NASD charges Oppenheimer and CEO Lowenthal


This is the second time in eight months that NASD has charged the firm with failing to produce documents and information requested by NASD. The first complaint, issued in May 2005, involved an investigation of municipal bond transaction reporting violations.

"All regulated firms have a fundamental obligation to co-operate 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.

"The ability of NASD and other securities regulators to protect investors and police the markets depends upon compliance with that obligation. Today's matter is especially troubling not only because of the firm's repeated lack of co-operation with NASD, but more significantly because, as stated in the complaint, the CEO himself allegedly directed the firm to provide NASD with information he knew to be inaccurate" Goldsmith said.

In March 2003, a report jointly issued by NASD and other securities regulators showed that nearly one in three mutual fund transactions in front-end load mutual funds that appeared eligible for a breakpoint discount did not receive one.

As a result of those findings, NASD required approximately 2,000 broker-dealers that sold front-end load mutual funds during 2001-2002 – including Oppenheimer – to conduct a self-assessment of their compliance with mutual fund breakpoint discount requirements and report the results to NASD. As a result of the breakpoint sweep and ensuing NASD enforcement actions, more than $130 million has been returned to investors who did not receive appropriate breakpoint discounts.

In another matter involving Oppenheimer, NASD announced that it censured and fined the firm $250,000 for at least 230 late disclosures of reportable information about its brokers, including customer complaints, regulatory actions and investigations, and terminations. Reportable information on all registered brokers is maintained in NASD's Central Registration Depository and is available free of charge to the public through NASD's BrokerCheck.

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