UPDATE 4/11/2020: According to FINRA’s February 2020 Disciplinary Actions: “Oppenheimer & Co. Inc. (CRD #249, New York, New York) December 20, 2019 – An AWC was issued in which the firm was censured, fined $85,000 and required to revise its WSPs. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to record Not Held terms and conditions on its order memoranda for institutional customers of one of the firm’s trading desks and for those orders it transmitted reports to the Order Audit Trail System (OATS™) that failed to contain the Not Held special handling code. The findings stated that a default setting in a firm application that optimizes its financial data communications was incorrectly set for orders routed to its portfolio trading system resulting in the firm incorrectly defaulting to Held for OATS reporting purposes. The firm learned about the issue through a regulatory inquiry from FINRA and it fixed the software issue. The findings also stated that the firm transmitted reports to OATS that failed to properly report the Market on Close or Limit on Close special handling codes. A software limitation in the firm’s system caused these codes to be included in the incorrect section of the firm’s reports to OATS, which is the functional equivalent of a failure to report the required special handling codes to OATS. The firm learned about the issue through a regulatory inquiry from FINRA and began working on a solution to fix the problem. However, given the complexity of the problem, the firm was not able to complete its fix of the software limitation until later. The findings also included that the firm failed to establish and maintain a supervisory system and establish, maintain and enforce WSPs reasonably designed to achieve compliance with FINRA rules concerning maintaining accurate books and records, specifically order memoranda. FINRA found that the firm failed to establish and maintain a supervisory system and establish, maintain and enforce WSPs reasonably designed to achieve compliance with FINRA rules concerning OATS reporting (FINRA Case #2016050508501)”
UPDATE 4/2/2020: FINRA has ordered Oppenheimer & Co to pay more than $3.8 million in compensation and a fine of $800,000 for supervisory failures relating to sales of unit investment trusts (UITs). The beneficiaries are Oppenheimer & Co customers who were victims of potentially excessive sales charges stemming from the early rollover of UITs. FINRA explained that UITs offer investors a stake in a fixed portfolio of securities with specific maturity dates (often after 15-24 months). FINRA added that UITs are intended as long-term investments. Thus, rolling over a UIT before its maturity date can result in an unnecessary increase in sales charges over time, raising suitability concerns. From January 2011 through December 2015, the firm allegedly executed over $6.4 billion in UIT transactions, of which approximately $753.9 million were early rollovers. Throughout the investigation, FINRA found that Oppenheimer and Co’s supervisory system was not adequately designed to monitor those early rollovers. Consequently, the firm was recommending potentially unsuitable early rollovers resulting in $3.8 million in excessive sales charges. According to FINRA, customers could have avoided these charges if they had held the UITs until their maturity dates.
Galvin Legal, PLLC is launching an investigation on behalf of investors who may have suffered losses investing with Oppenheimer & Co. If you suffered losses investing with Oppenheimer & Co, then Galvin Legal, PLLC may be able to help you recover your losses in a Financial Industry Regulatory Authority (“FINRA“) arbitration claim.
Oppenheimer & Co (CRD# 249) (SEC# 801-887, 8-4077)
As of April 4, 2020, Oppenheimer & Co’s FINRA BrokerCheck Report contains the following:
95 Regulatory Event Disclosures
172 Arbitration Disclosures
2 Bond Disclosures
Main Office Location
85 BROAD STREET
NEW YORK, NY 10004
85 BROAD STREET
NEW YORK, NY 10004
Business Telephone Number
Direct Owners and Executive Officers
VINER FINANCE INC., PARENT CO.
ALFANO, JEFFREY (CRD#:5127693), DIRECTOR – E.V.P – CFO
BENEDETTO, JOHN ANTHONY (CRD#:710318), DIRECTOR
CAPEZZUTO, JAMES ANDREW (CRD#:1845909), IA-CCO
HARRINGTON, EDWARD PATRICK (CRD#:2566682), EXECUTIVE VICE PRESIDENT – PRIVATE CLIENT SERVICES
LOWENTHAL, ALBERT GRINSFELDER (CRD#:313519), CHMN/DIR/CEO – OWNS 100% OF PHASE II FIN’L
LOWENTHAL, ROBERT STEVEN (CRD#:1639913), DIRECTOR
MCGUIRE, JOHN THOMAS (CRD#:1123013), MANAGING DIRECTOR/DEPUTY GENERAL COUNSEL- DIRECTOR OF LITIGATION
MCNAMARA, DENNIS PATRICK (CRD#:2938486), E.V.P./CLO/SECRETARY
MOLOKIE JR, LEON E (CRD#:1743402), EXECUTIVE VICE PRESIDENT – CHIEF OPERATIONS OFFICER
SIEGEL, DOUGLAS THORNLEY (CRD#:1143272), CHIEF COMPLIANCE OFFICER
FINRA requires brokerage firms to conduct due diligence on investments and to conduct a suitability analysis when recommending securities to a customer that takes into account the customer’s knowledge and experience. Brokerage firms that fail to conduct adequate due diligence or that make unsuitable recommendations can be held responsible for the customer’s losses in a FINRA arbitration claim.
This information is all publicly available and is being provided to you by Galvin Legal, PLLC.
Galvin Legal, PLLC is a national securities arbitration, securities mediation, securities litigation, securities fraud, securities regulation and compliance, and investor protection law practice. For more information on Galvin Legal, PLLC and its representation of investors, please visit www.galvinlegal.com or call 1-800-405-5117.