WASHINGTON (AP) — The Financial Industry Regulatory Authority said Monday that it has fined Oppenheimer & Co. $1.4 million for selling unregistered penny stock shares and failing to have an adequate compliance program to detect and report suspicious penny-stock transactions.
The industry watchdog said that from 2008 to 2010, Oppenheimer sold more than a billion shares of 20 penny stocks without registrations. Penny stocks are a term for low-priced and highly speculative securities.
According to FINRA, some customers deposited large blocks of penny stocks shortly after opening the accounts, and then liquidated the stock and transferred proceeds out of the accounts. These were "red flags" that should have prompted further review, it said.
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