Oppenheimer moves to cancel $36.7 million arbitration decision

Oppenheimer moves to cancel $36.7 million arbitration decision
While the firm filed a motion to vacate the award in Superior Court in DeKalb County, Georgia, it's extremely rare for courts to overturn Finra arbitration decisions.
OCT 31, 2022

Oppenheimer & Co. Inc. earlier this month filed a motion to vacate — or essentially undo — an arbitration award of $36.7 million that the firm lost last month.

The eight investors who won the award originally claimed $6 million in compensatory damages, according to the award, which was issued under the aegis of Finra Dispute Resolution Services, the industry arbitration arm of the Financial Industry Regulatory Authority Inc.

The investors' claim stems from money invested into a private equity fund, Horizon Private Equity III, run by a former Oppenheimer broker, John Woods, near Atlanta.

Last year, the Securities and Exchange Commission charged Woods with running a $110 million Ponzi scheme.

On Sept. 6, the Finra arbitration panel found in favor of the claimants and awarded them total compensatory damages of approximately $5.7 million, RICO damages of approximately $14.2 million, and punitive damages, attorneys’ fees and costs of approximately $16.8 million.

According to its third-quarter earnings report Friday, Oppenheimer filed a motion Oct. 6 to vacate the award with the Superior Court of DeKalb County, Georgia. The firm's motion to vacate was based on, among other defects, arbitrator bias, failure to postpone the hearing to permit key witnesses to testify, and manifest disregard of the law, according to the company.

A spokesperson for Oppenheimer did not comment Monday afternoon.

"No arbitrator on the panel knew any of the claimants," said John Chapman, the attorney for the investors who won the $36.7 million decision. "There were no business, social or personal relationships of any kind."

It's extremely rare for a court to overturn Finra arbitration decisions.

According to Oppenheimer's earnings report, the firm has 28 pending arbitration claims related to investors in the Horizon fund.

Latest News

'Bogged down' advisors just want to have fun (again)
'Bogged down' advisors just want to have fun (again)

Jim Cahn, of Wealth Enhancement Group, lifts the lid on his firm's partnership model, his views on RIA M&A, and the widely slept-on reason why advisors are merging into larger organizations.

Vestwell unveils new emergency savings account offering
Vestwell unveils new emergency savings account offering

The fintech firm is cementing its status in the workplace savings space with its latest ESA offering, which employers can integrate into their existing benefits package.

'Money Mimosas' and other ways to show your Valentine financial love
'Money Mimosas' and other ways to show your Valentine financial love

Wealth managers offer unique ideas for couples to grow closer emotionally and financially.

Limra research finds financial confidence on the rise among Black American workers
Limra research finds financial confidence on the rise among Black American workers

Survey findings suggest increased sense of financial security and more optimistic 2025 outlook, while highlighting employers' role in ensuring retirement readiness.

DOGE efforts sideswipe muni bonds backed by federal lease payments
DOGE efforts sideswipe muni bonds backed by federal lease payments

Falling prices for some securities within the $4 trillion state and local government debt market spotlight how the push to shrink spending is sending shockwaves across the US.

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.