The Financial Industry Regulatory Authority has fined Oppenheimer & Co. Inc. $1 million for submitting mutual fund breakpoint data to FINRA that the firm knew to be inaccurate, as well as for related supervisory deficiencies.

Along with the fine, FINRA also ordered the firm to engage an independent consultant to evaluate its policies, systems and procedures for responding to information requests from regulators. Oppenheimer settled the matter without admitting or denying the charges, but consented to the entry of FINRA’s findings and dismissal of charges against Oppenheimer CEO Albert Lowenthal.

“The self-regulatory model depends on accurate, timely, and complete responses by firms to informational requests from FINRA,” said Susan Merrill, FINRA executive vice president and chief of enforcement. “This settlement sends a clear message to broker/dealers that they must have sound programs that insure conscientious responses to regulatory requests as well as reasonable safeguards when responsibility is delegated.”

FINRA’s initial request to Oppenheimer for a breakpoint assessment was made in March 2003 as part of a review of approximately 2,000 broker-dealers that sold front-end load mutual funds in 2001 and 2002. That request followed findings by NASD and other regulators that showed that nearly one in three mutual fund transactions in front-end load mutual funds that appeared eligible for a breakpoint discount did not receive one.

The regulator found that on two occasions, Oppenheimer submitted inaccurate and incomplete data in response to NASD’s request to perform a self-assessment of its mutual fund breakpoint discount practices. The firm knowingly, or at a minimum recklessly, submitted flawed data to NASD, failed to notify NASD that the data was flawed, failed to follow up to correct the firm’s data and failed to timely submit accurate data to NASD, it said.

In addition to a fine, censure and independent consultant’s review, Oppenheimer is obligated to conduct internal audits of its processes for intake, assignment and responses to regulatory inquiries. Oppenheimer is required to report its findings to FINRA quarterly for a period of six quarters.