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LPL Broker Fined and Suspended for Recommending Risky Investments to Elderly Client

Posted on September 12th, 2025 at 10:11 AM
LPL Broker Fined and Suspended for Recommending Risky Investments to Elderly Client

From the desk of Jim Eccleston at 麻花传媒

An LPL Financial broker in Elizabethtown, Kentucky, has agreed to sanctions after FINRA found he violated Regulation Best Interest (Reg BI) when recommending unsuitable investments to an elderly customer.

As reported by AdvisorHub, Brenton E. Ditto, a 20-year industry veteran, accepted a $5,000 fine, a four-month suspension, and agreed to disgorge $400 in commissions under a Financial Industry Regulatory Authority (FINRA) Acceptance, Waiver and Consent (AWC).

According to the settlement, in September 2021, Ditto recommended that a 95-year-old client purchase four Real Estate Mortgage Investment Conduit (REMIC) support class bonds totaling approximately $71,000. Those bonds, which were the last to receive principal repayments, carried greater risk than higher-priority tranches. FINRA determined the investments were not aligned with the customer’s profile or investment objectives.

The client, who sought “income with capital appreciation,” had no prior fixed income investment experience. His daughter, who held power of attorney, specifically requested an investment with no principal risk, the ability to generate income, and a term of less than one year to ensure funds were available for living expenses. AdvisorHub reports that FINRA concluded Ditto did not have a reasonable basis to believe the recommendation was in the customer’s best interest, given his age, risk tolerance, and liquidity needs.

Following the purchase, rising interest rates caused the bonds’ market value to decline. The customer ultimately lost about $19,000 and received no principal repayments. FINRA noted the complaint was resolved separately.

 

麻花传媒 LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, lpl financial

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