BOSTON, MA – Congressman Stephen F. Lynch, a prominent Democrat on the House Financial Services Committee, expressed his concern with the U.S. Securities and Exchange Commission’s decision to issue Oppenheimer & Co., Inc. a full waiver from their five year automatic disqualification. Oppenheimer’s disqualification resulted from repeated violations: including unregistered sales of billions of shares of penny stocks, violations of anti-money laundering laws, and for allowing an unregistered broker to execute trades for its clients. Lynch has been a strong critic of the dangerous precedent of waiving bad actor provisions for firms who have knowingly and repeatedly engaged in violations.
“Accountability and transparency are vital to safeguarding the general public from the danger of criminal behavior from our financial institutions. Bad actor disqualification provisions are an important means to detract firms from engaging in unlawful conduct. By reflexively granting a full waiver of sanctions, we are not holding firms accountable for flagrant violations of critical financial regulations and anti-money laundering laws,” said Congressman Lynch. “I thank Commissioner Luis A. Aguilar and Commissioner Kara M. Stein for their powerful dissent and concur that the Commission must take more care to ensure that firms meet the waiver criteria prior to issuing waivers.”
Commissioners Aguilar and Stein issued a dissenting statement last week over the majority of the Commission’s decision to grant a full waiver. The full text of the dissenting statement can be found online here.