Finra imposed $3.4 million in sanctions on Oppenheimer & Co. Inc. for the firm's missteps in reporting internal discipline, providing information in arbitration cases and offering sales discounts to customers, the broker-dealer regulator announced on Thursday.
Over the course of eight years — from 2008 to 2016 — the firm was on average four years' late making 365 filings with the Financial Industry Regulatory Authority Inc. regarding disciplinary actions it took against its own brokers and arbitration and litigation settlements.
Finra also said that between 2010 and 2013, Oppenheimer did not provide documents to seven claimants in an arbitration case against former registered representative Mark Hotton. Oppenheimer has already paid $6 million to settle claims in that case.
In addition, Finra cited Oppenheimer for overcharging 825 customers $1,010,327 between 2009 and 2015 for mutual fund shares because it did not apply the appropriate fee waiver.
Finra
levied a $1.575 million fine and made Oppenheimer pay $703,122 to the arbitration claimants and $1,142,619 to its mutual fund customers.
The firm accepted the penalty without admitting or denying Finra's charges.
“It's important for firms to ensure their supervisory programs are designed to comply with Finra reporting requirements, and that their procedures provide adequate direction to their employees to make required filings,” Brad Bennett, Finra executive vice president and chief of enforcement, said in a statement. “Finra uses this information to identify and initiate investigations of firms and associated persons that pose a risk to investors.”
Oppenheimer said it has made changes to its internal systems to address the problems outlined in the Finra action.
“The announced settlement includes a number of legacy issues that Oppenheimer self-reported in part as a result of enhanced procedures put in place by the firm,” the firm said in a statement. “Over the past several years, we have upgraded personnel; strengthened policies, procedures and controls; and undertaken significant technology initiatives to mitigate future reporting issues.”
