Accusing the investment company, the market regulator claimed that it failed to maintain a sufficient anti-money laundering (AML) compliance program to identify and report suspicious penny stock transactions.
FINRA executive vice president and enforcement department head Brad Bennett said that broker-dealers must monitor customers’ accounts so that those accounts are not used for illegal activities, including money laundering and penny stock schemes, which can harm to investors.
"If Oppenheimer had an adequate AML and supervisory program in place, it would have made further enquiry into the penny stock sales that were the basis of this action," Bennett added.
During the probe, the market regulator found that from 19 August 2008 to 20 September 2010, the company marketed over a billion shares of 20 low-priced, highly speculative securities (penny stocks) without registration or an applicable exemption.
The governing system at the firm for penny stock transactions was also found to be inadequate and it was unable to decide whether stocks were restricted or freely tradable, claims FINRA.
Without admitting or denying FINRA’s findings, the company has agreed to settle the charges by paying $1.4m in fine.
