WASHINGTON (AP) — The Financial Industry Regulatory Authority said Monday that it has fined Oppenheimer & Co. $1.4 million for selling unregistered penny stock shares and failing to have an adequate compliance program to detect and report suspicious penny-stock transactions.
The industry watchdog said that from 2008 to 2010, Oppenheimer sold more than a billion shares of 20 penny stocks without registrations. Penny stocks are a term for low-priced and highly speculative securities.
According to FINRA, some customers deposited large blocks of penny stocks shortly after opening the accounts, and then liquidated the stock and transferred proceeds out of the accounts. These were "red flags" that should have prompted further review, it said.
Recommended For You
Instead, the firm's systems and procedures governing penny stock transactions were inadequate, and were unable to determine whether stocks were restricted or freely tradable, according to FINRA. Oppenheimer also failed to conduct adequate supervisory reviews to determine whether the securities were registered.
In addition to the fine, Oppenheimer must also retain an independent consultant to conduct a comprehensive review of the adequacy of its penny-stock and related policies, systems and procedures.
The company agreed to the sanctions to resolve charges.
Oppenheimer, a unit of New York-based Oppenheimer Holdings Inc., said in a statement that the sales occurred a number of years ago, and were mostly conducted by brokers no longer associated with the firm. The company said it has significantly tightened its policies and is happy to put the matter behind it.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
