Oppenheimer Holding, Inc., historically a Canadian company, is the parent company of Oppenheimer & Co., its brokerage subsidiary. It is listed on the NYSE and is a registered broker-dealer and investment advisory firm. In 2008, Oppenheimer acquired a major part of CIBC World Markets’ U.S. capital markets business. Oppenheimer Holdings also has recently changed its jurisdiction of incorporation from Canada to the United States and is planning to expand further into the southern U.S. states, extending its influence in the U.S. financial arena.
Oppenheimer Holding, Inc. is licensed by the Financial Industry Regulatory Authority, or FINRA. That means Oppenheimer is subject to certain laws designed to protect investors and their assets. One of these laws obligates Oppenheimer to monitor each one of their representatives to ensure they are trading ethically, honestly, and in the interests of the client. When Oppenheimer fails to supervise their brokers, it allows any unscrupulous representatives to conduct fraudulent trading, which then causes investors significant losses. When this happens, FINRA allows investors the right to hold Oppenheimer legally liable to repay any damages caused.
History of Red Flags and No Oversight
Oppenheimer has had an unusual amount of activity the last 10 years, most of it centering on one issue: an inability or refusal to supervise their representatives effectively. The most significant demonstration of this lack of oversight is in a case from this year – the hiring of Mark Hotton. Hotton was hired by Oppenheimer in late 2005 despite a history of fraud, a criminal record, and several customer complaints. In fact, shortly after he was hired, Hotton was sued by his former business partners for misappropriating $4 million. Later on, he was sued by another partner for another incident in which he wrongly diverted $5 million more. Despite all this, Oppenheimer asserted that they had no reason to believe that Hotton was a danger to their investors.
In 2007, Hotton began wiring money out of customer accounts to his outside businesses. The 31 transfers totaled over $3 million, and while Oppenheimer noticed this suspicious behavior, they did not act. Though he violated both Oppenheimer and FINRA policies, he was not fired, stopped, or even watched. For their incredible negligence and inaction, Oppenheimer was fined by FINRA in the amount of $2.5 million in 2015. Hotton’s behavior is an example of why FINRA requires oversight over brokers, and why firms must be held responsible for them.
Our Experienced Lawyers Can Recover Your Losses
If you’ve been cheated out of your investments by fraudulent or negligent behavior, either by your broker or his/her firm, let Meyer Wilson fight for you. We have the experience and resources to file successful claims against large financial institutions, no matter their size or pedigree. While FINRA gives you the right to file claims against negligent firms, their aim is policing and enforcement – our aim is to reclaim what you have lost.
