As part of concurrent settlements with the Securities and Exchange Commission (SEC) and the Financial Crimes Enforcement Network (FinCEN), Oppenheimer & Co. Inc. (Oppenheimer) has admitted it is guilty and agreed to pay $20 million for engaging in unregistered sales of penny stocks.
According to the SEC Order, one Oppenheimer Financial Advisor and his immediate supervisor, an Oppenheimer Branch Office Manager, engaged in the sales of 2.5 billion shares of unregistered penny stocks for an investor customer. Those trades generated $12 million, of which Oppenheimer was paid $588,400 in commissions. The SEC Order states further that Oppenheimer personnel was aware of red flags indicative of illegal unregistered penny stock trades and failed to property follow up on those warning signs. Further, Oppenheimer failed to supervise its employees by failing to establish procedures to ensure its employees comply with Section 5 of the Securities Act.
Stockbrokers, financial advisors, and other financial professionals have been known to engage in many types of fraudulent and unlawful misconduct, including participating in the sale of unregistered penny stocks and other securities, which violate industry rules and procedures. In order to protect investors from broker misconduct, FINRA rules require brokerage firms to establish and implement a supervisory system. The implementation of these rules requires employees to be monitored to ensure compliance with federal and state securities laws, securities industry rules and regulations, and the brokerage firm’s own policies and procedures. If brokerage firms and their supervisors fail to establish and implement these protective supervisory measures, they may be held liable to investors for losses stemming from a broker’s misconduct. As a result, investors who have suffered losses due to a broker or financial advisor’s unlawful misconduct can bring forth claims to recover damages against brokerage firms like Oppenheimer & Co., which have a duty to supervise its employees in order to prevent broker misconduct.
Have you suffered losses in your Oppenheimer account? Have you suffered losses from a penny stock scam? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is actively investigating and accepting clients with valid claims against Oppenheimer brokers who may have engaged in the unlawful sale of unregistered penny stocks and caused investors losses.
For over , Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our firm are devoted to representing investors and financial industry professionals throughout the United States and internationally! Please visit our website, www.secatty.com, call (800) 732-2889, or email Mr. Pearce at firstname.lastname@example.org for answers to any of your questions about this article and/or any related matter.