Two commissioners at the Securities and Exchange Commission are railing against the agency’s decision to waive sanctions against Oppenheimer & Co. following the New York-based broker-dealer’s recent $20 million fine for penny stock and anti-money laundering violations.
Oppenheimer & Co. Inc. submitted a letter dated Dec. 10, requesting that the SEC grant a waiver of the “bad actor” disqualification under Rule 506 of Regulation D under the Securities Act of 1933. The SEC granted the request on Jan. 27, the same day Oppenheimer agreed to pay the $20 million fine — $10 million to the SEC and $10 million to the Treasury Department’s Financial Crimes Enforcement Network.
Oppenheimer & Co. is not affiliated with OppenheimerFunds.
In a Wednesday dissent, SEC Commissioners Luis Aguilar and Kara Stein argued that in granting the waiver, the Commission has turned a “blind eye to this firm’s repeated violations,” and that the SEC’s waiver departs from the Commission’s “long-established standard criteria.”
Rep. Maxine Waters, D-Calif., ranking member on the House Financial Services Committee, said in a Wednesday statement that she was “deeply disappointed” by the SEC’s decision to grant Oppenheimer & Co. a “full waiver of sanctions” after Oppenheimer admitted “serious violations” of the securities laws, and considering the firm’s “extensive recidivist history.”
Investors and the American public, Waters said, “are greatly disserved when our regulators throw away valuable enforcement tools and adopt a policy of ‘too-big-to-bar’”.
Oppenheimer & Co.’s “’bad actor’ disqualification was triggered by the firm’s egregious misconduct,” Aguilar and Stein state in their dissent.