Oppenheimer Ordered to Repurchase $650,000 in Auction-Rate Securities

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.


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