NASD Fines Oppenheimer and Co. $800,000 for Failing to Respond to Regulatory Requests, Failing to Report Municipal Transactions Accurately
Washington, D.C. — NASD announced today that it has fined New York's Oppenheimer & Co. Inc. $800,000 for failures to respond to regulatory requests for information; failures to report, or to report timely and accurately, thousands of municipal securities transactions, and failure to retain business-related internal email.
In addition to the fine, Oppenheimer is obligated to retain, at its own expense, outside counsel to review, modify, and enhance Oppenheimer's written supervisory procedures related to reporting municipal securities transactions and responding to regulatory requests for information, including requests from NASD.
The sanctions imposed stem from the settlement of a complaint filed by NASD against Oppenheimer in April 2005.
"Firms must respond timely and completely to regulatory requests, report transactions timely and accurately, and maintain business-related electronic communications," said James S. Shorris, NASD Executive Vice President and Head of Enforcement. "Oppenheimer repeatedly failed to comply with these fundamental regulatory obligations."
NASD found that Oppenheimer failed to respond timely and fully to a September 2004 NASD request that it provide information about its retention of electronic communications for 20 employees who traded municipal securities and whose emails were therefore necessary to an NASD investigation into Oppenheimer's trade reporting deficiencies. In May 2005, Oppenheimer responded in writing to only one portion of the September 2004 request, but never provided information responsive to the balance of NASD's request.
Oppenheimer also failed to respond timely to an August 2003 request for trade confirmations for municipal securities transactions. NASD renewed its request for confirmations on three occasions, yet Oppenheimer did not produce all confirmations until more than a year after the original request.
NASD also found that from January 2003 through May 2004, Oppenheimer failed to timely report to the Municipal Securities Rulemaking Board (MSRB) more than 6,100 interdealer municipal securities transactions and eventually reported hundreds of these transactions inaccurately. In addition, during May and part of June 2003, the firm failed to accurately report to MSRB the price, time, commission or capacity in which it acted in more than 1,500 customer trades. During the same time period, it failed to report more than 600 municipal securities transactions with customers.
In settling these matters, Oppenheimer neither admitted nor denied the charges, but consented to the entry of NASD's findings.
Investors can obtain more information about, and the disciplinary record of, any NASD-registered broker or brokerage firm by using NASD's BrokerCheck. NASD makes BrokerCheck available at no charge to the public. In 2004, members of the public used this service to conduct more than 3.8 million searches and request almost 190,000 reports for existing brokers or firms. Investors can link directly to BrokerCheck at www.nasdbrokercheck.com. Investors can also access this service by calling (800) 289-9999.
NASD is the leading private-sector provider of financial regulatory services, dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. NASD touches virtually every aspect of the securities business - from registering and educating all industry participants, to examining securities firms, enforcing both NASD rules and the federal securities laws, and administering the largest dispute resolution forum for investors and registered firms. For more information, please visit our Web site at www.nasd.com.