FINRA Sanctions Oppenheimer Stockbroker For Unsuitable Recommendations

Frederick Scott Levine of Florham Park New Jersey a stockbroker formerly registered with Oppenheimer Co. Inc. has been suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon findings that Levine made unsuitable rollovers of unit investment trusts in Oppenheimer customer accounts. Letter of Acceptance Waiver and Consent No. 2018057247201 (Aug. 3, 2020).

According to the AWC, on 950 occasions, customers were advised by Levine to roll over their unit investment trust positions prior to the maturities on those products. The AWC stated that unit investment trusts sold by Levine contained approximately twenty-four month maturities, but the stockbroker recommended for customers to liquidate positions after only holding them for 260 days on average.

In 600 of those occasions, the customers were told to use proceeds from a unit investment trust liquidation for the purchase of another unit investment trust in a subsequent series. In those cases, the new unit investment trust contained the same or similar investment objective as the unit investment trust that the customer had liquidated.

The AWC stated that customers had to pay unreasonable sales charges by following Levine’s advice. The regulator indicated that the stockbroker’s unit investment trust recommendations were not suitable given the costs and frequency of transactions. FINRA determined that Levine’s conduct was violative of FINRA Rules 2010 and 2111 as well as NASD Rule 2310.