Sunday, September 16, 2018

FINRA Sanctions Against Oppenheimer & Co.

The Financial Industry Regulatory Authority (FINRA) sanctioned Oppenheimer & Co. Inc. more than $3.4 million in November of 2016 due to Oppenheimer’s failing to report required information to FINRA, failing to produce documents in discovery to customers who filed arbitrations, and for not applying applicable sales charge waivers to customers. The $3.4 million in sanctions included $1.575 million in fines and $1.85 million paid to customers. In regards to the customers who filed arbitrations, FINRA ordered Oppenheimer to provide the claimants with the documents that they failed to produce and pay said claimants more than $700,000. The remainder of the $1.85 million was paid to eligible customers who qualified for, but did not receive, applicable mutual fund sales charge waivers.
            These violations by Oppenheimer spanned several years and included failures to report “more than 350 required filings including securities-related regulatory findings, disciplinary actions taken by Oppenheimer against its employees, and settlements of securities-related arbitration and litigation claims.” Additionally, FINRA stated that Oppenheimer, on average, made these filings “more than four years late.” This incident was not Oppenheimer’s first run in with FINRA. Despite prior FINRA investigations resulting in Oppenheimer’s revision of its supervisory procedures, FINRA alleged that Oppenheimer had in fact failed to adopt adequate procedures for reporting regulatory events involving its employees. In March of 2015, FINRA fined Oppenheimer $2.5 million and ordered the firm to pay $1.25 million in restitution for failure to supervise former Oppenheimer broker Mark Hotton. In that instance, FINRA found that Oppenheimer “failed to make more than 300 required filings to FINRA about some of its brokers in a timely manner” with the filings being, on average, “238 days late.”

The FINRA news releases can be viewed at the following links:

An example of a Motion for Sanctions in a FINRA arbitration can be found below:

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