On August 5, 2012 the Financial Industry Regulatory Authority (FINRA) announced that Oppenheimer & Co has been fined $1,425,000 for selling unregistered penny stocks and for failing to have implemented an adequate anti-money laundering (AML) program to detect suspicious transactions. In addition to the fine, Oppenheimer was ordered to hire an independent consultant to evalutate and review the firms’ penny stock and AML polcies.
According to the news release, FINRA found that between 2008 and 2010 Oppenheimer sold more than a billion shares of unregistered speculative penny stocks through their branch offices across the United States. The stocks where purchased in large block quantities and deposited by customers shortly after opening their accounts, and then liquidated shortly thereafter. The transactions should have raised red flags and prompted Oppenheimer to investigate weather or not the penny stocks were registered.
Federal securities law require brokerage firms to have adequate AML and supervisory programs in place to monitor customer accounts. FINRA found Oppenheimer’s systems and procedures for penny stocks were inadequate and failed to detect suspicious activity.
The foregoing information, which is publicly available on FINRA’s website is being provided by The White Law Group, LLC.
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