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Oppenheimer & Co – 75 Regulatory events and 178 Arbitrations, and counting.

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Oppenheimer & Co was sanctioned $885,000 by regulators for filing to protect investors, by failing to supervise a financial advisor, and failing to comply with aspects of its compliance system.   In addition to paying the regulator, Oppenheimer shall develop and maintain policies, procedures and systems that reasonably supervise the activities of its stockbrokers, investment advisors, and branch office managers, and ensure full compliance by all with Oppenheimer’s responsibilities to its clients.  June, 2015.  (See IPU Case 11-2-4).
Oppenheimer & Co. was fined $400,000 and ordered to comply with all Securities and Exchange requirements regarding municipal debt transactions.  The SEC found that Oppenheimer & Co willfully violated the securities act, and the antifraud provisions of the Federal Securities laws in connection with the underwriting of certain municipal offerings.  Oppenheimer & Co. failed to conduct sufficient due diligence and failed to have a reasonable basis for believing the truthfulness of certain material representations it made with those offerings.  The representations made by Oppenheimer & Co. were materially misleading disclosures.   June, 2015 (See SEC 33-9836,  34-75230 and 3-16629).
Oppenheimer & Co. was fined $2,500,000 and ordered to pay another $1,250,000 in restitution to damaged customers, by regulators for failing to supervise a stockbroker who stole more than $6,000,000 from customers and excessively traded their accounts.  That stockbroker is now barred from the industry, but Oppenheimer failed to comply with its compliance procedures and detect the actions of the stockbroker.    Oppenheimer & Co. failed to conduct an adequate investigation into the stockbroker and failed to see “red flags” and to put the stockbroker on heightened supervision.  Oppenheimer failed to investigate twelve red flags, including prior reports of criminal charges against the stockbroker.   Part of Oppenheimer’s supervision system detected that the stockbroker was trading multiple customer accounts at levels considered presumptively excessive trading (i.e. churning or overtrading) yet Oppenheimer filed to act on that information.  Oppenheimer filed to act on wire money transfers from customer’s accounts and the stockbroker, and other outside business activities of the stockbroker.  Oppenheimer’s failure to act on the exception reports that its compliance system did detect was a significant contribution to the damage to the customers.  Oppenheimer’s inadequate procedures related to excessive trading contributed to its failure to reasonably supervise the stockbroker.  The legal department of Oppenheimer failed to provide required documents in arbitration, and failed to timely make 320 required updates to reporting filings designed to protect the investing public.  The Oppenheimer legal department was on notice that the firm was failing to make important required legal disclosures, and failed to make those filings, even after Finra required it to do so.  Oppenheimer failed to timely respond to even the regulator’s requirements for providing documents, in proper formats, when the regulator itself directly requested those documents, for more than two years.  March, 2015 (See 2009017408102)
Oppenheimer was ordered by the SEC to disgorge $4,168,000 to the SEC, and pay more than $5,000,000 in civil penalties for its violations of securities laws regarding trading of penny stocks, and unregistered distribution of securities.   Oppenheimer & Co. committed two separate courses of conduct, each of which violated the Federal Securities laws.  Oppenheimer executed sales of billions of shares of penny stocks for an account of its customer, a brokerage licensed the Bahamas, but knew that the customer was actually providing brokerage services for many US investors, even though the brokerage was unlicensed to do so.  When suspicious activity occurred in the account, Oppenheimer filed to file the required reports, and thereby willfully aided and abetted and was a cause of the violation of the Exchange Act and other U.S. Securities laws.    (January 2015) (See SEC 3-16361)

 

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