Oppenheimer & Co. Inc. will pay $1.575 million in fines and another $1.85 million to customers for failure to report mandated information to the Financial Industry Regulatory Authority (FINRA). FINRA fined the investment firm, according to the action, after it failed to timely report required information, failed to yield documents in discovery to clients who filed arbitrations, and for failure to apply appropriate sales charge waivers to customers.
Brad Bennett, FINRA’s executive vice president and chief of enforcement, explained in a statement that is important for firms to make sure that their supervisory programs “are designed to comply with FINRA reporting requirements,” and that they have the proper procedures in place to ensure their employees are directed to make the filings. He went on to state, “FINRA uses this information to identify and initiate investigations of firms and associated persons that pose a risk to investors.”
FINRA found that Oppenheimer neglected to report more than 350 required regulatory documents over the past several years, including disciplinary actions initiated by Oppenheimer against employees, securities-related litigation claims, and settlements connected to securities-related arbitration and lawsuit filings.
FINRA also found that Oppenheimer did not provide necessary documents throughout discovery to seven arbitration plaintiffs. From 2010 to 2013, the action claims that the company failed to appropriately oversee former registered agent Mark Hotton. Regarding this action, FINRA requires Oppenheimer to pay out more than $700,000 and make available the copies of the documents that were not provided in each claimant’s case.
Oppenheimer also was found to have not successfully managed the application of sales charge waivers to qualified mutual fund sales, according to FINRA. The company depended on its financial advisors to adequately determine when sales charge waivers were appropriate but offered no written guidelines on how the advisors should make that determination. FINRA’s action resulted in Oppenheimer being forced to pay out $1.14 million in restitution to consumers who were eligible for mutual fund sales charge waivers but did not receive them.
SEC: Renewable Energy Company defrauds investors of $30M
The founder and CEO of 808 Renewable Energy Corp., along with three other top executives, was charged with fraud by the Securities and Exchange Commission. The SEC reports the four leaders of the California-based renewable energy company profited from defrauding investors.
CEO Patrick Carter, Chief Operating Officer Peter Kirkbride, and sales representatives Martin Kincheloe and Thomas Flowers raised more than $30 million from hundreds of investors during a five-year span that began in 2009, according to the SEC. Three firms are named in the documents: 808 Investments LLC, West Coast Commodities LLC, and T.A. Flowers LLC.
Flowers and T.A. Flowers LLC have submitted a settlement offer to SEC’s action, agreeing to complete injunctive relief, disgorgement and prejudgment interest totally $1.4 million, penny stock bars, and a penalty of $160,000 weighed against Flowers. The settlement, which is still pending court approval, allows Flowers and T.A. Flowers LLC to rectify the accusations without admitting or denying guilt.
Pharmaceutical Exec, friend found liable in insider trading scheme
A jury has sided with the Securities and Exchange Commission regarding charges made against a former director at the pharmaceutical company InterMune Inc., and his friend, a British restaurant owner. The SEC lodged the complaint more than two years ago, in October of 2014, claiming Sasan Sabrdaran, the former director of drug safety risk management at InterMune Inc., provided Farhang Afsarpour with private insider information.
As a result, Afsarpour used the information to his advantage and illegally collected more than $1 million from Intermune trading.
Andrew Ceresney, director of the SEC’s Division of Enforcement, says Afsarpour manipulated the system and profited “at the expense of ordinary investors who played by the rules.”
“This jury verdict reaffirms our commitment to aggressively root out and prosecute insider trading schemes to protect the integrity of our markets,” Ceresney said in a statement.
