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May 20th, 2008

LPL Financial Compromised Advisors Logons Used In Stocks Manipulations

LPL Financial recently notified the Maryland State Attorney General of a breach in which hackers compromised the logon passwords of fourteen financial advisors and four assistants of LPL Financial (“LPL”). The hackers used these passwords to gain access to customer accounts in order to “pump and dump” penny stocks. These incidents affected approximately 10,219 individuals.

Hackers compromised the logon passwords of employees in offices located in New Jersey, Illinois, Rhode Island, Pennsylvania, Colorado, Texas, California, Georgia and Connecticut over the course of several months. The information that was potentially accessible included unencrypted names, addresses and Social Security numbers of customers and non-customer beneficiaries.

According to LPL Financial, attempted transactions were intercepted and either rejected or reversed, so no losses were passed on to customers. At this time, LPL has no specific knowledge that any customer information was accessed or misused as a consequence of the breach. LPL also unaware of any personal instance of identity theft related to these incidents.

LPL learned of the first incident on July 16, 2007 and notified the law enforcement, the primary regulator, and the Financial Industry Regulatory Authority. They also determined what information had been compromised and notified the affected individuals, offering solutions to those interested.

Those having questions or encountered an identity theft issue, can call ID TheftSmart at 1-800-588-9839 between 9:00 a.m. and 6:00 p.m. (Eastern Time), Monday through Friday. To ask LPL Financial a question regarding this incident, call 1-800-558-7567, option 3 – Customer Service, between 9:00 a.m. and 6:00 p.m. (Eastern Time), Monday through Friday.

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