FINRA has ordered Oppenheimer & Co. to repurchase $650,000 in auction-rate
securities from investors Jordan Moffet and Margot Trombley. The firm,
one of the largest sellers of the products to individual investors, had
already voluntarily agreed in a settlement with New York State Attorney
General Andrew Cuomo to repurchase some of the products from investors
with accounts under $1 million.
Moffet and Trombley had accused Oppenheimer of negligence, fraud, breach
of contract, and
breach of fiduciary duty. In their suit, the two investors sought $700,000 in actual damages, plus
legal fees, interest, and punitive damages. The panel ordered Oppenheimer
to reimburse the investors for a portion of their filing fees and to pay
$18,441.98 in expert witness fees in addition to the repurchasing of the
securities. Punitive damages, however, were not awarded.
The FINRA panel's ruling was the first FINRA ruling against Oppenheimer
for actions related to the sale of auction-rate securities. Additional
cases filed against the firm are expected.