacement disclosure form that described the features of the VA being replaced, including any death benefits offered by the existing VA. The disclosure form also needed to include the representative’s bases for determining that the VA exchange was suitable for the customer. LPL’s procedures required that the representative submit the disclosure form to LPL for approval prior to the exchange.
By falsifying twenty two VA replacement forms, Burton violated FINRA Rule 2010. In addition, Burton violated FINRA Rules 4511 and 2010 by causing LPL to maintain inaccurate books and records.
FINRA Rules 2010, 4511 & 2330
FINRA Rule 2010 requires FINRA members and their associated persons to “observe high standards of commercial honor and just and equitable principles of trade” in the conduct of their business. Falsifying documents is inconsistent with high standards of commercial honor and just and equitable principles of trade and violates Rule 2010.
FINRA Rule 4511 requires member firms and associated persons to make and preserve books and records as required by applicable laws, rules, and regulations. Implicit in the requirement to make and preserve books and records is the requirement that information in those books and records be accurate. An associated person who enters inaccurate information in a firm’s books and records violates FINRA Rules 4511 and 2010.
FINRA Rule 2330 sets forth specific standards for firms’ supervision of recommended purchases and exchanges of deferred variable annuities. Among other things, FINRA Rule 2330 requires that a representative recommending a VA purchase or exchange document in writing his or her bases for determining that the transaction would be suitable for the customer.
Eric P. Burton (CRD#: 3113849)
Burton has 22 years of experience in the securities industry and was registered as a broker with LPL Financial LLC in Orland Park, IL between April 2016 and March 2019.
He has been registered as a broker with Cetera Advisors LLC in Orland Park, IL since February 28, 2019.
His public FINRA CRD shows two customer disputes, including one filed in March 2021 that settled for $17,553. The other customer dispute from 2015 was denied.
How to Recover Losses or Obtain a Free Consultation
If you have lost money with Eric Burton, or LPL Financial LLC, contact FINRA arbitration lawyers August Iorio and Jorge Altamirano of Iorio Altamirano LLP at august@ia-law.com, jorge@ia-law.com or toll-free at (855) 430-4010 for a free and confidential evaluation of your account.
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.