Wednesday, 2 September 2015
Last updated 31 min ago
Feb 21 2008 | 1:17pm ET
Oppenheimer & Co. has agreed to pay $4.5 million to settle mutual-fund market-timing charges, the Financial Industry Regulatory Authority said today.
FINRA alleged that Oppenheimer failed to adequately supervise five traders who made thousands of improper trades on behalf of hedge-fund clients. According to the complaint, the traders set up some 580 accounts for 15 hedge funds in an effort to circumvent trading blocks put in place by mutual funds to stop market-timing, as well as to conceal their identity.
The trades, which took place in 2003, netted Oppenheimer some $9 million in profits.
“Oppenheimer’s lack of appropriate supervisory systems and controls led to the firm’s failure to heed hundreds of warning and requests it received from mutual funds and life insurance companies for the firm’s brokers to cease this trading for hedge funds,” Susan Merrill, FINRA’s enforcement chief, said.
Oppenheimer agreed to pay $4.25 million in restitution and a $250,000 without admitting wrongdoing. The five brokers have been barred from the securities industry for failure to cooperate with FINRA’s probe, although one has applied to the Securities and Exchange Commission to get the ban lifted.
May 27 2015 | 2:15pm ET
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