Articles Tagged with Oppenheimer

Former Georgia Financial Advisor Allegedly Ran Ponzi Scheme Through Southport Capital 

On August 20, 2021, the Securities and Exchange Commission (SEC) filed an emergency action seeking to stop a $110 million Ponzi scheme allegedly operated by ex-Oppenheimer stockbroker, John Justin Woods.  

The fraud, involving Horizon Private Equity III, LLC was run through Woods’ registered investment advisor Livingston Group Asset Management Company, (doing business as Southport Capital). On August 24, 2021, the United States District Court for the Northern District of Georgia issued a temporary restraining order and asset freeze against Woods and Horizon.

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. 

Recently, Oppenheimer was found liable for the conduct of one of its former brokers named Mark Hotton. Hotton joined Oppenheimer in November 2005, and proceeded to fleece a number of his clients, according to financial regulators. FINRA, the Financial Industry Regulatory Authority, has filed a disciplinary action against Hotton which is still pending.

According to the complaint, Hotton outright stole almost $6 million from his brokerage customers, and directed another $2.5 million to outside businesses that Hotton was affiliated with in some way. These numbers don’t even include the millions of dollars that FINRA believes that Hotton caused by excessively trading, or churning, customer accounts to generate commissions for himself.

The level of fraud that Hotton was engaging in should be shocking if it wasn’t becoming increasingly commonplace. In 2006, a customer filed a lawsuit against Hutton after it was convinced by Hotton to invest $4 million in real estate transactions. The customer claimed that Hotton simply stole the entire investment, which was accomplished by forging contracts, forging mortgages, forging account statements, and directing the investment being made into a shell corporation that he had created with a similar name to the company that was supposed to be invested in. Ultimately, that lawsuit was settled for millions of dollars which Hotton was individually liable for. Yet this lawsuit, its allegations, and its results were never disclosed to other customers as regulations require, permitting Hotton to continue to seek new customers to bilk.

Date: August 7, 2013

The attorneys at Shepherd, Smith, Edwards & Kantas LLP are investigating claims by investors with Oppenheimer & Co.  Although the firm’s investigations are usually target more specifically at particular conduct of a firm or broker, Oppenheimer & Co.’s supervisory system has been found so woefully inadequate by numerous regulators and arbitration Panels over the last several years that almost any trading strategy permitted in Oppenheimer customer accounts becomes suspect.

For example, in 2008 the Massachusetts Securities Division filed suit against Oppenheimer for its sales of Auction Rate Securities (ARSs).  Specifically, the regulator alleged that Oppenheimer marketed ARSs as safe alternatives to money markets and certificate of deposits (CDs).  In actuality, ARSs are complex debt securities that can suffer complete failures and ultimately leave the investor holdings a completely illiquid asset with no way to get their money back out.  The regulator further claimed that Oppenheimer was aware of many disruptions and failures that occurred in the ARS market in 2007, but blithely ignored these warnings.  Oppenheimer did not investigate the potential ramifications for the ARS securities that had been, and were currently being, sold to their clients.  Oppenheimer did not warn its clients of these warning signs.

SEC Investigating Ex-Oppenheimer Executive for Securities Law Violations

According to, Robert Okin, Oppenheimer & Co.’s (OPY) former retail brokerage head, is under investigation by the Securities and Exchange Commission. In October, the agency’s enforcement division notified Okin that, based on a preliminary determination, it intended to file charges against him for securities law violations, including failure to supervise.

Okin is no longer with Oppenheimer. He resigned earlier this month to pursue “other interests.” Okin denies violating the Securities Exchange Act.

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