With the recent filing with the SEC for an initial public stockoffering by LPL Financial Corp., it remains to be seen what impact,if any, the move will have on the company's more than 230 creditunion clients.

On June 4, LPL Financial, the parent company of LPL InvestmentHoldings Inc. filed a Form S-1 with the SEC for an offering thatwill consist of primary shares to be sold by LPL and secondaryshares to be sold by some of its existing minority stockholders.The company said in a June 4 statement that it intends to use netproceeds from the proposed public offering for repaying debt, whichtotaled $1.4 billion as of March 31.

Meanwhile, LPL did not offer a comment on the impact of theinitial public stock offering on its credit union clients.

“With the filing of its S-1 Registration Statement, LPLFinancial is in a quiet period. Accordingly, we have no commentbeyond our public filings,” wrote Michael Herley, an LPL spokesman,in a June 7 statement to Credit Union Times.

Under LPL's certificate of corporation, the company said it hasthe authority to issue 600 million shares of capital stock valuedat $1 per share, according to SEC filings. As of June 1, it had94.24 million?shares of common stock outstanding held by77?holders, including 7.42 million?shares of restricted commonstock held by 1,070?advisers and 6,408 restricted shares held bythree?nonexecutive directors. The offering will be made only bymeans of a prospectus, LPL said. A preliminary prospectus will thenbe available. While the offering has been filed with the SEC, ithas not yet become effective. Securities may not be sold nor mayoffers to buy be accepted prior to the time the registrationstatement becomes effective, LPL said.

LPL Financial is considered the country's largest independentbroker-dealer with approximately 2,500 employees, 12,000 financialadvisers, more than 750 financial institutions and nearly 4,000institutional clearing and technology subscribers. It has officesin Boston, Charlotte, N.C., and San Diego.

In 2007, LPL bought Mutual Service Corp., Associated SecuritiesCorp. and Waterstone Financial Group Inc. from Pacific Life, thethree broker-dealers' former parent company. In August 2009, LPLintegrated the three broker-dealers into its organization. Thecompany's more than 230 credit unions remained on its platform orthe UVEST Financial Services platform. LPL Financial and UVESTadvisers, including all credit union-based advisers and theirclients, would continue to have access to Pacific Life's productsand its service teams.

On Nov. 20, LPL and its broker-dealer subsidiaries filed a jointcomplaint against Pacific Life for breach of indemnity provisionsfrom the purchase agreement. LPL said Pacific Life agreed toindemnify LPL from any defense costs, awards and settlementjudgments from investor claims taken out against the threebroker-dealers before the acquisition deal was finalized. Accordingto the suit, Pacific Life has amassed millions of dollars ofsettlement and defense costs related to claims from investors.

In two claims involving Associated Securities, LPL said inOctober, Pacific Life had not paid a $57,000 settlement, and inMarch the company initially did not pay an $8.4 million arbitrationaward, according to the suit. Pacific Life later paid the
settlement. In its June 4 SEC filing, LPL did not name the company,only describing it as a third-party indemnitor.

[email protected]