WASHINGTON (CN) – Oppenheimer & Co. will pay $20 million to settle criminal and civil complaints of improperly selling penny stocks in unregistered offerings on behalf of a customer.
The SEC on Tuesday announced its $10 million settlement, and a second settlement with the Treasury Department’s Financial Crimes Enforcement Network.
In its settled complaint, the SEC said Oppenheimer executed sales of billions of shares of penny stocks for its customer Gibraltar Global Securities, a Bahamian brokerage firm, knowing or recklessly not knowing that Gibraltar was executing trades for underlying customers. The SEC charged Gibraltar with this in April 2013.
Also in the Tuesday settlement, the SEC said that Oppenheimer failed to file Suspicious Activity Reports on Gibraltar, failed to properly report, withhold and remit more than $3 million in withholding taxes from Gibraltar’s account.
The penny stock sales generated $12 million in profits from which Oppenheimer got $588,400 in commissions, according to the SEC.
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