Oppenheimer Holdings Inc Agrees to Pay $3 Million to Settle Charges of Inappropriate ETF Sales
Without admitting or denying any wrongdoing, Oppenheimer & Co agreed to pay almost $3 million as fines and restitution for settling federal charges that it sold risky exchange-traded funds incorrectly to elderly customers who are mostly averse to risks and also to other retail investors.
On Wednesday, the Financial Industry Regulatory Authority said New York City based Oppenheimer Holdings Inc unit will pay $2.25 million as fines and will compensate almost 150 customers with $716,832.
Oppenheimer said in a statement that the company was happy to settle the matter and "has for several years put in effective enhanced procedures and controls surrounding the sale of leveraged ETFs."
The Financial Industry Regulatory Authority (FINRA) said starting from August 2009 till September 2013, Oppenheimer sold inverse and inverse-leveraged ETFs to clients which were inappropriate for their age, purpose of investment and finances. Those also were not properly supervised to make sure that these sales were not done.
FINRA said, Oppenheimer made about 30,740 non-traditional ETF transactions which totaled to $1.7 billion in retail brokerage accounts in the period stretching over four year period.