Oppenheimer & Co. says it will pay a $1 million fine to settle charges by the Financial Industry Regulatory Authority that it turned in false information regarding mutual fund breakpoints. The company also has agreed to submit to having an independent consultant conduct an audit regarding how Oppenheimer handles regulatory inquiries. By agreeing to the settlement terms, Oppenheimer is not agreeing to or denying FINRA’s allegations.
FINRA says it initially asked Oppenheimer for the information in March 2003 when the self-regulatory organization (then the NASD) looked at over 2000 broker-dealers who had sold front-end loan funds over a two-year period.
FINRA’s request was based on the discovery that nearly one in three mutual fund transactions in front-end loans seemed to qualify for a discount but did not get one.
FINRA says that in June and November 2003, Oppenheimer turned in data that was not complete or accurate after FINRA’s request that brokers assess their breakpoint practices. The term breakpoint refers to discounts or other benefits clients can obtain if they buy a certain number of funds at the same time.
The first time FINRA received the data, FINRA says it knew the information was “flawed” and notified Oppenheimer immediately.
The second assessment also contained “obvious deficiencies,” says FINRA. Linked accounts were not identified, ineligible transactions were included, overcharged trades were not properly identified, and correct discount information was left out.
When a broker-dealer engages in inappropriate actions, investors, unfortunately, can incur financial losses. The best chance an investor has of recouping their lost investment(s) is to retain the services of an experienced stockbroker fraud lawyer who can help you.
Related Web Resources:
Mutual Fund Breakpoints: A Break Worth Taking, FINRA, January 14, 2003