Editor’s note: This story has been corrected to remove a reference to Georgia law regarding punitive damages. The part of the statute originally cited applies to product liability cases. It does not apply to the Finra arbitration award.
A $36.7 million Finra arbitration award against Oppenheimer & Co. Inc. was vacated earlier this year, but it appears the investors harmed by an alleged Ponzi scheme perpetrated by one of the firm’s former brokers still received a substantial amount of damages.
The claimants in the case, several investors including Donald Robinson, and Oppenheimer agreed to vacate the award, according to a March 27 order signed by Judge Yolanda Park-Smith of the DeKalb County Superior Court in Georgia.
The parties reached the agreement after a Jan. 30 hearing in the court on Oppenheimer’s motion to vacate the award. The court ruled to uphold the arbitration decision, but then the parties reached their accord to vacate it “prior to the Court’s entry of its written judgment,” Park-Smith wrote in the order.
The order to vacate the arbitration award was first reported by the Securities Arbitration Alert in its May 31 edition.
The fact that the arbitration decision was struck down doesn’t mean that the claimants are missing out on a massive arbitration award payment. In its annual report for 2022 filed with the Securities and Exchange Commission, Oppenheimer noted that it has paid tens of millions of dollars to end arbitration cases.
“Oppenheimer has settled, or settled in principle, eleven of the Horizon related arbitrations, including the Robinson arbitration, with approximately forty-one individual complainants,” the Oppenheimer annual report states. “The aggregate settlement payments for those eleven arbitrations total approximately $48.6 million.”
The Horizon reference relates to the Horizon Private Equity III fund, an alleged Ponzi scheme that John J. Woods launched in 2008 when he worked out of an Oppenheimer branch office in Atlanta.
Financial Industry Regulatory Authority Inc. arbitrators originally ruled in favor of the claimants and awarded them the $36.7 million in a decision last September.
A spokesperson for Oppenheimer declined to comment. A lawyer for the claimants also declined to comment.
Both sides may be maintaining their silence because they each got what they wanted. Oppenheimer eliminated an arbitration loss. The harmed investors likely received a substantial payment as part of its agreement to vacate the award.
“If there was a settlement, it might have been rich enough to satisfy the claimant,” said Rick Ryder, president of SAC Inc., the owner and operator of Arbcheck.com, an online arbitrator search platform. “It’s not something you see every day.”
Oppenheimer recently lost another Finra arbitration case tied to the Horizon investment scheme. More cases are in the pipeline, according to securities lawyers.
The new regional leader brings nearly 25 years of experience as the firm seeks to tap a complex and evolving market.
The latest updates to its recordkeeping platform, including a solution originally developed for one large 20,000-advisor client, take aim at the small to medium-sized business space.
David Lau, founder and CEO of DPL Financial Partners, explains how the RIA boom and product innovation has fueled a slow-burn growth story in annuities.
Crypto investor argues the federal agency's probe, upheld by a federal appeals court, would "strip millions of Americans of meaningful privacy protections."
Meanwhile in Chicago, the wirehouse also lost another $454 million team as a group of defectors moved to Wells Fargo.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
