FINRA Fines Oppenheimer $1 Million

FINRA is a non-governmental regulator for securities firms doing business in the United States. It was created this year through the consolidation of NASD and NYSE member regulation.

Oppenheimer, a unit of Oppenheimer Holdings Inc., must also use an independent consultant to evaluate its policies, systems and procedures when responding to information requests from regulators, based on a settlement with FINRA.

"Oppenheimer is pleased to put this matter, which arose in 2003, behind us," an external spokesman for the company said. "Oppenheimer is especially pleased to note that all allegations against its Chairman and Chief Executive Albert Lowenthal were dismissed by FINRA in their entirety."

FINRA predecessor NASD began an investigation in 2003 to review 2,000 broker-dealers that sold front-end load mutual funds in 2001 and 2002. The NASD investigation showed that nearly one-third of mutual fund transactions in front-end load mutual funds that appeared eligible for a breakpoint discount did not receive one. Breakpoints are specified values at which customers are entitled to pay smaller sales loads.

FINRA found on two occasions that Oppenheimer submitted inaccurate and incomplete data to NASD's request to perform a self-assessment of its breakpoint discount practices.

Oppenheimer voluntarily refunded more than $800,000 to clients related to the review, most of which was refunded more than two years ago, the spokesman said.

Oppenheimer did not acknowledge any wrongdoing when settling the investigation and agreeing to the fine.