Oppenheimer Agrees To Pay $10 Mln To Settle With SEC On Improper Stock Sales

(RTTNews) - The Securities and Exchange Commission charged Oppenheimer & Co. with violating federal securities laws while improperly selling penny stocks in unregistered offerings on behalf of customers. Oppenheimer (OPY) agreed to admit wrongdoing and pay $10 million to settle the SEC's charges. Oppenheimer will pay an additional $10 million to settle a parallel action by the Treasury Department's Financial Crimes Enforcement Network or FinCEN.

According to the SEC's order instituting a settled administrative proceeding, Oppenheimer engaged in two courses of misconduct. The first involved aiding and abetting illegal activity by a customer and ignoring red flags that business was being conducted without an applicable exemption from the broker-dealer registration requirements of the federal securities laws. The customer was Gibraltar Global Securities, a brokerage firm in the Bahamas that is not registered to do business in the U.S.

Oppenheimer executed sales of billions of shares of penny stocks for a supposed proprietary account in Gibraltar's name while knowing or being reckless in not knowing that Gibraltar was actually executing transactions and providing brokerage services for its underlying customers, including many in the U.S. The SEC separately charged Gibraltar in 2013 for its alleged misconduct.