WASHINGTON– The Financial Crimes Enforcement Network (FinCEN), working closely with the U.S. Securities and Exchange Commission (SEC), has assessed a $20-million civil money penalty against Oppenheimer & Co., Inc. for “willfully violating” the Bank Secrecy Act (BSA).
According to FinCEN, Oppenheimer, a securities broker-dealer in New York, admitted that it failed to establish and implement an adequate anti-money laundering program, failed to conduct adequate due diligence on a foreign correspondent account, and failed to comply with requirements under Section 311 of the USA PATRIOT Act.
FinCEN and the New York Stock Exchange assessed a civil money penalty of $2.8 million against Oppenheimer in 2005 for similar violations. In 2013, the Financial Industry Regulatory Authority fined the firm $1.4 million for violations of securities laws and anti-money laundering failures.
“Broker-dealers face the same money laundering risks as other types of financial institutions,” noted FinCEN Director Jennifer Shasky Calvery in a statement. “And by failing to comply with their regulatory responsibilities, our financial system became vulnerable to criminal abuse. This is the second time FinCEN has penalized Oppenheimer for similar violations. It is clear that their compliance culture must change.”
From 2008 through May 2014, Oppenheimer conducted business without establishing and implementing adequate policies, procedures, and internal controls reasonably designed to detect and report suspicious activity. FinCEN said it identified 16 customers who engaged in patterns of suspicious trading through branch offices in five states. All the suspicious activity involved penny stocks, which “typically are low-priced, thinly traded, and highly speculative securities that can be vulnerable to manipulation by stock promoters and ‘pump-and-dump’ schemes,” FinCen said.
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