Category Archives: Oppenheimer

Oppenheimer Fined for Municipal Bond Sales Practices

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.

Oppenheimer Fined for Role in Penny Stock Scheme

On August 5, 2013, the Financial Industry Regulatory Agency (FINRA) fined Oppenheimer & Co., Inc. $1.4 million for Oppenheimer’s involvement in multiple penny stock schemes.  The fine settles a disciplinary action FINRA took against Oppenheimer in May 2013

Between August 19, 2008 and September 20, 2010, brokers in Oppenheimer branch offices sold over one billion shares of unregistered, risky penny stock.  The penny stock originated from thirteen different customers who deposited the shares into their customer and business accounts then quickly sold the shares and transferred the proceeds out of their accounts.  Oppenheimer ignored many red flags that suggested the customers were affiliated with the companies whose stock they were selling.  FINRA also suggested that some of these penny stock sales were connected to money laundering activities.

The scheme involved seven broker-dealers in Oppenheimer’s branch offices in Boca Raton, FL, New York, NY, Newport Beach, CA, Alpharetta, GA, and Jericho, NY.  Another branch office in Portsmouth, NH may have also been a part of the scheme.

Oppenheimer agreed to the fine and promised to correct its supervisory and anti money laundering policies without admitting or denying the allegations as part of a settlement with FINRA. The company has also entered into a similar settlement with the New Hampshire Secretary of State to resolve allegations of selling unsuitable penny stock to investors.

Brokerage firms like Oppenheimer have an obligation to make suitable investment recommendations to their customers.  Penny stock investments are highly risky and unsuitable for most investors.  Brokerage firms also have a duty to supervise their employees to make sure that the employees follow all securities laws and regulations.

If you suffered losses as a result of Oppenheimer’s sale of penny stocks to you, you may be able to recover losses by pursuing a claim against Oppenheimer and your broker in arbitration at FINRA Dispute Resolution.  FINRA arbitration is an effective way for many investors to recover losses from brokerage firms.

Blau & Malmfeldt is a law firm that represents investors across the United States in securities, commodity futures, partnership, and shareholder rights disputes.  Please call us at 312-443-1600 or email Paul Malmfeldt at pmalmfeldt@blau-malmfeldt.com to schedule a free consultation or learn more about the services we offer.