The Boston-based stock brokerage company LPL and the Newport Beach-based Pacific Life Insurance Co, are expected to be caught in a legal fight sometime soon. According to a story in the trade publication Investment News, fraud suits against a broker who sold stakes worth millions of dollars in a hedge fund that collapsed in the year 2007, could arise to determine which company is liable for the damages.

Pacific Life was associated with three stock brokerages for selling LPL stock. The stock brokerage called Associated Securities Corp., was the one with which the broker was actually affiliated with. According to Investment news, “in connection with various acquisitions”, LPL said it is in a dispute with an unnamed third party indemnifier, in a recent Securities and Exchange Commission filing.

The publication has got to know about this dispute among LPL and the life insurer from a familiar source of the latter company. Now it is to be uncovered as to who’s responsible for the millions in claims and legal against Associated Securities Broker Jeffrey Frost.

Frost has been banned from acting as an investment adviser with SEC because he lost an $8.8 million arbitration claim, earlier this year. Frost solicited investors in the San Luis Obispo area to buy APEX Equity funds from Utah’s Thompson Consulting Inc. in the years 2005 and 2006.

The regulators believe that the investors had taken up the speculative hedge fund as it would offer them safety and security in the future. LPL states that legal costs and claims in the case were being paid by Pacific Life. Investment News has also discovered that LPL was recently informed that the third party “is no longer responsible to indemnify the companies for certain claims.”

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