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FINRA Fines Oppenheimer $4.5 Million for Market Timing

The latest on the market-timing settlement front: Oppenheimer agrees to pay FINRA $4.5 million for mutual-fund market timing conducted by five of its traders on behalf of hedge fund clients. 

Once again, a firm is stung by an apparent “head in the sand” compliance and supervisory approach to a small group of its reps acting on behalf of a small number of high-value clients. This in the face of what FINRA describes as “about 200 communications from 65 mutual fund companies” regarding the short-term trading those companies were noting.

Lessons: (1) establish and enforce consistent compliance systems; (2) don’t make exceptions for “high value” clients or reps; (3) don’t ignore apparent red flags.

Full post as published by OverRegd - Securities Regulation and Litigation Blog on February 21, 2008 (boomark / email).