Oppenheimer & Co., Inc. Required to Pay $3.8 Million in Restitution for Failure to Supervise

FINRA Hits Oppenheimer with $800k Fine and Requires Firm to Make Restitution

On December 30, 2019, the Financial Industry Regulatory Authority (FINRA) issued a News Release stating that Oppenheimer & Co. Inc. had been issued a fine of $800,000 for failing to reasonably supervise early rollovers of Unit Investment Trusts (UITs).  This resulted in customers incurring “potential excessive sales charges.” Oppenheimer’s failure to comply with regulatory requirements resulted in FINRA requiring the firm to pay millions in restitution. 

According to FINRA, from January 2011 through December 2015, customers incurred $3.8 million in sales charges for early UIT rollovers.  Oppenheimer failed to implement an appropriate supervisory system, particularly the use of automated reports or alerts, which could have prevented the excessive sales charges.  FINRA notes that “Oppenheimer did not identify that its representatives recommended potentially unsuitable rollovers.”

FINRA, in their 2018 Regulatory and Examination Priorities Letter, notified members of their intention to focus on:

• Fraud
• High-risk firms and brokers
• Operational and financial risks (including customer protection and verification of assets and liabilities)
• Sales practice risks (such as suitability of recommendations)
• Market integrity

FINRA informed Oppenheimer and other firms that they had “observed firms experiencing problems implementing effective controls, such as firms’ handling of Unit Investment Trusts (UITs).”

Attorney Brian Levin has recovered millions through FINRA arbitration and court litigation for investors who suffered meaningful financial losses due to the misconduct of the financial advisers and banks.  If you have experienced losses as a result of broker misconduct, contact Levin Law today.  Our attorneys are experienced litigators that will help you get the recovery that you deserve — call (305) 402-9050 or email contact@levinlawpa.com for a free, no-obligation case consultation.