Oppenheimer & Co. has been ordered to pay $250,000 for failing to supervise the improper market timing of mutual fund shares from January through September 2003, according to FINRA. The firm has also been ordered to pay $4.25 million in restitution to more than 60 mutual fund companies.

 

"Market timing harms long-term fund investors who ultimately bear the brunt of higher costs long after market timers have moved on to the next quick trade," said Susan Merrill, FINRA executive vice president and chief of enforcement. "Oppenheimer's lack of appropriate supervisory systems and controls led to the firm's failure to heed hundreds of warnings and requests it received from mutual funds and life insurance companies for the firm's brokers to cease this trading for hedge funds."

 

According to news reports, Oppenheimer failed to prevent five traders from improper and short-term trading of mutual funds on behalf of hedge fund customers. Oppenheimer also failed to establish, maintain or enforce written procedures and supervisory systems established to detect and prevent market timing activities, and failed to maintain records of the trading.

 

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

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