The Financial Industry Regulatory Authority (FINRA) announced today that it fined Oppenheimer & Co. $1.575 million and ordered it to pay $1.85 million to customers for failing to report required information to the regulatory body, failing to produce documents in discovery to customers who filed arbitrations and for not applying applicable sales charge waivers to customers. Allegedly, over several years, Oppenheimer failed to report to FINRA more than 350 required filings, including securities-related arbitration and litigation claims. The firm made the filings more than four years late, on many occasions. Oppenheimer also did not disclose, in a timely manner, the fact that its Anti-Money-Laundering Compliance Officer and another employee received Wells notices from the Securities and Exchange Commission (SEC).
Additionally, between 2010 and 2013, Oppenheimer failed to produce relevant documents that stated that Mark Hotton, a former broker with the firm, had excessively traded multiple customer accounts. Previously, Oppenheimer paid more than $6 million to resolve customer arbitration claims related to the supervision of Hotton. FINRA also ordered Oppenheimer to pay $1.25 million in restitution to 22 additional customers who suffered losses but had not filed arbitration claims.
FINRA found that Oppenheimer failed to reasonably supervise the applications of sales charge waivers to eligible mutual fund sales. To date, the firm has paid those customers $1.14 million in remediation because of their qualification to receive the applicable mutual fund sales charge waivers, but did not.