Oppenheimer to Pay $3.4 Million Over Reporting Violations

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By Antoinette Gartrell

Nov. 17 — Oppenheimer & Co. Inc. agreed to pay $3.4 million to settle Financial Industry Regulatory Authority allegations it violated its reporting, discovery and supervisory obligations.

Allegedly, the firm didn’t timely make over 350 required filings including regulatory findings, disciplinary actions taken by Oppenheimer against its employees, and settlements of arbitration and litigation claims. The firm has inadequate procedures that didn’t provide direction to its employees on making these disclosures, the self-regulatory organization said.

Additionally, Oppenheimer didn’t timely disclose when its employees received Wells notices from the Securities and Exchange Commission.

FINRA also found that the firm didn’t produce relevant documents during discovery in connection with arbitration proceedings.


The firm will pay a $1.575 million fine and pay $1.85 million to affected customers. Of the $1.85 million slated for customers, $700,000 will go to seven claimants who brought arbitration disputes alleging that the firm didn’t supervise former broker Mark Hotton for excessively trading clients’ accounts, FINRA said.

In addition to the sanction, announced Nov. 17, Oppenheimer agreed to be censured and to revise its supervisory system within 90 days. The firm neither admitted nor denied wrongdoing, but consented to FINRA’s findings.

In June, Oppenheimer settled unrelated FINRA allegations it sold unsuitable non-traditional exchange-traded funds to customers.

To contact the reporter on this story: Antoinette Gartrell in Washington at agartrell@bna.com

To contact the editor responsible for this story: Phyllis Diamond at PDiamond@bna.com

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