A former broker for LPL Financial was penalized after being accused of infractions of rules involving beneficiaries on customer accounts, Advisor Hub reports.
New Hampshire-based Paul X. Nannicelli was suspended for eight months and fined $5,000 by the Financial Industry Regulatory Authority for violating FINRA Rule 2010, which requires members to observe high standards of commercial honor and just and equitable principles of trade.
FINRA determined that between September 2020 and August 2023, Nannicelli circumvented his firm’s procedures prohibiting registered representatives or their immediate family members from being named as a beneficiary on a customer’s account without the firm’s approval. It was alleged that Nannicelli assisted a customer with designating Nannicelli’s wife and children as beneficiaries on her accounts without approval from the firm.
According to FINRA’s letter of acceptance, waiver and consent, Nannicelli had his immediate family members designated as beneficiaries on six of the customer’s accounts held at the firm. After the death of the customer’s husband in 2020, “the customer signed and submitted forms changing the beneficiaries on all six accounts. The primary beneficiary on each account was changed to Nannicelli’s wife, and the contingent beneficiaries were changed to Nannicelli’s four children. The forms, which Nannicelli prepared, identified each of the new beneficiaries as a ‘family friend,’ despite the fact that Nannicelli’s wife and children had never met the customer in person.”
FINRA said Nannicelli did not seek the firm’s approval for the beneficiary designations and later certified on a compliance questionnaire that he was not aware of an immediate family member being a beneficiary on any client accounts. LPL’s rules prohibit brokers and their immediate family from being named beneficiaries on client accounts except in limited circumstances.
Nannicelli, who spent 30 years with the firm, accepted and consented to FINRA’s findings without admitting or denying them. He voluntarily resigned from LPL in August 2023 over the same allegations. In November 2023, LPL filed an amended Form US for Nannicelli disclosing an internal review involving a “customer,s allegations that [Nannicelli’s] family members were named as beneficiaries of customer’s accounts.”
Nannicelli and an LPL spokesperson did not reply to requests for comment.
At Hyman Cotter PC, we represent clients nationwide who are the victims of unauthorized trading, breaches of fiduciary duty and other forms of financial adviser misconduct and securities fraud. Our team of lawyers brings a diverse range of knowledge and experiences to our clients’ cases. If your financial adviser made trades without your consent, you may be able to pursue a lawsuit to recoup your losses. We’ll help you understand your rights and options. Contact us at 312-291-4600 or email our team to learn more.
