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The more than 231 credit unions served by LPL Financial Corp. are not expected to be affected by a lawsuit filed by LPL Holdings Inc. over breach of indemnity against the former parent company of three of its broker-dealers.On Nov. 20, LPL and its broker-dealer subsidiaries, Mutual Service Corp., Associated Securities Corp. and Waterstone Financial Group Inc., filed a joint complaint against Pacific Life, the three broker-dealers’ former parent company, for breach of indemnity provisions from the purchase agreement.LPL said it bought the three companies from Pacific Life in 2007 for nearly $100 million. The independent broker-dealer said Pacific Life agreed to indemnify LPL from any defense costs, awards and settlement judgments from investor claims taken out against the three broker-dealers before the acquisition deal was finalized.According to the suit, Pacific Life has amassed millions of dollars of settlement and defense costs related to claims from investors. In two claims involving Associated Securities, LPL said in October, Pacific Life had not paid a $57,000 settlement and in March, the company initially did not pay an $8.4 million arbitration award, the suit read. Pacific Life later paid the settlement.In August, LPL integrated the three broker-dealers into its organization. The company’s more than 230 credit unions remained on its platform or the UVEST Financial Services platform. None of the company’s financial institutions customers, including credit unions and community banks, among others, will be impacted by the integration of the Mutual Service Corp., Associated Securities and Waterstone Financial broker-dealers, which principally serve the independent financial adviser community, LPL said at the time.“LPL Financial and UVEST advisers, including all credit union-based advisers, and their clients continue to have access to Pacific Life’s products and its service teams,” Joseph Kuo, a spokesman for LPL, told Credit Union Times. “We do not expect this legal matter to impact the business relationship between the LPL Financial and UVEST broker-dealers, which are not parties to this dispute, and Pacific Life Insurance Co. and Pacific Select Distributors.”Pacific Life spokeswoman Milda Goodman has told several publications that the LPL and Pacific Life dispute will be resolved in court and will not disrupt the companies’ ongoing business relationship.The credit union industry is served by the LPL Financial Institution Services division. In August 2007, LPL bought credit union-owned broker-dealer XCU Capital Corp.–[email protected]

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