September 17, 2015 / 8:22 PM / 4 years ago

LPL hires former Wall St regulator to bolster regulatory expansion

(Reuters) - In a sign of the growing importance of regulation and compliance at independent brokerages, LPL Financial Group is splitting its regulatory affairs group in half and hiring another former Wall Street regulator to help run the department.

Emily Gordy, a former enforcement executive at the Financial Industry Regulatory Authority (FINRA), will run the part of the firm’s legal group that deals with regulatory inquiries and investigations, the company said on Thursday.

Gordy joins James Shorris, another former FINRA enforcement executive who has helped run LPL’s legal department since 2011, overseeing compliance and risk management. Shorris, in a revamped role, will advise the firm’s executives on regulatory issues.

LPL is the biggest independent broker-dealer in the United States.

Gordy and Shorris will each have the title of executive vice president and deputy general counsel for regulatory affairs. Each lawyer is to oversee about 15 people in the growing regulatory affairs department, according to a source familiar with the matter.

Both lawyers will report to LPL’s general counsel and head of legal and government relations, David Bergers, the company said.

Gordy left FINRA late last year to join a private law firm, Shulman Rogers Gandal Pordy & Ecker, P.A in Potomac, Maryland, where she headed the firm’s Financial Industry Regulatory Group. A 14-year FINRA veteran, Gordy worked with Shorris from 2003 until his departure from FINRA in 2011.

Gordy is the latest in a string of high-profile regulatory hires at LPL, a unit of LPL Investment Holdings Inc., which has come under increased scrutiny over its ability to supervise its thousands of brokers.

LPL began ramping up its regulatory and compliance departments following a spate of regulatory enforcement actions against the firm involving sales abuses and lack of adequate oversight for its fast-growing network of U.S. brokers.

In 2013, for example, FINRA ordered LPL Financial to pay a total of $9 million for significant email system failures and making misstatements to the regulator.

The same year, LPL hired the global chief risk officer from Morgan Stanley’s wealth division, Michelle Oroschakoff, as head of risk, governance and compliance. Oroschakoff oversees the firm’s chief compliance officials. 

LPL has been centralizing its compliance functions, giving less responsibility to its widespread field offices to better control sales practices.

Gordy is also a 13-year veteran of the U.S. Securities and Exchange Commission, where she worked prior to joining FINRA.

Reporting by Suzanne Barlyn and Jed Horowitz; Editing by Chizu Nomiyama

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below