FINRA fines Oppenheimer $3.75M in employee fraud case

NEW YORK (AP) — The Financial Industry Regulatory Authority is ordering Oppenheimer & Co. to pay $3.75 million for failing to supervise an employee who defrauded clients and the producers of a canceled Broadway musical.

FINRA says Oppenheimer didn't properly investigate Mark Hotton before hiring him, didn't closely supervise him after he was sued for fraud, and didn't respond to "red flags" raised by his actions.

Oppenheimer, now part of CIBC World Markets, didn't immediately respond to a request for comment.

Hotton scammed the producers of the musical "Rebecca" out of tens of thousands of dollars by telling them he would help them raise $4 million. He also defrauded a Connecticut real estate company out of hundreds of thousands of dollars. In October Hotton was sentenced to 34 months in prison.