Last Updated: February 2025
Overview
OSAIC FS, INC. (formerly Lincoln Financial Securities Corporation until June 2024) has a significant history of regulatory issues and customer complaints. The firm has recently ceased operations as of January 27, 2025, but its regulatory history raises important concerns for investors who may have claims against the firm.
Key Regulatory Actions and Violations
2024 SEC Communications Violations
- $8.5 million civil penalty imposed
- Widespread failures in preserving electronic communications
- Supervisory deficiencies in monitoring employee communications
- Required implementation of new compliance systems
Serious Criminal Fraud Cases
- Connecticut case involving $700,000 fraudulent promissory note scheme
- Representative convicted of 20 counts of securities fraud
- $700,000 rescission offer to affected investors
- Enhanced supervision requirements imposed
Mutual Fund Trading Violations
- Multiple instances of improper mutual fund switching
- Inadequate supervision of trading practices
- Delayed response to identified misconduct
- $15,000 fine for supervision failures
Branch Office Registration Issues
- Multiple state actions for unregistered operations
- Required enhanced branch office audits
- Mandatory quarterly complaint reporting
- Fines ranging from $5,000 to $25,000 in various states
Systemic Supervision Failures
The firm demonstrated recurring problems in several critical areas:
Representative Oversight
- Failure to detect and prevent criminal misconduct
- Inadequate response to red flags
- Poor supervision of trading activities
- Insufficient monitoring of communications
Customer Protection
- Multiple instances of customer fund misappropriation
- Delayed response to customer complaints
- Inadequate verification procedures
- Poor documentation of customer information
Compliance Systems
- Deficient electronic communication systems
- Inadequate branch office supervision
- Poor record-keeping practices
- Insufficient monitoring systems
Required Remedial Actions
Regulators have repeatedly required the firm to:
Enhance Supervision
- Conduct mandatory internal reviews
- Implement annual branch audits
- Report quarterly on complaints
- Strengthen monitoring systems
Financial Remediation
- Pay significant regulatory fines
- Make restitution to affected investors
- Contribute to investor education funds
- Reimburse investigation costs
Financial Advisor Misconduct
We are investigating financial advisors with this firm and will shortly update with specific individuals who have been or are currently subject to customer complaints and regulatory scrutiny.
Implications for Investors
Current and former clients of OSAIC FS should be aware that:
- The firm’s extensive regulatory history suggests systemic supervision failures
- Multiple instances of fraud and misconduct have been documented
- Customer complaints and arbitration cases indicate ongoing issues
- The firm’s recent closure may affect the handling of customer claims
Next Steps for Affected Investors
If you were a client of OSAIC FS and are concerned about your investments or the handling of your account, you should:
- Review all account statements and transaction records
- Document any suspicious activities or unauthorized trades
- Gather all correspondence with your financial advisor
- Contact Patil Law, P.C. at 800-950-6553 for a confidential evaluation of your case
Our firm specializes in helping investors recover losses due to broker misconduct and inadequate supervision. We understand the complex regulatory environment and can help evaluate your potential claims against OSAIC FS.
Frequently Asked Questions
How do I know if I have a valid claim against OSAIC FS?
Several factors may indicate a potential claim, including unauthorized trading, unsuitable investment recommendations, misrepresented risks, or unexplained losses. Our attorneys can review your account statements and communications to evaluate your specific situation. Importantly, you don’t need to prove misconduct yourself – we have extensive experience investigating these matters.
What is the time limit for filing a claim against OSAIC FS?
Regulatory rules typically require investors to file claims within six years of the alleged misconduct. However, some state laws may provide different deadlines. Given OSAIC’s recent closure in January 2025, it’s crucial to act promptly to preserve your rights. We recommend contacting us immediately for a case evaluation to ensure you don’t miss any critical deadlines.
Will OSAIC’s closure affect my ability to recover losses?
While the firm’s closure presents additional challenges, various options remain available for recovery, including insurance coverage, regulatory bonds, and potential claims against successor entities. Our firm has experience handling claims against closed brokerages and can help navigate these complexities.
What documents do I need to pursue a claim?
Key documents include:
- Account statements and trade confirmations
- Account opening documents and investment agreements
- Communications with your financial advisor
- Any marketing materials or investment presentations received Don’t worry if you don’t have all these documents – we can often help obtain necessary records through legal channels.
How much does it cost to pursue a claim?
We handle investment fraud cases on a contingency fee basis, meaning we only get paid if we recover money for you. The initial consultation is free, and we’ll provide a clear explanation of any potential costs before proceeding with your case.
How long does the claims process typically take?
While each case is unique, most claims are resolved within 12-18 months. Factors affecting the timeline include case complexity, available documentation, and whether settlement negotiations are successful. We work diligently to resolve claims as efficiently as possible while maximizing potential recovery.
What types of compensation can I recover?
Potential recoveries may include:
- Direct investment losses
- Lost opportunity costs
- Interest on lost funds
- Attorney fees and costs
- Punitive damages in cases of serious misconduct
Will pursuing a claim affect my relationship with my current financial advisor?
If you’ve already moved your accounts to a new firm, pursuing a claim against OSAIC won’t affect your current advisory relationship. If you’re still working with an OSAIC advisor who has moved to a new firm, we can discuss strategies for protecting your interests while maintaining necessary business relationships.
For additional questions or to discuss your specific situation, contact Patil Law, P.C at 800-950-6553. Our experienced investment fraud attorneys are here to help protect your rights and pursue recovery of your losses.
This post is intended solely for informational purposes and does not constitute legal advice. Every case is unique and should be evaluated individually by qualified legal counsel. For more brokerage firm investigations by Patil Law, please visit the Brokerage Firm Investigations page.