The Financial Industry Regulatory Authority (FINRA) recently fined Oppenheimer & Co., Inc. $675,000 for charging customers unfair prices for municipal securities transactions and failing to implement an adequate supervisory system. FINRA also ordered Oppenheimer to pay more than $246,000 in restitution to the customers. The firm’s head municipal securities trader, David Sirianni, received a $100,000 fine and a 60-day suspension .
According to FINRA’s investigation, from July 1, 2008, through June 30, 2009, Oppenheimer marked up 89 customer transactions in amounts ranging from 5.01 percent to 15.57 percent higher than its contemporaneous cost. 54 of these transactions saw markups above 9 percent.
Sirianni accomplished this by buying municipal securities from a broker-dealer on Oppenheimer’s behalf. Then, for at least a night, the bonds remained in inventory before they became available for resale to the firm’s customers at an “unfair price” as determined solely by Sirianni.
FINRA determined that Oppenheimer failed to adequately supervise Sirianni. Specifically, FINRA determined that Oppenheimer’s supervisory system was “deficient because supervisory personnel relied solely on a surveillance report that only captured intra-day transactions to review the fairness of markups/markdowns in municipal securities transactions.”
Blau & Malmfeldt invites Oppenheimer customers who purchased municipal bonds to contact us at 312-443-1600 for a complimentary case evaluation. Blau & Malmfeldt is a law firm that represents investors across the United States in securities, commodity futures, partnership and shareholder rights disputes.