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Cesar Hurtado: 6-Figure Complaints Against Oppenheimer Rep

Miami stockbroker Cedar Hurtado (CRD# 4137948) was recently sanctioned by the Financial Industry Regulatory Authority. A representative of Oppenheimer & Company, he was found to have recommended unsuitable investment strategies to two customers. 

According to a Letter of Acceptance, Waiver and Consent (No. 2017055890901) issued on August 6, 2021, Cesar Hurtado recommended an unsuitable put spread strategy to two customers between 2013 and 2019. As the AWC Letter explains, a put spread involves the simultaneous purchase and sale of an equal number of put options. Put options give the investor who purchases them the right to sell their underlying stock at a certain price for a certain period of time; investors who purchase them, meanwhile, commit to buying the stock at the given price for a certain period of time. Put spread strategies are designed to reduce the risk associated with options investments. As FINRA explains, “put spreads can be constructed to profit from a bull, bear, or neutral market, and ultimately limit the investor’s risk of loss.”

FINRA’s findings state that Cesar Hurtado recommended the “complex” strategy to two customers who were inexperienced when it came to options, used their brokerage accounts for income generation, and conservative investment goals. FINRA states that while he was aware of the strategy’s risk-mitigation function and recommended it “in those terms,” in practice he “recommended that the customers forego this risk mitigation mechanism.” FINRA states more specifically that “after putting on the initial put spread, Hurtado recommended that the customers take assignment of, and hold, securities whose stock prices had already declined, on occasions where he remained bullish on these securities.”

The AWC Letter notes that in several instances, the customer held the security for a given duration, after which Hurtado recommended they sell it “at a loss larger than the original put spread’s maximum loss.” His recommendations ultimately caused his customers to sustain $1.6 million in net losses between 2013 and 2019, which FINRA states “could have been avoided or substantially limited through suitable investment recommendations.” As a result of these findings, FINRA issued him a fine of $5,000, suspended him from associating with any FINRA member in any capacity for 45 days, and ordered him to complete 10 hours of continuing education regarding options trading and suitability.

In addition to the above-described sanction, Cesar Hurtado’s BrokerCheck report also shows two customer complaints. A 2019 complaint alleged that as a representative of Oppenheimer & Company, he was negligent, breached his fiduciary duty, breached contract, committed fraud, and made negligent misrepresentations. The complaint ultimately settled in 2020 for $275,000. The second complaint, filed in 2017, alleged that as an Oppenheimer & Company representative he engaged in fraud, negligence, and breach of fiduciary duty. The complaint reached a 2018 settlement of $285,000.

According to the Financial Industry Regulatory Authority, Cesar Hurtado holds 21 years of securities industry experience. He is presently a stockbroker and investment adviser with Oppenheimer & Company in Miami, Florida, where he has been employed since 2003. His prior registration was with CIBC World Markets in New York City from 2000-2003. His credentials include the passage of five securities industry qualifying examinations: the Uniform Investment Adviser Law Examination, or Series 65; the Uniform Securities Agent State Law Examination, or Series 63; the Securities Industry Essentials Examination, or SIE; the General Securities Representative Examination, or Series 7; and the National Commodity Futures Examination, or Series 3. He presently holds ten state licenses. (Information accessed on January 2, 2021.)

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