The Financial Industry Regulatory Authority (FINRA) has fined Oppenheimer and Co. $1,425,000 for the sale of unregistered penny stock shares and for failure to provide an adequate anti-money laundering (AML) compliance program, which would detect and report suspicious penny stock transactions.
Oppenheimer must also retain an independent consultant to conduct a comprehensive review of the adequacy of Oppenheimers penny stock and AML policies, systems and procedures. Oppenheimer agreed to the sanctions to resolve charges first brought against the firm in a FINRA complaint in May of this year.
Broker-dealers are required by federal securities laws and FINRA rules to monitor customers accounts so that those accounts are not used for illegal activities, such as money laundering and penny stock schemes that can cause considerable harm to investors. If Oppenheimer had an adequate AML and supervisory program in place, it would have made further inquiry into the penny stock sales that were the basis of this action, Brad Bennett, FINRA Executive Vice President and Head of the Department of Enforcement, said in a statement.