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Oppenheimer & Co. To Pay $2.9M For ETF Sales

FINRA fined Oppenheimer & Co. Inc. $2.25 million and ordered the firm to pay over $716,000 to harmed clients for selling leveraged, inverse and inverse-leveraged exchange-traded funds without reasonable supervision as well as for soliciting unsuitable non-traditional ETFs. Over 30,000 non-traditional ETF transactions, totaling about $1.7 billion for customers, were processed by Oppenheimer representatives from August 2009 through September 2013, according to FINRA. Only two months prior to this activity FINRA advised broker-dealers of the risks and natural complexities of particular non-traditional ETFs through it Regulatory Notice 09-31. Subsequently, the firm instituted policies in August 2009 to stop its representatives from soliciting non-traditional ETFs to retail customers. The firm also prohibited representatives from buying ETFs unless the client matched particular criteria, including having over $500,000 in liquid assets. Even still, representatives continued to solicit retail customers to purchase non-traditional ETFs and to execute unsolicited non-traditional ETF transactions even though the customers did not meet the criteria. "Written [...]

By |June 8th, 2016|FINRA, Press Releases & News|
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Variable Annuities The Subject Of High Scrutiny

Recently, two FINRA enforcement officials emphasized at an insurance industry conference that variable annuities, which offer lifetime guaranteed income to investors but can be complicated and expensive, are still the subject of high scrutiny. “Variable annuities are just very frequently involved in our cases,” Russ Ryan, FINRA Senior Vice President and Deputy Chief of Enforcement, said Tuesday at an Insured Retirement Institute conference in the nation's capital. James Day, FINRA Associate Vice President and Enforcement Chief Counsel, stated that variable annuities "are at the sweet spot of complex products marketed to retirees and people about to retire." Both Ryan and Day noted FINRA's enforcement action against MetLife, which the regulatory authority hit with a record $25 million penalty for misleading variable annuity sales. In that instance, FINRA found that MetLife financial advisors made misrepresentations and omissions of fact in 72% of 35,500 applications the firm approved between 2009 and 2014 to replace clients' old variable annuities with [...]

By |June 7th, 2016|FINRA|
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Wells Fargo Broker Banned By FINRA

Former Wells Fargo broker John Christopher Pierce agreed to be barred from working with any firm registered with FINRA after he allegedly stole from his clients' bank accounts. At the time of the alleged misconduct, Pierce was both a registered broker-dealer with Wells Fargo as well as a personal banker at a Wells Fargo Bank branch in Pennsylvania, according to a letter accepted by FINRA. The scheme allegedly began at the beginning of March when he issued an instant debit card with a daily withdrawal limit of $1,500 under the name of a Wells Fargo Bank customer. Pierce then used the card to make two unauthorized ATM withdrawals totaling $1,380 for his personal use. After a complaint was made with the bank, Pierce replenished the account with funds from another customer without consent. Pierce was registered with Wells Fargo Advisors in January 2014 and was terminated this past March. He agreed to be barred from associating with any FINRA [...]

By |June 3rd, 2016|Broker Check, FINRA, Fraud, Press Releases & News|
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NBA/NFL Players Win $819k FINRA Award

Two former professional athletes, one from the National Basketball Association (NBA) and one from the National Football League (NFL), won an $819,000 arbitration award against Morgan Stanley Smith Barney in a case that revolved around the broker-dealer's negligent supervision of a former broker. The arbitration was brought by Keyon Dooling, who played guard in the NBA for twelve years, and John St. Clair, who played offensive tackle in the NFL for eleven years, against their former broker Aaron Parthemer, who was barred from the securities industry in 2015 by FINRA according to his BrokerCheck report. Dooling and St. Clair both invested in Global Village Concerns, a sportswear company. Dooling additionally invested in Club Play, a Miami Beach nightclub. Both investments, however, became worthless. “These guys worked incredibly hard for their money, and it is gratifying that the arbitrators found Morgan Stanley liable for failing to properly supervise its financial adviser,” said the athletes' attorney in a statement. “Too often, professional [...]

By |May 24th, 2016|Broker Check, FINRA, Press Releases & News|
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