Updated from 11 a.m.
Securities regulators are once again getting tough with
Oppenheimer & Co.
for failing to cooperate with an investigation.
For the second time in eight months, the NASD has charged Oppenheimer with not producing "documents and information requested'' by regulators. This time, the NASD has upped the ante by also filing charges against Oppenheimer CEO Albert "Bud" Lowenthal.
The latest charges stem from an NASD investigation into the firm's policy on awarding volume markdowns to customers who buy certain mutual fund products ("break-point discounts" in industry parlance). In the earlier action, the NASD charged the brokerage with impeding an investigation into municipal bond trades.
"All regulated firms have a fundamental obligation to cooperate with NASD requests for information by providing complete, accurate and responsive data in a timely manner,'' says Barry Goldsmith, NASD executive vice president and head of enforcement. "Today's matter is especially troubling not only because of the firm's repeated lack of cooperation with NASD, but more significantly because ... the CEO himself allegedly directed the firm to provide NASD with information that he knew to be inaccurate.''
In the administrative complaint, the NASD alleges that Lowenthal knew Oppenheimer was submitting "flawed'' information about its breakpoint discount policy to the NASD, in response to a 2003 regulatory request for the information.
A hearing on the charges is pending. The company, which is not associated with the mutual fund firm Oppenheimer Funds, said in a statement Monday that "based on a preliminary review of the allegations contained in the complaint, the Company believes that it does not fairly reflect the operative facts and the sworn testimony already given in this matter. Furthermore the Company respectfully disagrees with the primary allegation with respect to Mr. Lowenthal. The person to whom the responsibility for the survey was delegated had more than 25 years of industry experience at the time and was not incapacitated, contrary to the allegations in the NASD complaint."
Meanwhile, in another regulatory action, the NASD said it had reached a $250,000 settlement with Oppenheimer over allegations it was late in reporting infractions by its brokers to regulators.
Last month Oppenheimer paid a $4.4 million fine to settle several investigations with the NYSE.
The firm is still under investigation for its role in the mutual fund trading scandal. The firm was the home base of operation for Michael Sassano, who once was one of the top market-timing brokers on Wall Street.