NASD Charges Oppenheimer With Thwarting Investigation

By WS&T Staff
May 06, 2005

NASD charged New York-based Oppenheimer & Co., with failing to cooperate in an NASD investigation; failing to retain business-related e-mail, as required by federal securities law and NASD rules; and violating Municipal Securities Rulemaking Board (MSRB) rules by failing to report some bona fide municipal bond transactions, reporting others that were never effected, and reporting thousands of other trades late and inaccurately. "Oppenheimer's failure to fully and accurately report municipal bond transactions deprived the investing public and market participants of critical information," said NASD vice chairman Mary Schapiro, in the press release.

NASD charged Oppenheimer with multiple violations of its obligation to report municipal securities transactions to the MSRB timely and accurately. NASD found that between January 2003 and May 2004, Oppenheimer failed to report more than 6,100 municipal bond transactions with other dealers to the MSRB on a timely basis - and, in many cases, the reports were inaccurate when they finally were made. Oppenheimer also inaccurately reported the price, time and other required details of hundreds of municipal bond transactions with retail customers in May and June 2003.

Oppenheimer also is charged with reporting more than 1,300 retail municipal bond transactions that were never effected and failing to report over 700 completed transactions with retail customers. Additionally, NASD charged that from July 1, 2002, through at least the first quarter of 2004, Oppenheimer failed to retain and preserve electronic communications among its employees, instead allowing its employees to delete e-mails. Firms are obligated under federal securities laws and NASD Rules to retain electronic communications for at least three years. Oppenheimer also was charged with supervisory failures -- regarding its e-mail retention system and procedures, and regarding its municipal bond trade reporting system.