Oppenheimer paying $20M in settlements with US regulators

WASHINGTON (AP) — Oppenheimer & Co. is paying $20 million in civil settlements with U.S. regulators who accused the investment firm of improper sales of penny stocks and inadequate controls against money laundering.

The investment firm agreed to pay $10 million and is admitting wrongdoing in its settlement with the Securities and Exchange Commission announced today. Oppenheimer also is paying $10 million in a settlement with the Treasury Department's Financial Crimes Enforcement Network, known as FinCEN.

The SEC said Oppenheimer sold billions of shares of penny stocks in unregistered offerings on behalf of customers, ignoring red flags and aiding the customers' illegal activity. Oppenheimer admitted in its agreement with FinCEN that it failed to maintain an adequate program to prevent money laundering.

New York-based Oppenheimer said it was pleased to resolve the matter. "The ability to finalize matters involving two regulatory agencies in a coordinated manner was helpful in bringing this matter to a conclusion," the firm said in a statement.

An admission of wrongdoing in an SEC settlement by a company or individual is fairly rare and is deemed to indicate serious harm to investors. Oppenheimer also agreed to refrain from future violations of the securities laws and to be censured, bringing the possibility of a stiffer sanction if the violation is repeated. In addition, Oppenheimer agreed to take measures such as hiring an independent consultant to review its procedures over a five-year period.