On Thursday, the Securities and Exchange Commission announced settlements in the cases of three Oppenheimer & Co. employees in Boca Raton, Florida. Scott A. Eisler, Arthur M. Lewis and Robert Okin allegedly were involved in the unregistered sale of more than 2.5 billion shares of penny stocks for a customer in 2009 and 2010.
The investigation alleges that Eisler should have conducted an inquiry into the customer’s trading activity, as it raised red flags that could point to illegal activity. According to the SEC, the proceeds from these transactions amounted to about $12 million, with Oppenheimer making more than $588,000 in commissions.
Lewis, Eisler’s supervisor and former branch manager, and Okin, Lewis’ supervisor, were both implicated in the transactions due to supervisory failings. Lewis allegedly approved many of the sales without inquiring into the account’s red flags. According to the SEC, Lewis requested an exemption to a stricter penny stock policy put into place by senior management in 2010, at which time the alleged illegal activity occurred.
The SEC report says that FINRA had issued a notice in January 2009 about the red flags its members should be aware of when dealing with customer sales, some of which concerned penny stocks and were exhibited by the customer in question.
Andrew J. Ceresney, director of the SEC’s Division of Enforcement, said those charged allowed illegal sales to go forth and that the supervisors failed to put a stop to it or answer to any of the red flags they should have seen.
Scott W. Friestad, associate director of the division, said this indicates that nobody is exempt from the law, even senior managers, and that the SEC will hold all responsible parties accountable.
In January, Oppenheimer admitted wrongdoing and paid $10 million to the SEC and $10 million to the Treasury Department’s Financial Crimes Enforcement Network.
Eisler and Lewis paid a fine of $50,000 each, and Okin agreed to a fine of $125,000. All three agreed to a one-year suspension from their prior duties in the securities industry, but none confirmed or denied any of the allegations against them.
If you are an investor who may have been wronged by Eisler, Lewis, Okin or another financial adviser, you may have rights and a possible avenue to loss recovery, and Silver Law Group can help. Schedule a no cost consultation with our experienced attorneys today. You won’t pay a cent unless we win your case.