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FINRA Sanctions Oppenheimer for Misclassified Client Statements Involving CMOs

Posted on June 8th, 2026 at 1:34 PM
FINRA Sanctions Oppenheimer for Misclassified Client Statements Involving CMOs

From the desk of Jim Eccleston at Eccleston Law

The Financial Industry Regulatory Authority (FINRA) has fined and censured Oppenheimer & Co. after finding that the firm issued inaccurate statements to customers over an extended period, according to reporting by AdvisorHub.

FINRA determined that, beginning in January 2006, Oppenheimer distributed approximately 167,000 account statements to more than 800 customers that misidentified private-label collateralized mortgage obligations (CMOs) as government or corporate bonds. As reported by AdvisorHub, the regulator concluded that those inaccuracies rendered the statements misleading.

According to AdvisorHub, FINRA initiated the investigation during a routine examination cycle. After identifying the issue, Oppenheimer attempted to correct the classification of the securities. The firm initially reclassified the instruments from government agency bonds to corporate bonds. FINRA found that this change remained inaccurate because private-label CMOs differ materially from corporate bonds.

According to FINRA, the firm's conduct violated multiple rules, including requirements to provide accurate account statements, maintain reasonable supervision, and adhere to standards requiring members to conduct business honorably. Oppenheimer resolved the matter through a FINRA Acceptance, Waiver and Consent (AWC) letter, agreeing to a $250,000 fine and censure without admitting or denying its findings.

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, finra sanctions, oppenheimer & co., collateralized mortgage obligations, broker-dealer compliance, securities regulation

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