FINRA Orders Oppenheimer To Pay $3.8M
Oppenheimer & Co. (OPY) must pay over $3.8M in restitution to customers who may have had to pay excess sales fees for the early rollovers of their United Investment Trusts (UITs). The order comes from the Financial Industry Regulatory Authority (FINRA) and includes an $800K fine for not reasonably supervising these early UIT rollovers.
The self-regulatory organization (SRO) contends that from 1/2011 to 12/2015 of the $6.4B of United Investment Trust transactions that Oppenheimer executed, $753.9M of these were early rollovers.
What Is A Unit Investment Trust?
UITs allow investors to have a stake in a set portfolio of securities that end on a certain maturity date. They are usually long-term investments with maturity dates of up to 2 years. An investor that rolls over a UIT earlier than the maturity date may end up having to pay higher sales charges. This means such a course of action may not be suitable for every type of investor.
According to FINRA, Oppenheimer did not properly supervise these rollover transactions and the broker-dealer lacked a supervisory system that was designed in a manner reasonable enough to accurately oversee whether the early Unit Investment Trust rollovers were suitable for customers.
Because of this inadequate supervision, the SRO contends, Oppenheimer customers may have been charged over $3.8M in sales fees that they wouldn’t have had to pay otherwise if they’d held onto their UITs until they reached their maturity dates.
Unsuitable UIT Recommendations
A broker that suggests a customer opt for an early rollover of a UIT and the transactions result in excess and unnecessary fees may be accused of making an unsuitable investment recommendation that is not in the investor’s best interests. This is especially true if the move is inappropriate for them, their portfolios, and the degree of risk they can take on.
Meantime, brokerage firms are supposed to properly supervise their brokers and the transactions they recommend and authorize.
Investment Fraud Lawyers
At Shepherd Smith Edwards and Kantas (SSEK Law Firm), our Unit Investment Trust fraud attorneys represent clients throughout the US who have suffered unnecessary losses because of the inappropriate recommendations of a broker and his/her firm.
If you suspect that you were charged unnecessary fees for your UIT rollover or other losses while working with an Oppenheimer broker, contact SSEK Law Firm today to schedule your free, no-obligation case consultation.