Oppenheimer & Co. Fined $500,000 by FINRA for Supervisory Lapses

Posted on June 7th, 2024 at 11:27 AM
Oppenheimer & Co. Fined $500,000 by FINRA for Supervisory Lapses

From the desk of Jim Eccleston at Eccleston Law

Oppenheimer & Co. has agreed to a $500,000 fine to settle allegations made by FINRA regarding inadequate supervision of certain trades conducted by its advisors directly with fund companies on behalf of customers.

As reported by AdvisorHub, between 2012 and 2017, Oppenheimer failed to appropriately analyze approximately 490,000 transactions where advisors placed orders directly with mutual fund providers, affecting over 14,000 customers. Those trades were not subjected to Oppenheimer's reporting system, which is utilized to identify potential sales practice violations.

Furthermore, Oppenheimer neglected to ensure that its advisors collected essential customer profile information necessary for assessing the suitability of recommendations. This failure violated FINRA's Rule 3110 on reasonable supervision, Rule 4511 concerning accurate preservation of books and records, and Rule 2010, which mandates high standards of commercial honor.

Following the violations, AdvisorHub reports that Oppenheimer revised its policies to prohibit direct transactions with mutual fund companies unless a corresponding account has been established at the firm. Additionally, the firm implemented progressive discipline measures for brokers who fail to adhere to these new account application procedures.

 

Eccleston Law LLC represents investors and financial advisors nationwide in insecurities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, finra

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