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FINRA Fines Oppenheimer & Co. $500K for Lapses in Supervision

Oppenheimer & Co. Inc., a well-known global full-service brokerage and investment bank, has agreed to pay a fine of $500,000 as a part of a settlement with the Financial Industry Regulatory Authority.

FINRA alleged that, between 2012 and 2017, Oppenheimer failed to reasonably supervise transactions that the firm’s registered representatives placed directly with product sponsors on behalf of firm customers. Additionally, Oppenheimer did not take steps reasonably designed to ensure that direct business transactions appeared on the firm’s daily trade blotter. FINRA stated that approximately 490,000 transactions for more than 14,000 clients were not properly recorded by Oppenheimer, leaving investors open to potential harm.

Furthermore, FINRA accused Oppenheimer of failing to collect relevant information for customers’ investment profiles – such as age, investment goals, and liquidity needs – in order to make certain suitability determinations.

According to FINRA, these oversights by Oppenheimer violated several FINRA rules, including Rule 3110(a) which requires “each member firm to establish and maintain a system to supervise the activities of each associated person that is reasonably designed to achieve compliance with applicable securities laws and regulations, and with applicable FINRA rules” and Rule 2111, which requires “member firms and their associated persons to have a reasonable basis to believe that a recommended securities transaction or investment strategy is suitable for a customer, based on information obtained through the reasonable diligence of the firm or associated person to ascertain the customer’s investment profile,” among others.

Without admitting or denying the allegations, Oppenheimer & Co. agreed to a $500,000 fine and a censure.

This is only Oppenheimer’s latest brush with FINRA. Last year, the regulatory body ordered the firm to pay $14 million to victims of a Ponzi scheme.

Oppenheimer has been a FINRA member since 1945. The firm is a full-service broker-dealer headquartered in New York. Oppenheimer has approximately 135 branch offices and roughly 1,900 registered representatives.

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