Keeping It in the Family? FINRA Fines Former LPL Rep for Breach
The Financial Industry Regulatory Authority announced that it has suspended and fined Paul X. Nannicelli, a former general securities representative with LPL Financial LLC, for circumventing firm policies regarding beneficiary designations on customer accounts and assisting a client with naming his immediate family members as account beneficiaries without LPL’s approval.
According to FINRA, between September 2020 and August 2023, Nannicelli assisted a customer, who was not a family member, with designating Nannicelli’s wife and children as beneficiaries on six of her investment accounts without the required firm approval. LPL’s policies explicitly prohibited such designations unless the customer is an immediate family member and required that any exceptions be formally submitted and approved through the firm’s compliance system.
FINRA reported that Nannicelli prepared and submitted the forms that listed his wife as the primary beneficiary and his four children as contingent beneficiaries. He falsely described each as a “family friend,” even though the customer had never met them in person. Nannicelli also completed multiple firm compliance questionnaires in 2021 and 2022, affirming that no immediate family members were named as beneficiaries on client accounts and that all such relationships were properly disclosed, despite his knowing otherwise.
The matter originated when LPL filed an amended Uniform Termination Notice for Securities Industry Registration, also known as Form U5, in November 2023, following an internal review prompted by a customer complaint. Although Nannicelli and his family did not ultimately benefit financially from the designations, the conduct was found to violate FINRA Rule 2010, which requires high standards of commercial honor and just and equitable principles of trade.
Nannicelli neither admitted nor denied the findings but consented to a $5,000 fine and an eight-month suspension. He is no longer registered with a FINRA member firm but remains subject to FINRA’s jurisdiction.
Nannicelli reportedly started his career in 1983 at IDS Financial Services Inc. This event is his first public disclosure.
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