The Financial Industry Regulatory Authority has fined Oppenheimer & Co $675,000 for charging unfair prices in municipal securities transactions and for failing to have an adequate supervisory system.

The Financial Industry Regulatory Authority has fined Oppenheimer & Co
$675,000 for charging unfair prices in municipal securities transactions and
for failing to have an adequate supervisory system.

The authority also ordered Oppenheimer to pay over $246,000 in restitution,
plus interest, to clients who were charged unfair prices. In addition, FINRA
fined Oppenheimer's head municipal securities trader, David Sirianni, $100,000
and has suspended him for 60 days. 

Between July 1, 2008, and June 30, 2009, Oppenheimer - via Sirianni - allegedly priced
89 client transactions from 5.01 per cent to 15.57 per cent above the firm's
contemporaneous cost.

“Sirianni purchased municipal securities from a broker-dealer on
Oppenheimer's behalf, held the bonds in inventory for at least overnight, and
then made the bonds available for resale at an unfair price to the firm's
customers. Sirianni was responsible for determining the prices paid by customers
in the 89 transactions,” FINRA said.

It added: “Oppenheimer's supervisory system was deficient because
supervisory personnel relied solely on a surveillance report that only captured
intra-day transactions to review the fairness of markups/markdowns in municipal
securities transactions.”

Oppenheimer and Sirianni neither admitted nor denied the charges, but
consented to the entry of FINRA's findings.

At the end of August, US authorities charged a former portfolio manager at
Oppenheimer with misleading investors about the valuation and
performance of a fund consisting of other private equity funds (see here).