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What changed in OPPENHEIMER HOLDINGS INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of OPPENHEIMER HOLDINGS INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+372 added−437 removedSource: 10-K (2025-02-27) vs 10-K (2024-03-01)

Top changes in OPPENHEIMER HOLDINGS INC's 2024 10-K

372 paragraphs added · 437 removed · 292 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

112 edited+14 added−41 removed96 unchanged
Biggest changeWe conduct ongoing and robust succession planning for senior roles within our Company, and we strive to ensure we have a diverse pool of candidates for such roles. We regularly discuss the results with executive leadership and the Board of Directors. An important driver of our success is the continuous recruitment and retention of financial advisors.
Biggest changeThe firm also provides leadership development programs that prepare our current and future leaders for challenges they will face in new roles or with expanded responsibilities. We conduct ongoing and robust succession planning for senior roles within our Company, and we strive to ensure we have a diverse pool of candidates for such roles.
The GDPR expands the scope of the EU data protection law to all foreign companies processing personal data of EU residents, imposes a strict data protection compliance regime, and includes new rights. Other jurisdictions have passed, or are proposing to pass privacy legislation that is similar to GDPR.
The GDPR expands the scope of the EU data protection law to all foreign companies processing personal data of EU residents, imposes a strict data protection compliance regime, and includes new rights. Other jurisdictions have passed, or are proposing to pass, privacy legislation that is similar to the GDPR.
The Company's headquarters and the primary and secondary locations for its technology infrastructure are both supported by emergency electric generator back-up. All of these service providers have assured the Company that they have made plans for providing continued service in the case of an unexpected event that might disrupt their services.
The Company's headquarters and the primary and secondary locations for its technology infrastructure are all supported by emergency electric generator back-up. All of these service providers have assured the Company that they have made plans for providing continued service in the case of an unexpected event that might disrupt their services.
Oppenheimer engages in a broad range of activities in the securities industry, including retail securities brokerage, institutional sales and trading, investment banking and underwritings (both corporate and public finance), research, market-making, and investment advisory and asset management services. Oppenheimer provides its services from offices located in the United States. Oppenheimer Asset Management Inc.
Oppenheimer engages in a broad range of activities in the securities industry, including retail securities brokerage, institutional sales and trading, investment banking and underwritings (both corporate and public finance), research, market-making, and investment advisory and asset management services. Oppenheimer largely provides its services from offices located in the United States. Oppenheimer Asset Management Inc.
("Oppenheimer"), a New York-based securities broker-dealer and investment adviser, Oppenheimer Asset Management Inc. and its subsidiary advisors ("OAM"), a New York-based investment adviser, Freedom Investments, Inc. ("Freedom"), a discount securities broker-dealer based in New Jersey, Oppenheimer Trust Company ("Oppenheimer Trust"), a Delaware limited purpose bank, and OPY Credit Corp.
("Oppenheimer"), a New York-based securities broker-dealer and investment adviser, Oppenheimer Asset Management Inc. and its subsidiary advisors ("OAM"), a New York-based investment adviser, Freedom Investments, Inc. ("Freedom"), a discount securities broker-dealer based in New Jersey, Oppenheimer Trust Company of Delaware Inc. ("Oppenheimer Trust"), a Delaware limited purpose bank, and OPY Credit Corp.
The Patriot Act also contains financial transparency laws and enhanced information collection tools and enforcement mechanisms for the U.S. government, including: due diligence and record-keeping requirements for private banking and correspondent accounts; standards for obtaining and verifying customer identification at account opening; and rules to produce certain records upon request of a regulator or law enforcement and to 12 Table of Contents promote cooperation among financial institutions, regulators, and law enforcement in identifying parties that may be involved in terrorism, money laundering and other crimes.
The Patriot Act also contains financial transparency laws and enhanced information collection tools and enforcement mechanisms for the U.S. government, including: due diligence and record-keeping requirements for private banking and correspondent accounts; standards for obtaining and verifying customer identification at account opening; and rules to produce certain records upon request of a regulator or law enforcement and to promote cooperation among financial institutions, regulators, and law enforcement in identifying parties that may be involved in terrorism, money laundering and other crimes.
The issue presents unique challenge due to the lack of easily adoptable technology solutions that would facilitate the prevention or detection of noncompliance with the Company's' strengthened policies on off-channel communications. Margin lending by Oppenheimer is subject to the margin rules of the Board of Governors of the Federal Reserve System and FINRA.
The issue presents unique challenges due to the lack of easily adoptable technology solutions that would facilitate the prevention or detection of noncompliance with the Company's' strengthened policies on off-channel communications. Margin lending by Oppenheimer is subject to the margin rules of the Board of Governors of the Federal Reserve System and FINRA.
Oppenheimer Investments Asia Limited is required to maintain Required Liquid Capital of the greater of HKD 3.0 million or 5% of Adjusted Liabilities as defined by the Hong Kong Securities and Futures Financial Resources Rules. As of December 31, 2023, Oppenheimer Investments Asia Limited was in compliance with its regulatory requirements.
Oppenheimer Investments Asia Limited is required to maintain Required Liquid Capital of the greater of HKD 3.0 million or 5% of Adjusted Liabilities as defined by the Hong Kong Securities and Futures Financial Resources Rules. As of December 31, 2024, Oppenheimer Investments Asia Limited was in compliance with its regulatory requirements.
The Company prides itself on having a culture of putting people first and values the thoughts, perspectives and experiences of individuals from all backgrounds. We strive to have an inclusive and bias-free workplace that will foster growth of our employees and allow them to excel in their careers.
The Company prides itself on having a culture of putting people first and values the thoughts, perspectives and experiences of individuals from all backgrounds. We strive to have a bias-free workplace that will foster growth of our employees and allow them to excel in their careers.
The SEC and/or SROs may in certain circumstances restrict the Company's brokerage subsidiaries' ability to withdraw excess net capital and transfer it to the Company or to other Operating Subsidiaries or to expand the Company's business. As of December 31, 2023, Oppenheimer and Freedom were in compliance with their regulatory requirements.
The SEC and/or SROs may in certain circumstances restrict the Company's brokerage subsidiaries' ability to withdraw excess net capital and transfer it to the Company or to other Operating Subsidiaries or to expand the Company's business. As of December 31, 2024, Oppenheimer and Freedom were in compliance with their regulatory requirements.
In addition, new rules have been adopted to regulate and/or prohibit proprietary trading for certain deposit taking institutions, control the amount and timing of compensation to "highly paid" employees, require the adoption of policies to "clawback" erroneously awarded compensation to executive officers, mandate disclosure of information reflecting the relationship between executive compensation paid and the entity's financial performance, create new regulations around financial transactions with retirement plans and increase the disclosures provided to clients.
Several new rules have been adopted to regulate and/or prohibit proprietary trading for certain deposit taking institutions, control the amount and timing of compensation to "highly paid" employees, require the adoption of policies to "clawback" erroneously awarded compensation to executive officers, mandate disclosure of information reflecting the relationship between executive compensation paid and the entity's financial performance, create new regulations around financial transactions with retirement plans and increase the disclosures provided to clients.
Oppenheimer Trust is a limited purpose trust company licensed by the Delaware State Bank Commissioner to provide fiduciary and related services. Oppenheimer Trust is required to maintain capital of $4.15 million. As of December 31, 2023, Oppenheimer Trust was in compliance with its capital requirements.
Oppenheimer Trust is a limited purpose trust company licensed by the Delaware State Bank Commissioner to provide fiduciary and related services. Oppenheimer Trust is required to maintain capital of $4.15 million. As of December 31, 2024, Oppenheimer Trust was in compliance with its capital requirements.
The stocks in which Oppenheimer makes a market may also include those of issuers which are followed by Oppenheimer's research department. Equity Research — Oppenheimer provides regular research reports, notes and earnings updates and also sponsors research conferences where the management of covered companies can meet with investors in a group format as well as in one-on-one meetings.
The stocks in which Oppenheimer makes a market may also include those of issuers which are followed by Oppenheimer's research department. 4 Table of Contents Equity Research — Oppenheimer provides regular research reports, notes and earnings updates and also sponsors research conferences where the management of covered companies can meet with investors in a group format as well as in one-on-one meetings.
The Company makes available free of charge through its website its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy and information statements and other SEC filings and all amendments to those reports within 24 hours of such material being electronically filed with or furnished to the SEC. 17 Table of Contents
The Company makes available free of charge through its website its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, 15 Table of Contents proxy and information statements and other SEC filings and all amendments to those reports within 24 hours of such material being electronically filed with or furnished to the SEC. 16 Table of Contents
Institutional Fixed Income Sales and Trading - Oppenheimer trades and holds positions in public and private debt (including sovereign debt) securities, including investment and non-investment grade, distressed and convertible corporate securities as well as municipal securities.
Institutional Fixed Income Sales and Trading - Oppenheimer trades and holds positions in public and private debt (including sovereign debt) securities, including investment and non-investment grade, distressed and convertible corporate securities as well as municipal securities and trade claims.
("OPY Credit"), a New York corporation which conducts secondary trading activities related to the purchase and sale of loans, primarily on a riskless principal basis. We conduct our international businesses through Oppenheimer Europe Ltd. (United Kingdom with offices in the Isle of Jersey, Portugal, Germany and Switzerland), Oppenheimer Investments Asia Limited (Hong Kong), and Oppenheimer Israel (OPCO) Ltd. (Israel).
("OPY Credit"), a New York corporation which conducts secondary trading activities related to the purchase and sale of loans and trade claims, primarily on a riskless principal basis. We conduct our international businesses through Oppenheimer Europe Ltd. (United Kingdom with offices in the Isle of Jersey and Switzerland), Oppenheimer Investments Asia Limited (Hong Kong), and Oppenheimer Israel (OPCO) Ltd. (Israel).
These programs are designed to provide competitive 9 Table of Contents compensation and financial incentives for employees in meeting various performance targets which drive the overall financial performance of the Company while taking into account the Company's overall financial performance, individual performance, as well as the Company's corporate and risk management objectives.
These programs are designed to provide competitive compensation and financial incentives for employees in meeting various performance targets which drive the overall financial performance of the Company while taking into account the Company's overall financial performance, individual performance, as well as the Company's corporate and risk management objectives.
U.S. state law and regulations adopted under U.S. federal law impose obligations on the Company and its subsidiaries for protecting the security, confidentiality and integrity of client 14 Table of Contents information, and require notice of data breaches to certain U.S. regulators, and, in some cases, to clients.
U.S. state law and regulations adopted under U.S. federal law impose obligations on the Company and its subsidiaries for protecting the security, confidentiality and integrity of client information, and require notice of data breaches to certain U.S. regulators, and, in some cases, to clients.
(Freedom computes net capital under the basic formula as provided by the Net Capital Rule.) Under the alternative method, Oppenheimer is required to maintain a minimum "net capital", as defined in the Net Capital Rule, at least equal to 2% of the amount of its "aggregate debit items" computed in accordance with the Formula for Determination of Reserve Requirements for Brokers and Dealers (Exhibit A to Rule 15c3-3 under the Exchange Act) or $1.5 million, whichever is greater.
(Freedom computes net capital under the basic formula as provided by the Net Capital Rule.) Under the alternative method, Oppenheimer is required to maintain a minimum "net capital", as defined in the Net Capital Rule, at least equal to 2% of the amount of its "aggregate debit items" computed in accordance with the Formula for Determination of Reserve Requirements for Brokers and Dealers or $1.5 million, whichever is greater.
Oppenheimer provides fundamental equity research, execution services and access to all major U.S. equity exchanges and alternative execution venues, in addition to capital markets/origination, various arbitrage strategies, portfolio and electronic trading. Oppenheimer offers a suite of quantitative and algorithmic trading solutions to access liquidity in global markets.
Oppenheimer provides fundamental equity research, execution services and access to all major U.S. equity exchanges, the Over the Counter Market, and alternative execution venues, in addition to capital markets/origination, various arbitrage strategies, portfolio and electronic trading. Oppenheimer offers a suite of quantitative and algorithmic trading solutions to access liquidity in global markets.
Oppenheimer Europe Ltd., which is based in the United Kingdom, with offices in the Isle of Jersey, Portugal, Germany and Switzerland, provides institutional equities and fixed income brokerage and corporate finance as well as fund placement activities and is regulated by the Financial Conduct Authority in the United Kingdom, and the Jersey Financial Services Commission in the Isle of Jersey.
Oppenheimer Europe Ltd., which is based in the United Kingdom, with offices in the Isle of Jersey and Switzerland, provides institutional equities and fixed income brokerage and corporate finance as well as investment banking and fund placement activities and is regulated by the Financial Conduct Authority in the United Kingdom, and the Jersey Financial Services Commission in the Isle of Jersey.
The business includes discretionary and non-discretionary fee-based programs sponsored by Oppenheimer, OAM, Oppenheimer Investment Advisers ("OIA"), a division of OAM and Oppenheimer Investment Management LLC ("OIM"), as well as alternative investments sponsored through Advantage Advisers Multi Manager LLC, Advantage Advisers Management, LLC and Oppenheimer Alternative Investment Management LLC.
The business includes discretionary and non-discretionary fee-based programs sponsored by Oppenheimer, OAM, Oppenheimer Investment Advisers ("OIA"), and Oppenheimer Investment Management LLC ("OIM"), as well as alternative investments sponsored through Advantage Advisers Multi Manager LLC, Advantage Advisers Management, LLC and Oppenheimer Alternative Investment Management LLC.
Bank Secrecy Act and USA PATRIOT Act of 2001— The Bank Secrecy Act and the USA PATRIOT Act of 2001 (“Patriot Act”) and requirements administered by the Financial Crimes Enforcement Network (“FinCEN”) require financial institutions, among other things, to implement a risk-based program reasonably designed to prevent money laundering and to combat the financing of terrorism, including through suspicious activity and currency transaction reporting, compliance, record-keeping and initial and on-going due diligence on customers.
Bank Secrecy Act and USA PATRIOT Act of 2001— The Bank Secrecy Act (as amended), the USA PATRIOT Act of 2001 (as amended since inception, the “Patriot Act”), the Anti-Money Laundering Act of 2020 and requirements administered by the Financial Crimes Enforcement Network (“FinCEN”) require financial institutions, among other things, to implement a risk-based program reasonably designed to prevent money laundering and to combat the financing of terrorism, including through suspicious activity and currency transaction reporting, compliance, record-keeping and initial and on-going due diligence on customers.
OAM offers proprietary and third party investment management capabilities through separately managed accounts, alternative investments and discretionary and non-discretionary portfolio management programs as well as managed portfolios of mutual funds.
OAM offers proprietary and third party investment management capabilities through separately managed accounts, alternative investments and discretionary and non-discretionary 2 Table of Contents portfolio management programs as well as managed portfolios of mutual funds.
The size of Oppenheimer's securities positions varies substantially based upon economic and market conditions, allocations of capital, underwriting commitments and trading volume. Also, the aggregate value of inventories of securities which Oppenheimer may carry is limited by the Net Capital Rule.
The size of Oppenheimer's securities positions and other financial instrument holdings varies substantially based upon economic and market conditions, allocations of capital, underwriting commitments and trading volume. Also, the aggregate value of inventories of securities which Oppenheimer may carry is limited by the Net Capital Rule.
Revenues for OAM are generated by i nvestment advisory and transactional fees for advisory services and revenue from sharing arrangements with registered and private alternative investment vehicles. OAM earns investment advisory fees on all assets held in discretionary and non-discretionary asset-based programs.
Revenues for OAM are generated by investment advi sory and transactional fees for advisory services and revenue from sharing arrangements with registered and private alternative investment vehicles. OAM earns investment advisory fees on all assets held in discretionary and non-discretionary asset-based programs.
Oppenheimer Trust offers a wide variety of trust services to clients of Oppenheimer. This includes custody services, advisory services and specialized servicing options for clients. At December 31, 2023, Oppenheimer Trust held custodial assets of $466.0 million. Oppenheimer Trust is regulated by the Delaware State Bank Commissioner. Freedom Investments, Inc.
Oppenheimer Trust Company of Delaware Inc. Oppenheimer Trust offers a wide variety of trust services to clients of Oppenheimer. This includes custody services, advisory services and specialized servicing options for clients. At December 31, 2024, Oppenheimer Trust held custodial assets of $541.0 million. Oppenheimer Trust is regulated by the Delaware State Bank Commissioner. Freedom Investments, Inc.
The new rulemaking has fundamentally altered the provision of research to financial institutions and also requires the registration of all market participants. This rulemaking has negatively impacted the overall availability of commission revenue in payment for equity research and negatively impacted the liquidity of markets for equities and fixed income securities in Europe.
The new rulemaking has fundamentally altered the provision of research to financial institutions and also requires the registration of all market participants. This rulemaking has negatively impacted the overall availability of commission revenue in payment for equity research and negatively impacted the liquidity of markets for equities and fixed income securities in Europe. Fiduciary Standard — Rulemaking by the U.S.
REGULATORY CAPITAL REQUIREMENTS 15 Table of Contents As registered broker-dealers and member firms regulated by FINRA, Oppenheimer and Freedom are subject to certain net capital requirements pursuant to Rule 15c3-1 (the "Net Capital Rule") promulgated under the Exchange Act.
REGULATORY CAPITAL REQUIREMENTS As registered broker-dealers and member firms regulated by FINRA, Oppenheimer and Freedom are subject to certain net capital requirements pursuant to Rule 15c3-1 (the "Net Capital Rule") promulgated under the Exchange Act.
PRIVATE CLIENT Through its Private Client Division, Oppenheimer provides a comprehensive array of financial services through a network of 931 financial advisors in 90 offices located throughout the United States. Clients include high-net-worth individuals and families, corporate executives, and public and private businesses.
WEALTH MANAGEMENT Through its Wealth Management division, Oppenheimer provides a comprehensive array of financial services through a network of 931 financial advisors in 88 offices located throughout the United States. Clients include high-net-worth individuals and families, corporate executives, and public and private businesses.
Platform support functions include sales and marketing along with administrative services such as trade execution, client services, records management and client reporting and performance monitoring as well as custody through Oppenheimer. At December 31, 2023, the Company had $43.9 billion of client assets under management ("AUM") in fee-based programs.
Platform support functions include sales and marketing along with administrative services such as trade execution, client services, records management and client reporting and performance monitoring as well as custody through Oppenheimer. At December 31, 2024, the Company had $49.4 billion of client assets under management ("AUM") in fee-based programs.
The Company’s Chief Executive Officer will provide recommendations to the Compensation Committee with respect to salary, bonus, and other compensation paid to senior management. In turn, senior management will make recommendations to the Chief Executive Officer regarding remuneration for their direct reports in various business and support functions.
The Company’s Chief Executive Officer will provide recommendations to the Compensation Committee with respect to salary, bonus, and other compensation paid to senior management and other employees. In turn, senior management will 9 Table of Contents make recommendations to the Chief Executive Officer regarding remuneration for their direct reports in various business and support functions.
Clients may choose a variety of ways to establish a relationship and conduct business including brokerage accounts with transaction-based pricing and/or investment advisory accounts with asset-based fee pricing. As of December 31, 2023, the Company held client assets under administration of $118.2 billion.
Clients may choose a variety of ways to establish a relationship and conduct business including brokerage accounts with transaction-based pricing and/or investment advisory accounts with asset-based fee pricing. As of December 31, 2024, the Company held client assets under administration of $129.5 billion.
Treasury Department as well as those of government agencies such as the Federal National Mortgage Association, Government National Mortgage Association and Federal Home Loan Banks.
Treasury Department as well as those of government agencies such as the Federal National Mortgage Association, Government National Mortgage Association and Federal Home Loan Banks and Farm Credit Agency.
OAM is registered as an investment adviser with the SEC under the Adviser Act. OAM provides investment advice to clients through separate accounts and wrap fee programs. OPY Credit Corp. OPY Credit Corp. primarily engages in secondary trading activities related to the purchase and sale of loans, primarily on a riskless principal basis. Oppenheimer Trust Company of Delaware Inc.
OAM is registered as an investment adviser with the SEC under the Adviser Act. OAM provides investment advice to clients through separate accounts and wrap fee programs. OPY Credit Corp. OPY Credit Corp. primarily engages in secondary trading activities related to the purchase and sale of loans and trade claims, primarily on a riskless principal basis.
Oppenheimer buys, sells and maintains inventory to make markets. In executing customer orders for securities in which it does not make a market, Oppenheimer generally charges a commission and acts as agent, or will act as principal by marking the security up or down in a riskless transaction.
In executing customer orders for securities in which it does not make a market, Oppenheimer generally charges a commission and acts as agent, or will act as principal by marking the security up or down in a riskless transaction.
The amendments make structural and operational reforms to address risks of excessive withdrawals over relatively short time frames by investors from money market funds, while preserving the benefits of the funds. Oppenheimer does not sponsor any money market funds.
Money Market Funds — The SEC adopted amendments to the rules that govern money market mutual funds. The amendments make structural and operational reforms to address risks of excessive withdrawals over relatively short time frames by investors from money market funds, while preserving the benefits of the funds. Oppenheimer does not sponsor any money market funds.
In addition, U.S. broker-dealers will be required to submit customer account information to the repository. This will make the CAT the world's largest repository of securities transactions and client information. In June 2020, Oppenheimer, like other U.S. broker dealers, began reporting equity trades, and in July, 2020 non-complex option trades to the CAT.
In addition, U.S. broker-dealers are required to submit customer account information to the repository. This has made the CAT the world's largest repository of securities transactions and client information. In June 2020, Oppenheimer, like other U.S. broker dealers, began reporting equity trades, and in July, 2020 non-complex option trades to the CAT. Oppenheimer began reporting complex option trades in 2021.
BondWave is a cloud-based financial market software-as-a-service provider which offers institutions and broker-dealers active in fixed income markets with an integrated suite of portfolio analytics, transaction analytics and proprietary data solutions.
BondWave LLC The Company acquired BondWave LLC (“BondWave”), in December of 2023. BondWave is a cloud-based financial market software-as-a-service provider which offers institutions and broker-dealers active in fixed income markets with an integrated suite of portfolio analytics, transaction analytics and proprietary data solutions.
Broker-dealer Regulation — The regulations to which broker-dealers are subject cover all aspects of the securities business, including sales methods, trade practices among broker-dealers, the use and safekeeping of customers' funds and securities, capital structure of securities firms, record keeping and the conduct of directors, officers and employees.
Oppenheimer Israel Ltd. operates subject to the authority of the Israel Securities Authority. 11 Table of Contents Broker-dealer Regulation — The regulations to which broker-dealers are subject cover all aspects of the securities business, including sales methods, trade practices among broker-dealers, the use and safekeeping of customers' funds and securities, capital structure of securities firms, record keeping and the conduct of directors, officers and employees.
Freedom, a registered broker-dealer with the SEC, offers discount services to a small number of individual investors throughout the United States. The Company is a wholly-owned subsidiary of Oppenheimer & Co. Inc and a member of the Financial Industry Regulatory Authority, Inc. ("FINRA").
Freedom, a registered broker-dealer with the SEC, offers discount services on a limited basis to a small number of individual investors throughout the United States. The Company is a wholly-owned subsidiary of Oppenheimer & Co. Inc. and a member of FINRA.
Item 1. BUSINESS OVERVIEW Oppenheimer Holdings Inc. ("OPY" or the "Parent"), through its Operating Subsidiaries (together, the "Company", "we", "our" or "us"), is a leading middle-market investment bank and full service broker-dealer.
Item 1. BUSINESS OVERVIEW Oppenheimer Holdings Inc. ("OPY" or the "Parent"), through its Operating Subsidiaries (together, the "Company", the "Firm", "we", "our" or "us"), is a leading middle-market investment bank and full service broker-dealer incorporated in the State of Delaware in the United States.
Reg BI does not define the term “best interest” but instead sets forth four distinct obligations, disclosure, care, conflict of interest and compliance, that a broker-dealer must satisfy in each transaction. The effective date for compliance with Reg BI was June 30, 2020.
Reg BI does not define the term “best interest” but instead sets forth four distinct obligations, disclosure, care, conflict of interest and compliance, that a broker-dealer must satisfy in each transaction.
The human capital needs of our business are also supported by the Company’s Human Resources Department, which reports into the Chief Financial Officer. At December 31, 2023, the Company employed 2,942 employees (2,903 full-time and 39 part-time), of whom 931 were financial advisors.
The human capital needs of our business are also supported by the Company’s Human Resources Department, which reports into the Chief Financial Officer. At December 31, 2024, the Company employed 3,018 employees (2,977 full-time and 41 part-time), of whom 931 were financial advisors.
Risk of loss upon default by the borrower is significantly greater with respect to unrated or non-investment grade securities than with investment grade securities. These securities are generally unsecured and are often subordinated to other creditors of the issuer.
Oppenheimer also publishes desk analysis with respect to a number of such securities. Risk of loss upon default by the borrower is significantly greater with respect to unrated or non-investment grade securities than with investment grade securities. These securities are generally unsecured and are often subordinated to other creditors of the issuer.
The Company clears its non-U.S. international equities business in securities traded on European exchanges carried on by Oppenheimer Europe Ltd. through Global Prime Partners Ltd. Oppenheimer has a multi-currency platform which enables it to facilitate client trades in securities denominated in foreign currencies. Effective December 31, 2023, Oppenheimer terminated its commodity business and will no longer facilitate client commodity transactions.
The Company clears its non-U.S. international equities business in securities traded on European exchanges carried on by Oppenheimer Europe Ltd. through Global Prime Partners Ltd. Oppenheimer has a multi-currency platform which enables it to facilitate client trades in securities denominated in foreign currencies.
The Company has access to a number of regional and national markets and is required to adhere to their applicable rules and regulations. Securities Regulation — The securities industry in the United States is subject to extensive regulation under both federal and state laws. The SEC is the federal agency charged with administration of the federal securities laws.
Freedom is also a member of FINRA. The Company has access to a number of regional and national markets and is required to adhere to their applicable rules and regulations. Securities Regulation — The securities industry in the United States is subject to extensive regulation under both federal and state laws.
ADMINISTRATION AND OPERATIONS 7 Table of Contents Administration and operations personnel are responsible for the processing of securities transactions; the receipt, identification and delivery of funds and securities; the maintenance of internal financial controls; accounting functions; custody of customers' securities; the handling of margin accounts for Oppenheimer and its correspondents; and general office services.
BondWave also offers municipal bond data analysis, news and information to financial institutions. 7 Table of Contents ADMINISTRATION AND OPERATIONS Administration and operations personnel are responsible for the processing of securities transactions; the receipt, identification and delivery of funds and securities; the maintenance of internal financial controls; accounting functions; custody of customers' securities; the handling of margin accounts for Oppenheimer and its correspondents; and general office services.
The Net Capital Rule, which specifies minimum net capital requirements for registered brokers and dealers, is designed to measure the general financial integrity and liquidity of a broker-dealer and requires that at least a minimum part of its assets be kept in liquid form.
The Net Capital Rule, which specifies minimum net capital requirements for registered brokers and dealers, is designed to measure the general financial integrity and liquidity of a broker-dealer and requires that at least a minimum part of its assets be kept in liquid form. 14 Table of Contents Oppenheimer elects to compute net capital under the alternative method of calculation permitted by the Net Capital Rule.
Oppenheimer's clients include domestic and international investors such as investment advisers, banks, mutual funds, insurance companies, hedge funds, and pension and profit sharing plans that are attracted by the research product, insights and market intelligence provided by our sales and trading staff as well as by the quality of our execution (measured by volume, timing, price and other factors), and competitive negotiated commission rates. 4 Table of Contents Institutional Equity Sales and Trading — Oppenheimer acts as both principal and agent in the execution of its customers' orders.
Oppenheimer's clients include domestic and international investors such as investment advisers, banks, mutual funds, insurance companies, hedge funds, and pension and profit sharing plans that are attracted by the research products, insights and market intelligence provided by our sales and trading staff as well as by the quality of our execution (measured by volume, timing, price and other factors), and competitive negotiated commission rates.
Oppenheimer Europe Ltd. is authorized by the FCA of the United Kingdom to provide investment services under the Investment Firms’ Prudential Regime (“IFPR”). Effective January 2022, IFPR changed its minimum capital requirement, which is now sterling 750,000 (previously it was Euro 730,000). Capital ratios are now expressed differently, but are effectively unchanged when comparing performance to required regulatory minimums.
Oppenheimer Europe Ltd. is authorized by the FCA of the United Kingdom to provide investment services under the Investment Firms’ Prudential Regime (“IFPR”). Effective January 2022, IFPR changed its minimum capital requirement, which is now Sterling 750,000 (previously it was Euro 730,000).
Similar to the proposal the DOL released in June of 2020, PTE takes a principles-based (rather than a prescriptive) approach to resolving conflicts that arise under ERISA when an investment advice fiduciary, its affiliate or a related party is paid certain types of compensation (such as commissions, trailing fees or revenue-sharing) or engages in certain principal transactions.
The PTE takes a principles-based (rather than a prescriptive) approach to resolving conflicts that arise under ERISA when an investment advice fiduciary, its affiliate or a related party is paid certain types of compensation (such as commissions, trailing fees or revenue-sharing) or engages in certain principal transactions. The effective date for compliance with the PTE was February 1, 2022.
Margin Lending — Oppenheimer extends credit to its customers, collateralized by securities and cash in the customer's account, for a portion of the purchase price, and receives income from interest on such extensions of credit at interest rates derived from Oppenheimer's base rate as adjusted, from time to time. 2 Table of Contents ASSET MANAGEMENT OAM is responsible for the Company's advisory programs and alternative investments businesses.
Margin Lending — Oppenheimer extends credit to its customers, collateralized by securities and cash in the customer's account, for a portion of the purchase price, and receives income from interest on such extensions of credit at interest rates derived from Oppenheimer's base rate as adjusted, from time to time.
Oppenheimer offers capabilities in trading and sales; transacting in investment grade and high yield corporate bonds; mortgage-backed securities; U.S. government and Agency bonds; distressed loans; and the sovereign and corporate debt of industrialized and Emerging Market countries, which may be denominated in currencies other than U.S. dollars. Oppenheimer also publishes desk analysis with respect to a number of such securities.
Oppenheimer offers capabilities in trading and sales; transacting in investment grade and high yield corporate bonds; mortgage-backed securities; U.S. government and Agency bonds; distressed loans; reorganization equity; trade claims and the sovereign and corporate debt of industrialized and Emerging Market countries, which may be denominated in currencies other than U.S. dollars.
Securities and Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and an investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and transacts business on various exchanges.
Securities and Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"), and an investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and transacts business on various exchanges.
On October 31, 2023, the DOL proposed a “Retirement Security Rule” package that, if finalized, would replace the five-part test with a broader series of rules such that the fiduciary standard would apply to a wider range of client relationships.
On October 31, 2023, the Department of Labor (“DOL”) proposed a “Retirement Security Rule” package that, if finalized, would replace the five-part test historically used to determine who was an investment advice fiduciary with a broader series of rules such that the fiduciary standard would apply to a wider range of client relationships.
The SEC and FINRA have previously expressed interest in reviewing the programs under which broker-dealers offer FDIC-insured accounts to clients and their potential impact on the financial system. In December 2021, the SEC proposed further amendments to the rules governing money market funds.
The SEC and FINRA have previously expressed interest in reviewing the programs under which broker-dealers offer FDIC-insured accounts to clients and their potential impact on the financial system.
Under rules issued by the SEC regarding registration of municipal advisers, certain activities will be covered by the fiduciary duty of a municipal adviser to its government clients imposed by the Dodd-Frank Act, and result in the need for new written representations by issuers.
The Consumer Financial Protection Bureau also implemented new rules affecting the interaction between financial institutions and consumers. 12 Table of Contents Under rules issued by the SEC regarding registration of municipal advisers, certain activities will be covered by the fiduciary duty of a municipal adviser to its government clients imposed by the Dodd-Frank Act, and result in the need for new written representations by issuers.
SROs adopt rules (subject to approval by the SEC) governing the industry and conduct periodic examinations of Oppenheimer's and Freedom's operations. Securities firms are also subject to regulation by state securities commissions in the states in which they do business.
As of December 31, 2023, Oppenheimer no longer provides commodity-related services to its customers. SROs adopt rules (subject to approval by the SEC) governing the industry and conduct periodic examinations of Oppenheimer's and Freedom's operations. Securities firms are also subject to regulation by state securities commissions in the states in which they do business.
In addition to a comprehensive healthcare and benefits program, the Company offers various health and wellness programs including confidential emotional support, work-life solutions, financial resources, and campaigns to promote the physical and emotional well-being of our employees. Throughout 2023, most of our employees worked under a hybrid arrangement that provided some flexibility to work on a remote basis.
In addition to a comprehensive healthcare and benefits program, the Company offers various health and wellness programs including confidential emotional support, work-life solutions, financial resources, and campaigns to promote the physical and emotional well-being of our employees.
The development of the firm’s current and future leaders is critical to the future growth of the Company. This starts with a focus on the professional development of entry-level employees by offering a variety of programs, including the annual Summer Internship Program, Investment Banking Analyst Program and associate Financial Professional Program.
This starts with a focus on the professional development of entry-level employees by offering a variety of programs, including the annual Summer Internship Program, Capital Markets Trainee Program, Investment Banking Analyst Program and Associate Financial Professional Program.
Numerous other states are considering privacy legislation either along the lines of, or with more onerous requirements than, the CCPA. The General Data Protection Regulation (“GDPR”) imposes additional requirements for companies that collect or store personal data of European Union residents.
Numerous other states are considering privacy legislation either along the lines of, or with more onerous requirements than, the CCPA, or have adopted new privacy laws that will go into effect in 2025 and 2026. 13 Table of Contents The General Data Protection Regulation (“GDPR”) imposes additional requirements for companies that collect or store personal data of European Union residents.
Oppenheimer provides dedicated senior banker leadership throughout the life cycle of each financial advisory transaction, which combines our structuring and negotiating expertise with our industry knowledge, extensive relationships and capital markets capabilities.
Mergers & Acquisitions — Oppenheimer advises buyers and sellers on sales, divestitures, mergers, acquisitions, tender offers, privatizations, and joint ventures. Oppenheimer provides dedicated senior banker leadership throughout the life cycle of each financial advisory transaction, which combines our structuring and negotiating expertise with our industry knowledge, extensive relationships and capital markets capabilities.
Oppenheimer Investments Asia Limited is regulated by the Securities and Futures Commission ("SFC") in Hong Kong. Oppenheimer Israel Ltd. operates subject to the authority of the Israel Securities Authority.
Oppenheimer Investments Asia Limited is regulated by the Securities and Futures Commission ("SFC") in Hong Kong.
Failure to meet the requirements of the Bank Secrecy Act, the Patriot Act or FinCEN can lead to regulatory actions including significant fines and penalties as well as significant reputational damage. The Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) — The Sarbanes-Oxley Act effected significant changes to corporate governance, auditing requirements and corporate reporting.
Failure to meet the requirements of the Bank Secrecy Act, the Patriot Act or FinCEN can lead to regulatory actions including significant fines and penalties as well as significant reputational damage.
Brokerage commissions are charged on investment products in accordance with a schedule which Oppenheimer has formulated. Discounts are available to and can be negotiated with customers based on transaction size and volume as well as a number of other factors. In recent years, an increasing number of clients have chosen to do business through fee-based accounts.
A portion of Oppenheimer's revenue is derived from commissions from private clients through accounts with transaction-based pricing. Brokerage commissions are charged on investment products in accordance with a schedule which Oppenheimer has formulated. Discounts are available to and can be negotiated with customers based on transaction size and volume as well as a number of other factors.
In May 2016, FinCEN issued a new rule that, since May 2018, has required certain financial institutions, including U.S. banks and broker-dealers, to obtain certain beneficial ownership information from legal entity clients.
The Anti-Money Laundering Act of 2020 is intended to strengthen, modernize and streamline the existing AML regime. In May 2016, FinCEN issued a new rule that, since May 2018, has required certain financial institutions, including U.S. banks and broker-dealers, to obtain certain beneficial ownership information from legal entity clients.
Oppenheimer began reporting complex option trades in 2021. Smaller broker-dealers were required to report equity and option trades in 2021. In May 2024, client personal information must begin to be submitted. The CAT NMS Plan requires SROs to create plans to eliminate duplicative reporting.
Smaller broker-dealers were required to report equity and option trades in 2021. In May 2024, client personal information began to be submitted. The CAT NMS Plan requires SROs to create plans to eliminate duplicative reporting. In February, 2025, the SEC proposed to cease requiring the submission of client Personal Information (PII) effective immediately.
Increasingly, regulators (including both the SEC and FINRA) are focused on broker-dealer record retention of business communications by employees. In this context, there has been particular focus on texting by employees and the retention and storage of texting records. Included in this attention has been an industry “sweep” resulting in substantial fines of firms including the Company.
In this context, there has been particular focus on texting and other off-channel communications by employees and the retention and storage of such records. Included in this attention has been an industry “sweep” resulting in substantial fines of firms including the Company.
Oppenheimer Israel Ltd. Oppenheimer Israel (OPCO) Ltd., which is based in Tel Aviv, Israel, provides investment services including investment banking and merger and acquisition advice in the State of Israel and operates subject to the authority of the Israel Securities Authority. BondWave LLC The Company acquired BondWave LLC (“BondWave”), in December of 2023.
Oppenheimer Israel Ltd. Oppenheimer Israel (OPCO) Ltd., which is based in Tel Aviv, Israel, provides trading in foreign securities including both debt and equity as well as investment services including investment banking and merger and acquisition advice in the State of Israel and operates subject to the authority of the Israel Securities Authority.
As of December 31, 2023, Oppenheimer Europe Ltd. was in compliance with its regulatory requirements. Oppenheimer Investments Asia Limited was approved by the SFC to provide institutional fixed income and equities brokerage services to Hong Kong institutional investors and corporate finance advisory services to Hong Kong institutional clients.
Oppenheimer Investments Asia Limited was approved by the SFC to provide institutional fixed income and equities brokerage services to Hong Kong institutional investors and corporate finance advisory services to Hong Kong institutional clients.
A breakdown of the firm’s compensation as a percentage of revenue by business segment is as follows: 2023 2022 2021 Total Firm 62.7 % 66.7 % 64.3 % Private Client 49.8 % 55.9 % 64.2 % Asset Management 28.1 % 24.4 % 19.3 % Capital Markets 77.9 % 77.3 % 59.0 % Employee Safety and Well-Being The health and well-being of our employees and their loved ones is paramount to the firm.
A breakdown of the firm’s compensation as a percentage of revenue by business segment is as follows: 2024 2023 2022 Total Firm 65.4 % 62.7 % 66.7 % Wealth Management 52.9 % 47.6 % 51.9 % Capital Markets 72.3 % 77.9 % 77.3 % Employee Safety and Well-Being The health and well-being of our employees and their loved ones is paramount to the firm.
This group was formed to provide powerful growth opportunities for many of our clients and is an important step towards strengthening Oppenheimer’s private capital markets business.
Services include bespoke strategic and tactical advisory as well as primary fundraising, secondaries, co-investments and direct transactions. This group was formed to provide powerful growth opportunities for many of our clients and is an important step towards strengthening Oppenheimer’s private capital markets business.
Our ability to compete effectively in these businesses is substantially dependent on our continuing ability to attract, retain and motivate qualified professionals, including successful financial advisors, research analysts, investment bankers, trading professionals, portfolio managers and other revenue producing or specialized support personnel.
Our ability to compete effectively in these businesses is substantially dependent on our continuing ability to attract, retain and motivate qualified professionals, including successful financial advisors, research analysts, investment bankers, trading professionals, portfolio managers and other revenue producing or specialized support personnel. 10 Table of Contents The Company believes that the principal factors affecting competition in the securities and investment banking industries are the quality and ability of professional personnel and relative prices of services and products offered.
Research professionals cover Emerging Market fixed income issuers, focus on sovereign bonds and provide commentary on Emerging Market corporate bond issuers. Municipal bond research professionals are dedicated to the tax-exempt municipal bond market.
Our mortgage backed securities practice focuses on the detailed analysis of individual agency and non-agency mortgage backed securities. Research 5 Table of Contents professionals cover Emerging Market fixed income issuers, focus on sovereign bonds and provide commentary on Emerging Market corporate bond issuers. Municipal bond research professionals are dedicated to the tax-exempt municipal bond market.
Among other opportunities, we offer internships to selected college students, professionals returning to the workforce, and veterans, which may lead to permanent roles, and we offer pipeline programs which accelerate the progression from entry level positions for recent graduates across many areas of the firm. We are also committed to supporting associates in reaching their professional goals.
We have competitive programs dedicated to selecting new talent and enhancing the skills of our associates. Among other opportunities, we offer internships to selected college students, and others, which may lead to permanent roles, and we offer pipeline programs which accelerate the progression from entry level positions for recent graduates across many areas of the firm.
Capabilities include: pre-trade and post-trade analytics; access to all major market centers in the US; access to sophisticated and custom algorithms; professional clearing and settlement expertise. Taxable Fixed Income Oppenheimer employs over 110 d edicated fixed income sales and trading professionals in offices in the U.S., the United Kingdom (London), the Isle of Jersey (St. Helier) and Asia (Hong Kong).
Taxable Fixed Income Oppenheimer employs over 110 d edicated fixed income sales and trading professionals in offices in the U.S., the United Kingdom (London), the Isle of Jersey (St. Helier) and Asia (Hong Kong).
See note 13 to the consolidated financial statements appearing in Item 8 for further discussion.
See note 19 to the consolidated financial statements appearing in Item 8 for further information on the Company's regulatory capital requirements.
Oppenheimer provides the following private client services: Full-Service Brokerage — Oppenheimer offers full-service brokerage covering investment alternatives including exchange-traded and over-the-counter corporate equity and debt securities, money market instruments, exchange-traded options, municipal bonds, mutual funds, exchange-traded funds, and unit investment trusts. A portion of Oppenheimer's revenue is derived from commissions from private clients through accounts with transaction-based pricing.
Oppenheimer provides the following wealth management services: Full-Service Brokerage — Oppenheimer offers full-service brokerage covering investment alternatives including exchange-traded and over-the-counter corporate equity and debt securities, money market instruments, exchange-traded options, municipal bonds, mutual funds, exchange-traded funds, certain precious metals and unit investment trusts.
Oppenheimer's industry coverage teams partner with Oppenheimer's Mergers and Acquisitions, Fund Placements and Advisory, Debt Advisory and Restructuring as well as Equities and Fixed Income platforms, to provide their clients with tailored advice and complete access to capital markets. Mergers & Acquisitions — Oppenheimer advises buyers and sellers on sales, divestitures, mergers, acquisitions, tender offers, privatizations, and joint ventures.
The investment banking industry coverage groups focus on the Consumer, Financial Institutions, Healthcare, Industrials and Technology sectors. Oppenheimer's industry coverage teams partner with Oppenheimer's Mergers and Acquisitions, Fund Placements and Advisory, Debt Advisory and Restructuring as well as Equities and Fixed Income platforms, to provide their clients with tailored advice and complete access to capital markets.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeGiven the lower trading volume of the Company's Class A Stock, significant sales of shares of the Company's Class A Stock, or the expectation of these sales, could cause the Company's Class A Stock price to fall and increase the volatility of the Class A Stock generally. 26 Table of Contents The Company is the holding company of several operating subsidiaries, and is reliant on dividends and other sources of funding from those subsidiaries to pay dividends to holders of Class A Stock and meet our debt service and other obligations.
Biggest changeThe Company is the holding company of several operating subsidiaries, and is reliant on dividends and other sources of funding from those subsidiaries to pay dividends to holders of Class A Stock and meet other obligations.
For example, the failure to comply with the obligations imposed by the Exchange Act on broker-dealers and the Advisers Act on investment advisers, including recordkeeping, registration, advertising and operating requirements, disclosure obligations and prohibitions on fraudulent activities, or by the Investment Company Act of 1940, as amended (the "1940 Act"), or could result in investigations, sanctions and reputational damage.
For example, the failure to comply with the obligations imposed by the Exchange Act on broker-dealers and the Advisers Act on investment advisers, including recordkeeping, registration, advertising and operating requirements, disclosure obligations and prohibitions on fraudulent activities, or by the Investment Company Act of 1940, as amended (the "1940 Act"), could result in investigations, sanctions and reputational damage.
The voting power of the holders of Class B Stock may have the effect of depressing the price of the Company's Class A Stock, and delaying or preventing a change in control of the Company or resulting in the receipt of a "control premium" by the controlling stockholder which premium would not be received by the holders of the Class A Stock.
The voting power of the holders of the Class B Stock may have the effect of depressing the price of the Company's Class A Stock, and delaying or preventing a change in control of the Company or resulting in the receipt of a "control premium" by the controlling stockholder which premium would not be received by the holders of the Class A Stock.
If the Company is found to have violated any applicable laws, rules or regulations, formal administrative or judicial proceedings may be initiated against it that may result in censure, fine, civil or criminal penalties, including treble damages in the case of insider trading violations, the issuance of cease-and-desist orders, the suspension or termination of our broker-dealer or investment advisory activities, the suspension or disqualification of our officers or employees; or other adverse consequences.
If the Company is found to have violated any applicable laws, rules or regulations, formal administrative or judicial proceedings may be initiated against it that may result in censure, fine, civil or criminal penalties, including treble damages in the case of insider trading violations, the issuance of cease-and-desist orders, the limitation, suspension or termination of our broker-dealer or investment advisory activities, the suspension or disqualification of our officers or employees; or other adverse consequences.
However, our efforts in this regard may be insufficient and may expose the Company to reputational risk from entities purporting to "grade" ESG platforms, reductions in business with certain clients demanding greater ESG efforts or to regulatory expectation and enforcement if such practices become the subject of rule-making by regulators to whom we are subject.
However, our efforts in this regard may be insufficient and may expose the Company to reputational risk from entities purporting to "grade" ESG platforms, reductions in business with certain clients demanding greater ESG efforts or to regulatory expectation and enforcement if such practices ever become the subject of rule-making by regulators to whom we are subject.
If interest rates decrease in immediate future periods, which appears highly probable, and/or balances within our cash sweep products decrease, the Company's profitability will be negatively impacted. Credit Risk Credit risk may expose the Company to losses caused by the inability of borrowers or other third parties to satisfy their obligations.
If interest rates continue to decrease in immediate future periods, which appears highly probable, and/or balances within our cash sweep products decrease, the Company's profitability will be negatively impacted. Credit Risk Credit risk may expose the Company to losses caused by the inability of borrowers or other third parties to satisfy their obligations.
As a holding company, we are dependent on dividends and other sources of liquidity from our various operating subsidiaries in order to meet our debt service obligations, make dividend payments to holders of Class A Stock once declared by our Board of Directors and meet our other obligations.
As a holding company, we are dependent on dividends and other sources of liquidity from our various Operating Subsidiaries in order to meet any debt service obligations, make dividend payments to holders of Class A Stock once declared by our Board of Directors and meet our other obligations.
Firms in the financial services industry have been operating in an onerous regulatory environment. The industry has experienced increased scrutiny from a variety of regulators, including the SEC, CFTC and FINRA as well as state regulators. Penalties and fines sought by regulatory authorities have increased substantially.
Firms in the financial services industry have been operating in an onerous regulatory environment. The industry has experienced increased scrutiny from a variety of regulators, including the SEC and FINRA as well as state regulators. Penalties and fines sought by regulatory authorities have increased substantially.
Concentration of risk may reduce revenues or result in losses in our market-making, investing, underwriting, including block trading, and lending businesses in the event of unfavorable market movements, or when market conditions are more favorable for our competitors.
Concentration of risk may reduce revenues or result in losses in our market-making, investing, underwriting, block trading, and lending businesses in the event of unfavorable market movements, or when market conditions are more favorable for our competitors.
The Company operates in Israel, the United Kingdom, the Isle of Jersey, Germany, Switzerland and Hong Kong. If the Company is unable to manage these risks relating to its foreign operations effectively, its reputation and results of operations could be harmed.
The Company operates in Israel, the United Kingdom, the Isle of Jersey, Switzerland and Hong Kong. If the Company is unable to manage these risks relating to its foreign operations effectively, its reputation and results of operations could be harmed.
Our results of operations have been, in the past, and may, in the future, be materially affected by market fluctuations due to global financial markets, economic conditions, public health epidemics, changes to global trade policies, tax legislation and tariffs and other factors, including the level and volatility of equity, fixed income and commodity prices, the level and term structure of interest rates, inflation and currency values, and the level of other market indices.
Our results of operations have been, in the past, and may, in the future, be materially affected by market fluctuations due to global financial markets, economic conditions, weather events, public health epidemics, changes to global trade policies, tax legislation and tariffs and other factors, including the level and volatility of equity, fixed income and commodity prices, the level and term structure of interest rates, inflation and currency values, and the level of other market indices.
The Company believes that price competition and pricing pressures in these and other areas will continue as institutional investors continue to reduce the amounts they are willing to pay, including reducing the number of brokerage firms they use, and as so of our competitors seek to obtain market share by reducing fees, commissions or margins.
The Company believes that price competition and pricing pressures in these and other areas will continue as institutional investors continue to reduce the amounts they are willing to pay, including reducing the number of brokerage firms they use, and as some of our competitors seek to obtain market share by reducing fees, commissions or margins.
The announcement by several large securities firms as well as a similar “no commission” offering by retail firms utilizing the internet and electronic trading have proven popular among retail clients both new to securities markets as well as some experienced investors and will only add to this pricing pressure, especially on the firms likes ours that cater to retail investors.
The announcement by several large securities firms as well as a similar “no commission” offering by retail firms utilizing the internet and electronic trading have proven popular among retail clients both new to securities markets as well as some experienced investors and will only add to this pricing pressure, especially on firms like ours that cater to retail investors.
Our risk management and monitoring processes seek to quantify and mitigate risk to more extreme market moves. However, severe market events have historically been difficult to predict and we could realize significant losses if extreme market events were to occur. 18 Table of Contents Holding large and concentrated positions may expose us to losses.
Our risk management and monitoring processes seek to quantify and mitigate risk to more extreme market moves. However, severe market events have historically been difficult to predict and we could realize significant losses if extreme market events were to occur. 17 Table of Contents Holding large and concentrated positions may expose us to losses.
While the Company has adopted a Code of Conduct and instituted training for its employees, it is difficult to predict when an employee may deviate from acceptable practices and open the Company to liability either from actions taken by other employees or by authorities. 31 Table of Contents
While the Company has adopted a Code of Conduct and instituted training for its employees, it is difficult to predict when an employee may deviate from acceptable practices and open the Company to liability either from actions taken by other employees or by authorities. 30 Table of Contents
The nature and timing of these changes can be difficult to predict and can have a material impact on our financial statements. In some cases, the new or revised accounting standard may require retrospective application, which would result in us restating prior-period financial statements.
The nature and timing of these changes can be difficult to predict and can have a material impact on our financial statements. In some cases, the new or revised accounting standards may require retrospective application, which would result in us restating prior-period financial statements.
If any person, including any of our associates, negligently disregards or intentionally breaches our established controls with respect to client or employee data, or otherwise mismanages or misappropriates such data, we could be subject to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution.
If any person, including any of our employees, negligently disregards or intentionally breaches our established controls with respect to client or employee data, or otherwise mismanages or misappropriates such data, we could be subject to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution.
If we fail to comply with specific ESG-related investor or client expectations and standards, or to provide the disclosure relating to ESG issues that any 23 Table of Contents third parties may believe is necessary or appropriate (regardless of whether there is a legal requirement to do so), our reputation, business, financial condition, and/or results of operations, as well as the price of our common stock could be negatively impacted.
If we fail to comply with specific ESG-related investor or client expectations and standards, or to provide the disclosure relating to ESG issues that any third parties may believe is necessary or appropriate (regardless of whether there is a legal requirement to do so), our reputation, business, financial condition, and/or results of operations, as well as the price of our common stock could be negatively impacted.
New regulations or guidance relating to climate change, as well as the perspectives of shareholders, employees and other stakeholders regarding climate change, may affect whether and on what terms and conditions we engage in certain activities or offer certain products.
New regulations or guidance relating to climate change, as well as the perspectives of stockholders, employees and other stakeholders regarding climate change, may affect whether and on what terms and conditions we engage in certain activities or offer certain products.
In addition, our ability to raise funding could be impaired if investors or lenders develop a negative perception of our long-term or short-term financial prospects due to factors such as an incurrence of large trading or operational losses, a downgrade by the rating agencies, or a decline in the level of our business activity, if regulatory authorities take significant action against us or our industry, or we discover significant employee misconduct or illegal activity.
In addition, our ability to raise funding could be impaired if investors or lenders develop a negative perception of our long-term or short-term financial prospects due to factors such as an incurrence of large trading or operational losses, or a decline in the level of our business activity, if regulatory authorities take significant action against us or our industry, or we discover significant employee misconduct or illegal activity.
A period of sustained downturns and/or volatility in the securities markets, and/or prolonged 27 Table of Contents levels of increasing interest rates, could lead to a return to increased credit market dislocations, reductions in the value of real estate, and other negative market factors which could significantly impair our revenues and profitability.
A period of sustained downturns and/or volatility in the securities markets, and/or prolonged levels of increasing interest rates, could lead to a return to increased credit market dislocations, reductions in the value of real estate, and other negative market factors which could significantly impair our revenues and profitability.
Failure of our technology systems, which could result from events beyond our control, or an inability to effectively 21 Table of Contents upgrade those systems or implement new technology-driven products or services, could result in financial losses, liability to clients, and violations of applicable privacy and other applicable laws and regulatory sanctions.
Failure of our technology systems, which could result from events beyond our control, or an inability to effectively upgrade those systems or implement new technology-driven products or services, could result in financial losses, liability to clients, and violations of applicable privacy and other applicable laws and regulatory sanctions.
If management’s estimates and assumptions are inaccurate, our financial position and results of operations could be materially and adversely impacted. At times, the Financial Accounting Standards Board (the “FASB”) and the SEC may amend or introduce new accounting standards or interpretive guidance that could impact the preparation of our financial statements.
If management’s estimates and assumptions are inaccurate, our financial position and results of operations could be materially and adversely impacted. 26 Table of Contents At times, the Financial Accounting Standards Board (the “FASB”) and the SEC may amend or introduce new accounting standards or interpretive guidance that could impact the preparation of our financial statements.
Broker-dealers are subject to regulations which cover all aspects of the securities business, including, without limitation sales methods and supervision, underwriting, trading practices among broker-dealers, emerging standards concerning fees and charges imposed on clients for fee-based programs, use and safekeeping of customers' funds and securities, anti-money laundering and the USA PATRIOT Act o 2001 (the "Patriot Act") compliance, capital structure of securities firms, trade and regulatory reporting, cybersecurity, pricing of services, compliance with Department of Labor ("DOL") rules and regulations for retirement accounts, compliance with lending practices (Regulation T), record keeping, and the conduct of directors, officers and employees.
Broker-dealers and investment advisers are subject to regulations which cover all aspects of the securities business, including, without limitation sales methods and supervision, underwriting, trading practices by and among broker-dealers and investment advisers, emerging standards concerning fees and charges imposed on clients for fee-based programs, use and safekeeping of customers' funds and securities, anti-money laundering and Patriot Act compliance, capital structure of securities firms, trade and regulatory reporting, cybersecurity, pricing of services, compliance with Department of Labor ("DOL") rules and regulations for retirement accounts, compliance with lending practices (Regulation T), record keeping, and the conduct of directors, officers and employees.
The Company maintains key man insurance on the life of its CEO. Approximately 98% of the shares of Class B Stock are held by Phase II 30 Table of Contents Financial Inc. ("Phase II"), a Delaware corporation controlled by Mr. Albert Lowenthal, the Chairman and CEO of the Company. In the event of Mr.
The Company maintains key man insurance on the life of its CEO. Approximately 98% of the shares of Class B Stock are held by Phase II Financial Inc. ("Phase II"), a Delaware corporation controlled by Mr. Albert Lowenthal, the Chairman and CEO of the Company. In the event of Mr.
Liquidity risk also encompasses our ability (or perceived ability) to meet our financial 19 Table of Contents obligations without experiencing significant business disruption or reputational damage that may threaten our viability as a going concern as well as the associated funding risks triggered by the market or idiosyncratic stress events that may negatively affect our liquidity and may impact our ability to raise new funding.
Liquidity risk also encompasses our ability (or perceived ability) to meet our financial obligations without experiencing significant business disruption or reputational damage that may threaten our viability as a going concern as well as the associated funding risks triggered by the market or idiosyncratic stress events that may negatively affect our liquidity and may impact our ability to raise new funding.
There are significant technical and financial costs and risks in the development of new or enhanced applications, including the risk that we might be unable to effectively use new technologies or adapt our applications to emerging industry standards.
There are significant technical and financial costs and risks in the 20 Table of Contents development of new or enhanced applications, including the risk that we might be unable to effectively use new technologies or adapt our applications to emerging industry standards.
Factors that we cannot control, such as disruption of the financial markets or negative views about the financial services industry generally, including concerns regarding fiscal matters in the U.S. and other geographic areas, could impair our ability to raise funding.
However, factors that we cannot control, such as disruption of the financial markets or negative views about the financial services industry generally, including concerns regarding fiscal matters in the U.S. and other geographic areas, could impair our ability to raise funding, including from our contingent funding sources.
As a financial institution, we have multiple stakeholders, including our shareholders, clients, associates, federal, state and other regulatory authorities, as well as the communities in which we operate, and these stakeholders will often have differing priorities and expectations regarding ESG issues.
As a financial institution, we have multiple stakeholders, including our stockholders, clients, employees, federal, state and other regulatory authorities, as well as the communities in which we operate, and these stakeholders will often have differing priorities and expectations regarding ESG issues.
We continue to focus on improving the resilience of our operations, fostering an inclusive workforce and maintaining a system of good corporate governance.
We continue to focus on improving the resilience of our operations, fostering an inclusive 22 Table of Contents workforce and maintaining a system of good corporate governance.
Management fees are primarily based on assets under management. Assets under management balances are impacted by net inflow/outflow of client assets and changes in market values.
Management fees are primarily based on assets 27 Table of Contents under management. Assets under management balances are impacted by net inflow/outflow of client assets and changes in market values.
Substantial market fluctuations could also cause variations in the value of our investments in our funds, the flow of investment capital into or from Assets Under Management ("AUM"), and the way customers allocate capital among money market, equity, fixed income or other investment alternatives, which could negatively impact our Private Client and Asset Management business segments.
Substantial market fluctuations could also cause variations in the value of our investments in our funds, the flow of investment capital into or from Assets Under Management ("AUM"), and the way customers allocate capital among money market, equity, fixed income or other investment alternatives, which could negatively impact our Wealth Management business segment.
The controlling stockholder may have potential conflicts of interest with other stockholders including the ability to determine the outcome of "say on pay" votes at the Company. The presence of Class B voting shares may also result in the Company receiving low “ESG scores” by some parties having unforeseeable consequences on the Company.
The controlling stockholder may have potential conflicts of interest with other stockholders including the ability to determine the outcome of "say on pay" votes at the Company. The presence of the Class B stock may also result in the Company receiving low “ESG scores” by some parties, which could result in unforeseeable consequences to the Company.
In the normal course of business, the operating subsidiaries have been and continue to be the subject of numerous civil actions and arbitrations arising out of customer complaints relating to our activities as a broker-dealer and investment adviser, as an employer and as a result of other business activities.
In the normal course of business, the Operating Subsidiaries have been and continue to be the subject of numerous civil actions and arbitrations arising out of customer complaints (including complaints from non-customers asserting standing) relating to our activities as a broker-dealer and investment adviser, as an employer and as a result of other business activities.
Although cybersecurity incidents among financial services firms are on the rise, we have not experienced any material losses relating to cyber-attacks or other information security breaches. However, there can be no assurance that we will not suffer such losses in the future.
Although cybersecurity incidents among financial services firms are on the rise, we have not experienced any material losses relating to cyber-attacks or other information security breaches, although such attacks are occurring more frequently and with increased sophistication. However, there can be no assurance that we will not suffer such losses in the future.
U.S. markets may also be impacted by political and civil unrest occurring in the Middle East, Eastern Europe, Russia, Venezuela and Asia. Concerns about the European Union ("EU"), including Britain's January 2020 exit from the EU ("Brexit"), and the stability of the EU's sovereign debt, has caused uncertainty and disruption for financial markets globally.
U.S. markets may also be impacted by political and civil unrest occurring in the Middle East, Eastern Europe, Russia, Venezuela and Asia. Concerns about the EU, including Brexit, and the stability of the EU's sovereign debt, has caused uncertainty and disruption for financial markets globally.
The value of our financial instruments may be materially affected by market fluctuations. Market volatility, illiquid market conditions and disruptions in the credit markets may make it extremely difficult to value and monetize certain of our financial instruments, particularly during periods of market displacement.
Market volatility, illiquid market conditions and disruptions in the credit markets may make it extremely difficult to value and monetize certain of our financial instruments, particularly during periods of market displacement.
During periods of unfavorable market or economic conditions, the level of individual investor participation in the global markets, as well as the level of client assets, may also decrease, which would negatively impact the results of our Private Client and Asset Management business segments.
During periods of unfavorable market or economic conditions, the level of individual investor participation in the global markets, as well as the level of client assets, may also decrease, which would negatively impact the results of our Wealth Management business segment.
Changes in economic and political conditions, including economic output levels, interest and inflation rates, employment levels, prices of commodities including oil and gas, exogenous market events, consumer confidence levels, public health emergencies and fiscal and monetary policy can affect market conditions.
Changes in economic and political conditions, including economic output levels, interest and inflation rates, employment levels, trade policies and tariffs, prices of commodities including oil and gas, exogenous market events, consumer confidence levels, public health emergencies, weather events and consequential damage, and fiscal and monetary policy can affect market conditions.
The declaration and payment of future cash dividends and authorization of future share repurchases is subject to the Board of Director’s discretion and may be impacted by a number of factors, including but not limited to our net income levels, ability to generate positive operating cash flows, compliance with the Indenture for our 5.50% Senior Secured Notes, subsidiary capital requirements and general financial and business conditions.
The declaration and payment of future cash dividends and authorization of future share repurchases is subject to the Board of Director’s discretion and may be impacted by a number of factors, including but not limited to our net income levels, ability to generate positive operating cash flows, subsidiary capital requirements and general financial and business conditions.
The Company issues two classes of shares, Class A non-voting common stock (the “Class A Stock") and Class B voting common stock (the "Class B Stock"). At December 31, 2023, there were 99,665 shares of Class B Stock outstanding compared to 10,186,783 shares of Class A Stock.
The Company issues two classes of shares, Class A non-voting common stock (the “Class A Stock") and Class B voting common stock (the "Class B Stock"). At December 31, 2024, there were 99,665 shares of Class B Stock outstanding compared to 10,231,736 shares of Class A Stock outstanding.
Additionally, the use of "soft dollars," where a portion of commissions paid to broker-dealers in connection with the execution of trades also pays for research and other services provided to advisors has been mostly prohibited in Europe and, is periodically reexamined in the U.S. and may be limited or modified in the future The use of various mutual fund share classes has also come under significant regulatory scrutiny.
Additionally, the use of "soft dollars," where a portion of commissions paid to broker-dealers in connection with the execution of trades also pays for research and other services provided to advisors has been mostly prohibited in Europe and is periodically reexamined in the U.S. and may be limited or modified in the future.
Our Board of Directors declared cash dividends of $0.15 per share each quarter in 2023 to holders of Class A and Class B Stock and also authorized the Company to repurchase shares of its Class A Stock.
Our Board of Directors declared cash dividends of $0.66 per share in 2024 to holders of Class A and Class B Stock and also authorized the Company to repurchase shares of its Class A Stock.
Many of the Company's competitors have substantially greater resources to invest in technological improvements. Failure to successfully keep pace with technological change affecting the financial services industry could have a material adverse impact on the Company's business and, in turn, the Company's financial condition and results of operations.
Failure to successfully keep pace with technological change affecting the financial services industry could have a material adverse impact on the Company's business and, in turn, the Company's financial condition and results of operations.
It is possible that other EU member states may choose to follow Britain's lead and leave the EU. Any negative impact on economic conditions and global markets from these developments could adversely affect our business, financial condition and liquidity.
Continued uncertainties loom over the outcome of the EU's financial support programs. It is possible that other EU member states may choose to follow Britain's lead and leave the EU. Any negative impact on economic conditions and global markets from these developments could adversely affect our business, financial condition and liquidity.
There is risk associated with the sufficiency of coverage under the Company’s insurance policies. 22 Table of Contents The Company's operations and financial results are subject to risks and uncertainties related to the use of a combination of insurance, self-insured retention and self-insurance for a number of risks, including most significantly property and casualty, general liability, cyber-crime, workers' compensation, and the portion of employee-related health care benefits plans funded by the Company, and certain errors and omissions liability, among others.
The Company's operations and financial results are subject to risks and uncertainties related to the use of a combination of insurance, self-insured retention and self-insurance for a number of risks, including most significantly property and casualty, general liability, cyber-crime, workers' compensation, and the portion of employee-related health care benefits plans funded by the Company, and certain errors and omissions liability, among others.
Many aspects of the Company's business involve substantial risks of liability. An underwriter is exposed to substantial liability under federal and state securities laws, other federal and state laws, and court decisions, including decisions with respect to underwriters' liability and limitations on indemnification of underwriters by issuers.
An underwriter is exposed to substantial liability under federal and state securities laws, other federal and state laws, and court decisions, including decisions with respect to underwriters' liability and limitations on indemnification of underwriters by issuers.
Albert Lowenthal, the Chairman and CEO of the Company, which allows Mr. Lowenthal to control all matters requiring stockholder approval. Due to the lack of voting power, the holders of the Class A Stock have limited influence on corporate matters.
Approximately 98% of the Class B Stock is held by an entity controlled by Mr. Albert Lowenthal, the Chairman and CEO of the Company, which allows Mr. Lowenthal to control all matters requiring stockholder approval. Due to the lack of voting power, the holders of the Class A Stock have limited influence on corporate matters.
New regulations may result in enhanced standards of duty on broker-dealers in their dealings with their clients (fiduciary standards). Consequently, these regulations often serve to limit the Company's activities, including through net capital, customer protection and market conduct requirements, including those relating to principal trading. Much of the regulation of broker-dealers has been delegated to self-regulatory organizations, principally FINRA.
New regulations may result in enhanced standards of duty on broker-dealers in their dealings with their clients (fiduciary standards). Consequently, these regulations often serve to limit the Company's activities, including through net capital, customer protection 23 Table of Contents and market conduct requirements, including those relating to principal trading.
We may be unable to sell some of our assets or we may have to sell assets at a discount to market value, either of which could adversely affect our results of operations, cash flows and financial condition. Our borrowing costs and access to the debt capital markets depend on our credit ratings.
We may be unable to sell some of our assets or we may have to sell assets at a discount to market value, either of which could adversely affect our results of operations, cash flows and financial condition.
The voting power associated with the Class B Stock allows holders of Class B Stock to effectively exercise control over all matters requiring stockholder approval, including the election of all directors and approval of significant corporate transactions, and other matters affecting the Company. Approximately 98% of the Class B Stock is held by an entity controlled by Mr.
The voting power associated with the Class B Stock allows holders of the 25 Table of Contents Class B Stock to effectively exercise control over all matters requiring stockholder approval, including the election of all directors and approval of significant corporate transactions, and other matters affecting the Company.
If the Company misjudged the amount of damages that may be assessed against it from pending or threatened claims, or if the Company is unable to adequately estimate the amount of damages that will be assessed against it from claims that arise in the future and reserve accordingly, its financial condition and results of operations may be materially adversely affected. 25 Table of Contents RISK MANAGEMENT The Company's risk management policies and procedures may leave it exposed to unidentified risks or an unanticipated level of risk.
If the Company misjudged the amount of damages that may be assessed against it from pending or threatened claims, or if the Company is unable to adequately estimate the amount of damages that will be assessed against it from claims that arise in the future and reserve accordingly, its financial condition and results of operations may be materially adversely affected.
A continued lessening of investor interest in active investing and continued increase in passive investing may lead to a continued decline in the revenue the Company generates from commissions on the execution of trading transactions and, in respect of its market-making activities, a reduction in the value of its trading positions and commissions and spreads. 28 Table of Contents The Company has experienced significant pricing pressure in areas of its business, which may impair its revenues and profitability.
A continued lessening of investor interest in active investing and continued increase in passive investing may lead to a continued decline in the revenue the Company generates from commissions on the execution of trading transactions and, in respect of its market-making activities, a reduction in the value of its trading positions and commissions and spreads.
We may introduce new products or services or change processes or reporting, including in connection with new regulatory requirements, resulting in new operational risks that we may not fully appreciate or identify, including the requirement to implement shortened settlement cycles.
We may introduce new products or services or change processes or reporting, including in connection with new regulatory requirements, resulting in new operational risks that we may not fully 19 Table of Contents appreciate or identify.
The Company's failure to repay its indebtedness and make interest payments as required by our debt obligations could have a material adverse effect on our results of operations and financial condition, including the acceleration of the payment of debt.
The Company cannot assure that its operations will generate funds sufficient to repay its existing debt obligations as they come due. The Company's failure to repay its indebtedness and make interest payments as required by our debt obligations could have a material adverse effect on our results of operations and financial condition.
The Company believes that it effectively evaluates and manages the market, credit, liquidity and other risks to which it is exposed. Nonetheless, the effectiveness of the Company’s ability to manage risk exposure can never be completely or accurately predicted or fully assured, and there can be no guarantee that the Company’s risk management will be successful.
Nonetheless, the effectiveness of the Company’s ability to manage risk exposure can never be completely or accurately predicted or fully assured, and there can be no guarantee that the Company’s risk management will be successful.
FINRA adopts rules, subject to approval by the SEC, which govern its members and conducts periodic examinations of member firms' operations.
Much of the regulation of broker-dealers has been delegated to self-regulatory organizations, principally FINRA. FINRA adopts rules, subject to approval by the SEC, which govern its members and conducts periodic examinations of member firms' operations.
The new rules and processes related thereto will likely limit revenue and have increased, and will likely continue to increase costs, including, but not limited to, compliance costs associated with new or enhanced technology as well as increased litigation costs. ( see “Business – Regulation – Fiduciary Standard – Rulemaking by the U.S.
Reg BI may limit revenue and has increased, and will likely continue to increase costs, including, but not limited to, compliance costs associated with new or enhanced technology as well as increased litigation costs. (see “Business – Regulation – Fiduciary Standard – Rulemaking by the U.S. Department of Labor and SEC” in Part I, Item 1).
During 2023, several large regional banks failed and their operations were assumed by other institutions. During this period of uncertainty, markets were negatively impacted and clients, redeployed their cash deposits to institutions deemed to be “safer”.
The commercial soundness of many financial institutions may be closely interrelated as a result of credit, trading, clearing, or other relationships between these institutions. During 2023, several large regional banks failed and their operations were assumed by other institutions. During this period of uncertainty, markets were negatively impacted and clients redeployed their cash deposits to institutions deemed to be “safer”.
Such changes could be costly and potentially disruptive to our operations and business relationships in affected regions. The ability to attract, develop and retain highly skilled and productive employees, particularly qualified financial advisors is critical to the success of the Company's business.
The ability to attract, develop and retain highly skilled and productive employees, particularly qualified financial advisors is critical to the success of the Company's business.
In addition, insurance claims may divert management resources away from operating the business. Climate change concerns could disrupt our businesses, adversely affect client activity levels, adversely affect the creditworthiness of our counterparties and damage our reputation.
Climate change concerns could disrupt our businesses, adversely affect client activity levels, adversely affect the creditworthiness of our counterparties and damage our reputation.
Hostilities between Russia and Ukraine and the conflict between Israel and Hamas as well as related disruptions of shipping routes in the Red Sea and related military action could have unforeseen and negative impacts upon the markets and the Company and its operations. Continued uncertainties loom over the outcome of the EU's financial support programs.
Hostilities between Russia and Ukraine, the conflict between Israel, Hamas and Iran, as well as related disruptions of shipping routes in the Red Sea and related military action, and military and other risks related to China's territorial claims adversely affecting its neighbors including Taiwan, could have unforeseen and negative impacts upon the markets and the Company and its operations.
The effective use of technology increases efficiency and enables financial institutions to better serve customers and reduce costs. The Company's future success depends, in part, upon its ability to address the needs of its customers by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in the Company's operations.
The Company's future success depends, in part, upon its ability to address the needs of its customers by using technology to provide products and services that 21 Table of Contents will satisfy customer demands, as well as to create additional efficiencies in the Company's operations. Many of the Company's competitors have substantially greater resources to invest in technological improvements.
In recent years the Company has experienced, and continues to experience, significant pricing pressures on trading margins and commissions in debt and equity trading. In the fixed income market, regulatory requirements have resulted in greater price transparency, leading to increased price competition and decreased trading margins.
In the fixed income market, regulatory requirements have resulted in greater price transparency, leading to increased price competition and decreased trading margins.
Our businesses are highly dependent on our ability to process and report, on a daily basis, a large number of transactions across numerous markets.
Our businesses are highly dependent on our ability to process and report, on a daily basis, a large number of transactions across numerous markets. Further shortening of settlement cycles may place additional stresses on our systems and resources and may impact our ability to perform these processes on a timely basis.
Department of Labor and SEC” in Part I, Item 1). It is not possible to determine the extent of the impact of any new laws, regulations or initiatives that may be imposed, or whether any existing proposals will become law.
It is not possible to determine the extent of the impact of any new laws, regulations or initiatives that may be imposed, or whether any existing proposals will become law. Conformance with any new laws or regulations could make compliance more difficult and expensive and affect the manner in which we conduct business.
Increasingly, regulators have instituted a practice of "regulation by enforcement" where new interpretations of existing regulations are introduced by bringing enforcement actions against securities firms for activities that occurred in the past but were not then thought to be problematic. 24 Table of Contents We also may be adversely affected as a result of new or revised legislation or regulations imposed by the SEC, other U.S. or foreign governmental regulatory authorities or SROs (e.g., FINRA) that supervise the financial markets.
Increasingly, regulators have instituted a practice of "regulation by enforcement" where new interpretations of existing regulations are introduced by bringing enforcement actions against securities firms for activities that occurred in the past but were not then thought to be problematic.
Liquidity Risk Liquidity risk refers to the risk that we will be unable to finance our operations due to a loss of access to the capital markets or difficulty in liquidating our assets.
Recent failures of enterprises central to the functioning of the digital currency market have created uncertainty as to the impact of this market on currency markets and the general economy. 18 Table of Contents Liquidity Risk Liquidity risk refers to the risk that we will be unable to finance our operations due to a loss of access to the capital markets or difficulty in liquidating our assets.
Lowenthal's death or incapacity, control of Phase II would pass to Mr. Lowenthal's spouse. If the Company's senior executives or employees terminate their employment and the Company is unable to find suitable replacements in relatively short periods of time, its operations may be materially and adversely affected.
If the Company's senior executives or employees terminate their employment and the Company is unable to find suitable replacements in relatively short periods of time, its operations may be materially and adversely affected. 29 Table of Contents The precautions the Company takes to prevent and detect employee misconduct may not be effective and the Company could be exposed to unknown and unmanaged risks or losses.
The Company may be adversely affected by new or revised legislation or regulations or changes in the interpretation or enforcement of existing laws and rules by these governmental regulatory authorities and self-regulatory organizations. Oppenheimer is a broker-dealer and investment adviser registered with the SEC and is primarily regulated by FINRA.
The securities industry and the Company's business are subject to extensive regulation by the SEC, state securities regulators, other governmental regulatory authorities and industry SROs. The Company may be adversely affected by new or revised legislation or regulations or changes in the interpretation or enforcement of existing laws and rules by these governmental regulatory authorities and self-regulatory organizations.
Other risk management methods depend on evaluation of information regarding markets, clients or other matters that are publicly available or otherwise accessible. This information may not be accurate, complete or up-to-date or properly evaluated. Management of operational, legal and regulatory risk requires, among other things, policies and procedures to properly record and verify a large number of transactions and events.
As a result, these methods may not predict future risk exposures, which could be significantly greater than historical measures indicate. Other risk management methods depend on evaluation of information regarding markets, clients or other matters that are publicly available or otherwise accessible. This information may not be accurate, complete or up-to-date or properly evaluated.
Conformance with any new laws or regulations could make compliance more difficult and expensive and affect the manner in which we conduct business. If the Company violates the securities laws, or is involved in litigation in connection with a violation, the Company's reputation and results of operations may be adversely affected.
If the Company violates the securities laws, or is involved in litigation in connection with a violation, the Company's reputation and results of operations may be adversely affected. 24 Table of Contents Many aspects of the Company's business involve substantial risks of liability.
The Company cannot give assurances that its policies and procedures will effectively and accurately record and verify this information. The Company seeks to monitor and control its risk exposure through a variety of separate but complementary financial, credit, operational, compliance and legal reporting systems.
The Company seeks to monitor and control its risk exposure through a variety of separate but complementary financial, credit, operational, compliance and legal reporting processes and/or systems. The Company believes that it effectively evaluates and manages the market, credit, liquidity and other risks to which it is exposed.
In lieu of organic growth, it becomes increasingly necessary to grow through the acquisition of a business or businesses that fulfill the Company’s strategic decisions for growth. However, due to competition or the cost of such acquisitions, such expansion may not be available on a profitable basis and may threaten the Company’s ongoing ability to expand its business.
In lieu of organic growth, it becomes increasingly necessary to grow through the acquisition of a business or businesses that fulfill the Company’s strategic decisions 28 Table of Contents for growth.
The policies and procedures the Company employs to identify, monitor and manage risks may not be fully effective. Some methods of risk management are based on the use of observed historical market behavior. As a result, these methods may not predict future risk exposures, which could be significantly greater than historical measures indicate.
RISK MANAGEMENT The Company's risk management policies and procedures may leave it exposed to unidentified risks or an unanticipated level of risk. The policies and procedures the Company employs to identify, monitor and manage risks may not be fully effective. Some methods of risk management are based on the use of historical information.
Furthermore, new regulations regarding the management of hedge funds and the use of certain investment products may impact our investment management business and result in increased costs. For example, many regulators around the world adopted disclosure and reporting requirements relating to the hedge fund business.
For example, many regulators around the world adopted disclosure and reporting requirements relating to the hedge fund business.
The business operations that are conducted outside of the United States subject the Company to unique risks and potential loss.
However, due to competition or the cost of such acquisitions, such expansion may not be available on a profitable basis and may threaten the Company’s ongoing ability to expand its business. The business operations that are conducted outside of the United States subject the Company to unique risks and potential loss.
The number of engagements the Company has at any given time is subject to change and may not necessarily result in future revenues. Underwriting activity remained weak in 2023 and may continue so in the immediate future.
The number of engagements the Company has at any given time is subject to change and may not necessarily result in future revenues. • A portion of the Company's revenues are derived from various asset management advisory fees that often are primarily comprised of base management and performance (or incentive) fees.
Reg BI imposes a new federal standard of conduct on registered broker-dealers and their associated persons when dealing with retail clients and requires that a broker-dealer and its representatives act in the best interest of such client and not place its own interests ahead of the customer’s interests. The effective compliance date for Reg BI was June 30, 2020.
Additionally, Reg BI requires, among other things, that a broker-dealer and its representatives act in the best interest of such client and not place its own interests ahead of the customer’s interests when making a recommendation to that client of any securities transaction or investment strategy.
REGULATORY AND COMPLIANCE RISKS The Company is subject to extensive securities regulation and the failure to comply with these regulations could subject it to monetary penalties or sanctions. The securities industry and the Company's business are subject to extensive regulation by the SEC, state securities regulators, other governmental regulatory authorities and industry self-regulatory organizations.
The change in administrations at the federal level may significantly impact expectations around ESG policies and our ability to foresee necessary changes to meet societal standards . REGULATORY AND COMPLIANCE RISKS The Company is subject to extensive securities regulation and the failure to comply with these regulations could subject it to monetary penalties or sanctions.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe CIO and his direct reports, including the CISO, discuss action items related to risks at a standing monthly meeting. The CISO and many members of his team have multiple decades of cybersecurity related experience.
Biggest changeThe Company’s cybersecurity function is led by the Company’s Chief Information Officer ("CIO") and the Company’s Chief Information Security Officer ("CISO"), who reports to the Company’s CIO. The CIO and his direct reports, including the CISO, discuss action items related to risks at a standing monthly meeting.
Risk reporting is provided at monthly meetings of the firm’s cross-business Cybersecurity Committee and periodic presentations to the firm’s Risk Management Committee, at which many members of the Company’s senior management are present. 32 Table of Contents The CEO meets regularly with the CIO to discuss cybersecurity threats and existing and potentially new technology systems including those related to cybersecurity.
Risk reporting is provided at monthly meetings of the firm’s cross-business Cybersecurity Committee and periodic presentations to the firm’s Risk Management Committee, at which many members of the Company’s senior management are present. 31 Table of Contents The CEO meets regularly with the CIO to discuss cybersecurity threats and existing and potentially new technology systems including those related to cybersecurity.
We have processes to evaluate third party service providers and vendors that have access to sensitive systems and Company and customer data, which may include the use of cybersecurity questionnaires and due diligence procedures such as assessments of that service provider’s cybersecurity posture.
We have processes to evaluate third party service providers and vendors that have access to sensitive systems and Company and customer data, which does include the use of cybersecurity questionnaires and due diligence procedures such as assessments of that service provider’s cybersecurity posture.
Our processes include, but are not limited to, the following: • we engage third-party cybersecurity firms and tools to assist with network monitoring, endpoint protection, vulnerability assessments and penetration testing; • we engage cyber security consultants, auditors, and other third parties to assess and enhance our cybersecurity practices, such as to perform tabletop exercises and evaluate our cyber processes including an assessment of our incident response procedures.
Our processes include, but are not limited to, the following: • we engage third-party cybersecurity firms and tools to assist with network monitoring, endpoint protection, vulnerability assessments and penetration testing; • we engage cyber security consultants and auditors to perform tabletop exercises and evaluate our cyber processes including an assessment of our incident response procedures.
Board Oversight The Board of Directors, both directly and through the Audit Committee, oversees Management’s responsibility of ensuring proper functioning of our cybersecurity risk management program. In particular, the Audit Committee assists the Board in its oversight of management’s responsibility to assess, manage and mitigate cybersecurity risks.
Board Oversight The Board of Directors, both directly and through the Audit Committee, oversees management’s responsibility of ensuring proper functioning of our cybersecurity risk management program. In particular, the Audit Committee assists the Board in its oversight of management’s responsibility to assess, manage and mitigate cybersecurity risks. Recently the Audit Committee added a member with significant cybersecurity experience.
Our management is actively involved in the oversight of our cybersecurity risk management program, We have devoted significant financial and personnel resources to implement and maintain security measures to meet regulatory requirements and customer expectations. We have incorporated cybersecurity processes to assess, identify and manage risks from cybersecurity threats into our overall risk assessment process.
We have devoted significant financial and personnel resources to implement and maintain security measures to meet regulatory requirements and customer expectations. We have incorporated cybersecurity processes to assess, identify and manage risks from cybersecurity threats into our overall risk assessment process.
Management’s Role Management has implemented risk management structures, policies and procedures, and manages our risk exposure on a day-to-day basis. The Company has a dedicated cybersecurity organization within its technology department that focuses on current and emerging cybersecurity matters. The Company’s cybersecurity function is led by the Company’s CIO and the Company’s CISO, who reports to the Company’s CIO.
Management’s Role Management has implemented risk management structures, policies and procedures, and manages our risk exposure on a day-to-day basis. The Company has a dedicated cybersecurity organization within its technology department that focuses on current and emerging cybersecurity matters.
The Company maintains processes and systems with an aim to preventing any such attack from disrupting its services to clients as well as to prevent any loss of data concerning its clients, their financial affairs, as well as Company privileged information.
The Company maintains processes and systems with an aim to preventing any such attack from disrupting its services to clients as well as to prevent any loss of data concerning its clients, their financial affairs, as well as Company privileged information. Our management is actively involved in the oversight of our cybersecurity risk management program.
Added
The CISO and many members of his team have multiple decades of cybersecurity related experience.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeHelier, Isle of Jersey, Geneva, Switzerland, Lisbon, Portugal, Frankfurt, Germany, Tel Aviv, Israel and Hong Kong, China. Working arrangements for employees based outside of our corporate headquarters vary based on local regulations, including health regulations. Management is assessing its future real estate needs in light of the hybrid working environment, the existing footprint, and upcoming lease expirations.
Biggest changeHelier, Isle of Jersey, Geneva, Switzerland, Tel Aviv, Israel and Hong Kong, China. Working arrangements for employees based outside of our corporate headquarters vary based on local regulations, including health regulations. Management is assessing its future real estate needs in light of the hybrid working environment, the existing footprint, and upcoming lease expirations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeBeginning on or about August 31, 2021, Oppenheimer was named as a respondent in forty-eight arbitrations, many containing multiple claimants, each filed before FINRA, relating to those claimants’ purported investment in Horizon Private Equity, III, LLC (“Horizon”). Horizon is alleged to be a fraudulent scheme involving, among others, a former Oppenheimer employee, John Woods.
Biggest changeAccordingly, the Company's estimate will change from time to time, and actual losses may be more than the current estimate. Beginning on or about August 31, 2021, Oppenheimer was named as a respondent in numerous arbitrations, many containing multiple claimants, each filed before FINRA, relating to those claimants’ purported investment in Horizon Private Equity, III, LLC (“Horizon”).
On June 30, 2022, the Oppenheimer received a "Wells Notice" from the SEC requesting that Oppenheimer make a written submission to the SEC to explain why Oppenheimer should not be charged with violations of Section 15c2-12 of the Exchange Act, and Rule 15c2-12 thereunder as well as Municipal Securities Rulemaking Board Rules G-17 and G-27 in relation to its sales of municipal notes pursuant to an exemption from continuing disclosure contained in Rule 15c2-12.
On June 30, 2022, Oppenheimer received a "Wells Notice" from the SEC requesting that Oppenheimer make a written submission to the SEC to explain why Oppenheimer should not be charged with violations of Section 15c2-12 of the Exchange Act, and Rule 15c2-12 thereunder as well as Municipal Securities Rulemaking Board Rules G-17 and G-27 in relation to its sales of municipal notes pursuant to an exemption from continuing disclosure contained in Rule 15c2-12.
In addition, even where a loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is often not possible to reasonably estimate the size of the possible loss or range of loss or possible additional losses or range of additional losses. 33 Table of Contents For certain legal and regulatory proceedings, the Company cannot reasonably estimate such losses, particularly for proceedings that are in their early stages of development or where plaintiffs seek substantial, indeterminate or special damages.
In addition, even where a loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is often not possible to reasonably estimate the size of the possible loss or range of loss or possible additional losses or range of additional losses. 32 Table of Contents For certain legal and regulatory proceedings, the Company cannot reasonably estimate such losses, particularly for proceedings that are in their early stages of development or where plaintiffs seek substantial, indeterminate or special damages.
For legal and regulatory proceedings where there is at least a reasonable possibility that a loss or an additional loss may be incurred, the Company estimates a range of aggregate loss in excess of amounts accrued of up to $23 million.
For legal and regulatory proceedings where there is at least a reasonable possibility that a loss or an additional loss may be incurred, the Company estimates a range of aggregate loss in excess of amounts accrued of up to $12 million.
The SEC asked the Court to enter an order enjoining Oppenheimer from violating the above-referenced rules and requiring it to disgorge approximately $1.9 million plus interest. and pay a civil penalty. On January 30, 2024 Oppenheimer and the SEC reached an agreement in principle to settle the litigation pursuant to which Oppenheimer would pay a civil penalty of $1.2 million.
The SEC asked the Court to enter an order enjoining Oppenheimer from violating the above-referenced rules and requiring disgorgement and payment of a civil penalty. On January 30, 2024, Oppenheimer and the SEC reached an agreement in principle to settle the litigation pursuant to which Oppenheimer would pay a civil penalty of $1.2 million.
On September 13, 2022, the SEC filed a complaint against Oppenheimer in the United States District Court for the Southern District of New York (the “Court") alleging that Oppenheimer violated Section 15B(c)(1) of the Exchange Act and Rule 15c2-12 thereunder as well as Municipal Securities Rulemaking Board Rules G-17 and G-27 for not having fully complied with the exemption from the continuing disclosure obligations under Rule 15c2-12.
On September 13, 2022, the SEC filed a complaint against Oppenheimer in the United States District Court for the Southern District of New York (the “Court") alleging that Oppenheimer violated Section 15B(c)(1) of the Exchange Act and Rule 15c2-12 thereunder as well as Municipal Securities Rulemaking Board Rules.
John Woods left Oppenheimer’s employ in 2016 and Oppenheimer never received a complaint or question from any of the investors prior to the SEC bringing a complaint against Woods and his co-conspirators in 2021. Each investor who was an Oppenheimer client signed a document acknowledging that Horizon was not an approved Oppenheimer product.
Horizon is alleged to be a fraudulent scheme involving, among others, a former Oppenheimer employee, John Woods. John Woods left Oppenheimer’s employ in 2016 and Oppenheimer never received a complaint from any of the investors prior to the SEC bringing a complaint against Woods and his co-conspirators in 2021.
Removed
Accordingly, the Company's estimate will change from time to time, and actual losses may be more than the current estimate.
Added
Oppenheimer has settled or an award has been rendered and paid in all but one of the Horizon-related arbitrations. In addition, in June and August of 2023, Oppenheimer was served with two Horizon-related complaints in Georgia State Court, by plaintiffs, virtually all of whom were never Oppenheimer customers, alleging unspecified losses.
Removed
On November 18, 2022, Oppenheimer received an information request from the SEC requesting information related to the use of text messaging and similar forms of electronic communications by employees of Oppenheimer and whether those communications were properly retained by Oppenheimer as part of its records preservation requirements relating to the broker-dealer business activities of Oppenheimer.
Added
In 2024, each of those complaints was dismissed by the trial court. Plaintiffs in each case subsequently filed an appeal of the court’s order dismissing the cases, each of which is currently pending.
Removed
Subsequently, Oppenheimer received a similar information request from the Commodity Futures Trading Commission (“CFTC”). On January 4, 2024, Oppenheimer submitted an Offer of Settlement to the SEC. On February 9, 2024, the SEC issued an order (the “Order”) pursuant to which Oppenheimer will pay a fine in the amount of $12 million and agree to certain undertakings.
Removed
In addition to the Order Oppenheimer received a waiver of certain statutory disqualifications from the SEC. On February 7, 2024, Oppenheimer submitted an Offer of Settlement to the CFTC pursuant to which Oppenheimer offered to pay a fine of $1 million and agree to certain undertakings.
Removed
Over a protracted period of time, Woods made multiple false statements to Oppenheimer, to regulators and to a state court.
Removed
The claimants are seeking damages based on a number of legal theories, including, without limitation, violations of various state and federal statutes, breach of fiduciary duty, procurement of breach of fiduciary duty, negligent misrepresentation, aiding and abetting fraud, and unjust enrichment.
Removed
Claimants do not allege Oppenheimer received any of the funds invested in Horizon, but rather that Oppenheimer’s purported failure to properly supervise its employees allowed the alleged scheme to occur and continue. Oppenheimer has settled, or settled in principle, or an award has been rendered in forty-one of the Horizon-related arbitrations, with approximately one hundred thirty-eight individual complainants.
Removed
The aggregate payments for those forty-one arbitrations total approximately $87.7 million. The seven arbitrations still pending claim specific monetary damages and allege losses of approximately $7.9 million in the aggregate.
Removed
On June 16, 2023, Oppenheimer was served with a complaint in an action entitled John and Cynthia Kearney, John & Tera Sargent, Mike Hall, Individually and as Assignee of 6694 Dawson Blvd, LLC, Thomas and Beverly Crampton, Roy and Shirley Hill, Billy and Debra Lanter, Larry Lawson, Eugene Lyle, Scott Spence, and Dolores Willoughby v. Oppenheimer & Co.
Removed
Inc., Anne Greene and Gordon Morse, filed in Georgia State Court, Fulton County. Plaintiffs allege that they were all investors in Horizon. However, all of the plaintiffs allege that they invested in Horizon after John Woods left Oppenheimer’s employ in 2016 and virtually all of the plaintiffs were not Oppenheimer customers.
Removed
Plaintiffs further allege that Oppenheimer, through its inaction and/or misconduct, is responsible for their alleged losses and are seeking unspecified damages sounding in violations of the Georgia RICO statute and negligence per se. On September 5, 2023, Oppenheimer filed a motion to dismiss the complaint, which is pending before the court.
Removed
That same day, Oppenheimer also filed a motion to transfer the case to the Metro 34 Table of Contents Atlanta Business Case Division, which motion was granted. Oppenheimer believes these claims to be without merit and intends to defend itself vigorously against these claims.
Removed
Also, on July 17, 2023, Oppenheimer was served with a complaint in an action entitled Mark Del Pico, Elizabeth Del Pico and Surrey Lane Partners GP LLC, as general Partner of Surrey Lane Partners, Ltd. v. Oppenheimer & Co. Inc., and Michael Mooney , filed in Florida State Court, Sarasota County.
Removed
Plaintiffs allege that they were all investors in Horizon; however, none of the plaintiffs were Oppenheimer customers. All of the plaintiffs allege that they invested in Horizon years after John Woods left Oppenheimer’s employ in 2016.
Removed
Plaintiffs further allege that Oppenheimer, through its inaction and/or misconduct, is responsible for their alleged losses and are seeking unspecified damages from Oppenheimer sounding in negligence per se , aiding and abetting breach of fiduciary duty, and aiding and abetting fraud. On August 28, 2023, Oppenheimer filed a motion to dismiss the complaint.
Removed
Rather than respond to Oppenheimer’s motion to dismiss, on January 12, 2024, plaintiffs filed an amended complaint that includes an additional claim of fraud against Oppenheimer. On February 2, 2024, Oppenheimer filed a motion to dismiss the amended complaint which is pending before the court.
Removed
Oppenheimer believes these claims to be without merit and intends to defend itself vigorously against these claims.
Removed
Finally, on August 25, 2023, Oppenheimer was served with a complaint in an action entitled Lisa Wright, Billy Ray Boaz, Sylvia Boyles, Donald and Gina Bryant, Alton Graviette, Gilbert and Felicia Hawks, Michael and Brenda Craig, Barbara and Russell Danley, Carolyn and Ronald Edwards, Pamela Goins, Amy Gordon, Susan Gregory, Timothy Hall, Ronald Jones, Douglas Lineberry, Marcia Martin, Bobby and Jo Simpson, Karen Stephens, Caroline Moser, Rebecca Tapp, Paul Vaughan, Brenda and Varner Vogler, and Peggie Thomas v.
Removed
Oppenheimer & Co. Inc., Ann Greene and Gordon Morse , filed in Georgia State Court, Fulton County. Plaintiffs allege that they were all investors in Horizon. However, all of the plaintiffs allege that they invested in Horizon after John Woods left Oppenheimer’s employ in 2016 and virtually all of the plaintiffs were not Oppenheimer customers.
Removed
Plaintiffs further allege that Oppenheimer, through its inaction and/or misconduct, is responsible for their alleged losses and are seeking unspecified damages sounding in violations of the Georgia RICO statute and negligence per se. On September 15, 2023, Oppenheimer filed a motion to transfer the case to the Metro Atlanta Business Case Division, which motion was granted.
Removed
On October 31, 2023, Oppenheimer filed a motion to dismiss the complaint, which is pending before the court. Oppenheimer believes these claims to be without merit and intends to defend itself vigorously against these claims.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

11 edited+2 added−17 removed3 unchanged
Biggest change(b) The following table sets forth information about the stockholders of the Company as of March 1, 2024 as set forth in the records of the Company's transfer agent and registrar: Number of Shares Outstanding Number of Stockholders of Record Class A Stock 10,357,376 86 Class B Stock 99,665 32 (c) Share-Based Compensation Plans On February 26, 2014, the Company adopted the Oppenheimer Holdings Inc. 2014 Incentive Plan (the "OIP") pursuant to which the Compensation Committee of the Board of Directors of the Company grants options to purchase Class A Stock, restricted Class A Stock awards and Class A Stock awards to officers, directors and key employees of the Company and its subsidiaries.
Biggest change(b) The following table sets forth information about the stockholders of the Company as of February 27, 2025 as set forth in the records of the Company's transfer agent and registrar: Number of Shares Outstanding Number of Stockholders of Record Class A Stock 10,425,575 86 Class B Stock 99,665 32 (c) Share-Based Compensation Plans On February 26, 2014, the Company adopted the Oppenheimer Holdings Inc. 2014 Incentive Plan, which expired by its terms on February 26, 2024.
As of December 31, 2023, 223,699 shares remained available to be purchased under its share repurchase program. During the year ended December 31, 2022, the Company purchased and canceled an aggregate of 1,684,287 shares of Class A Stock for a total consideration of $60.6 million ($36.00 per share) under its share repurchase program.
During the year ended December 31, 2023, the Company purchased and canceled an aggregate of 1,684,287 shares of Class A Stock for a total consideration of $60.6 million ($36.00 per share) under its share repurchase program. As of December 31, 2023, 223,699 shares remained available to be purchased under the share repurchase program.
The Company paid cash dividends of $0.60 per share in 2022 to holders of Class A and Class B Stock for a total of $7.0 million.
The Company paid cash dividends of $0.60 per share in 2023 to holders of Class A and Class B Stock for a total of $6.5 million. The Company paid cash dividends of $0.60 per share in 2022 to holders of Class A and Class B Stock for a total of $7.0 million.
The Company does not presently contemplate listing the Class B Stock in the United States on any national or regional stock exchange or on NASDAQ. The Company paid cash dividends of $0.60 per share in 2023 to holders of Class A and Class B Stock for a total of $6.5 million.
The Company does not presently contemplate listing the Class B Stock in the United States on any national or regional stock exchange or on NASDAQ. The Company paid cash dividends of $0.66 per share in 2024 to holders of Class A and Class B Stock for a total of $6.8 million.
Any such share purchases will be made by the Company from time to time in the open market at the prevailing open market price using cash on hand, in compliance with the applicable rules and regulations of the New York Stock Exchange and federal and state securities laws and the terms of the Company's Notes.
Any such share purchases will be made by the Company from time to time in the open market at the prevailing open market price using cash on hand, in compliance with the applicable rules and regulations of the New York Stock Exchange and federal and state securities laws. All shares purchased will be canceled.
As of December 31, 2023, there were 1,591,861 shares of Class A Stock underlying outstanding options and restricted share awards. The Class A Stock underlying all vested options, if exercised, and restricted shares could be sold pursuant to Rule 144 or effective registration statements on Form S-8.
As of December 31, 2024, there were 1,434,968 shares of Class A Stock underlying outstanding restricted share awards. The Class A Stock underlying all vested restricted shares could be sold pursuant to Rule 144 or effective registration statements on Form S-8.
All shares purchased will be canceled. The share repurchase program is expected to continue indefinitely. The timing and amounts of any purchases will be based on market conditions and other factors including price, regulatory requirements, tax impact and capital availability.
The share repurchase program is expected to continue indefinitely. The timing and amounts of any purchases will be based on market conditions and other factors including price, regulatory requirements, tax impact and capital availability. The share repurchase program does not obligate the Company to repurchase any dollar amount or number of shares of Class A Stock.
The OIP expired by its terms on February 26, 2024. On March 1, 2024 the Board of Directors adopted the Company’s 2024 Incentive Plan which is subject to shareholder approval at the Annual Meeting of Stockholders on May 6, 2024. The Company's share-based compensation plans are described in note 17 to the consolidated financial statements appearing in Item 8.
The 2024 OIP received stockholder approval at the Annual Meeting of Stockholders on May 6, 2024. The Company's share-based compensation plans are described in note 17 to the consolidated financial statements appearing in Item 8.
(d) Share Performance Graph The following graph shows changes over the past five year period of U.S. $100 invested in (1) the Company's Class A Stock, (2) the Standard & Poor's 500 Index (S&P 500), and (3) the Standard & Poor's 500 Diversified Financial Index (S&P 500 / Diversified Financials – S5DIVF): 36 Table of Contents As of December 31, 2018 2019 2020 2021 2022 2023 Oppenheimer Class A Stock 100 109 129 188 168 164 S&P 500 100 129 150 190 153 190 S&P 500 / Diversified Financials 100 123 135 181 158 180 Stock Buy-Back and Repurchase of Senior Secured Notes On February 28, 2022, the Company announced that its Board of Directors approved a share repurchase program that authorizes the Company to purchase up to 518,000 shares of the Company's Class A Stock, representing approximately 4.2% of its 12,322,073 then issued and outstanding shares of Class A Stock.
(d) Share Performance Graph The following graph shows cumulative total stockholder return over the past five year period of U.S. $100 invested in (1) the Company's Class A Stock, (2) the Standard & Poor's 500 Index (S&P 500), and (3) the Standard & Poor's 500 Diversified Financial Index (S&P 500 / Diversified Financials – S5DIVF): 34 Table of Contents As of December 31, 2019 2020 2021 2022 2023 2024 Oppenheimer Class A Stock 100 120 174 156 153 238 S&P 500 100 116 148 119 148 183 S&P 500 / Diversified Financials 100 110 147 129 147 187 Stock Buy-Back On March 1, 2024, the Company's Board of Directors approved a share repurchase program that authorizes the Company to purchase up to 518,000 shares of the Company's Class A Stock, representing approximately 5.0% of its 10,357,376 then issued and outstanding shares of Class A Stock.
The share repurchase program does not obligate the Company to repurchase any dollar amount or number of shares of Class A Stock. Depending on market conditions and other factors, these repurchases may be commenced or suspended from time to time without prior notice.
Depending on market conditions and other factors, these repurchases may be commenced or suspended from time to time without prior notice. There were no purchases of shares of Class A Stock during the fourth quarter of 2024.
As a result, the Company had 10,447,392 shares outstanding on July 6, 2023 after the purchase. 37 Table of Contents During the year ended December 31, 2023, the Company purchased and canceled an aggregate of 463,335 shares of Class A Stock for a total consideration of $17.6 million ($38.07 per share) under its share repurchase program.
During the year ended December 31, 2024, the Company purchased and canceled an aggregate of 243,806 shares of Class A Stock for a total consideration of $9.6 million ($39.39 per share) under its share repurchase program. As of December 31, 2024, 497,893 shares remained available to be purchased under its share repurchase program.
Removed
The Company paid cash dividends of $1.54 per share in 2021 to holders of Class A and Class B Stock, including a special dividend of $1.00 per share paid on December 31, 2021, for a total of $19.4 million.
Added
On March 1, 2024, the Company adopted the Oppenheimer Holdings Inc. 2024 Incentive Plan (the "2024 OIP") pursuant to which the Compensation Committee of the Board of Directors of the Company may grant options to purchase Class A Stock, restricted Class A Stock awards and Class A Stock awards to officers, directors and key employees of the Company and its subsidiaries.
Removed
This authorization supplemented the 12,407 shares that remained authorized and available under the Company's previous share repurchase program for a total of 530,407 shares authorized and available for repurchase at February 28, 2022.
Added
For additional information on the Company’s share repurchase program, see Note 12 to the Consolidated Financial Statements.
Removed
On May 24, 2022, the Company announced that its Board of Directors approved a share repurchase program that authorizes the Company to purchase up to 550,000 shares of the Company's Class A Stock, representing approximately 4.6% of its 11,863,559 then issued and outstanding shares of Class A Stock.
Removed
This authorization supplemented the 71,893 shares that remained authorized and available under the Company's previous share repurchase program for a total of 621,893 shares authorized and available for repurchase at May 24, 2022.
Removed
On July 29, 2022, the Company's Board of Directors approved a share repurchase program that authorizes the Company to purchase up to 536,500 shares of the Company's Class A Stock, representing approximately 4.8% of its 11,251,930 then issued and outstanding shares of Class A Stock.
Removed
This authorization supplemented the 4,278 shares that remained authorized and available under the Company's previous share repurchase program for a total of 540,778 shares authorized.
Removed
On December 13, 2022, the Company's Board of Directors approved a share repurchase program that authorizes the Company to purchase up to 543,000 shares of the Company's Class A Stock, representing approximately 5.0% of its 10,867,660 then issued and outstanding shares of Class A Stock.
Removed
This authorization supplemented the 144,034 shares that remained authorized and available under the Company's previous share repurchase program for a total of 223,699 shares authorized.
Removed
On May 31, 2023, the Company announced the commencement of a modified “Dutch Auction” tender offer to purchase up to $30.0 million of its Class A Stock at a price not less than $34.00 per share or more than $40.00 per share.
Removed
The Company completed its repurchases pursuant to the tender offer on July 6, 2023, when it successfully repurchased and cancelled 437,183 shares of Class A Stock at $40.00 per share for an aggregate purchase price of $17.49 million.
Removed
As of December 31, 2022, 687,034 shares remained available to be purchased under the share repurchase program.
Removed
One purpose of the tender offer, among others, was to assure that sufficient liquidity existed for our stockholder that might have been required to sell shares of Class A Stock when the shares were removed from the Russell 2000 and 3000 indices at the end of June 2023.
Removed
On March 1, 2024, the Company's Board of Directors approved a share repurchase program that authorizes the Company to purchase up to 518,000 shares of the Company's Class A Stock, representing approximately 5.0% of its 10,357,376 then issued and outstanding shares of Class A Stock.
Removed
During the fourth quarter of 2023, the Company issued 791 shares of Class A Stock pursuant to the Company's share-based compensation plans to employees of the Company for no cash consideration. Such issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).
Removed
The following table provides information regarding purchases of shares of Class A Stock during the fourth quarter of 2023: (a) (b) (c) (d) Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Maximum number of shares that may yet be purchased under the plans or programs (1) October 1 - 31, 2023 13,809 $38.18 13,809 313,131 November 1 - 30, 2023 85,739 $37.42 85,739 227,392 December 1 - 31, 2023 3,693 $39.85 3,693 223,699 Q4 2023 Total 103,241 $37.61 103,241 223,699 (1) None of the foregoing authorizations is subject to expiration.
Removed
In addition, the Company has repurchased and may continue to seek to repurchase its outstanding 5.50% Senior Secured Notes due 2025 (the “Senior Secured Notes”) from time to time through, as applicable, tender offers, open market purchases, privately negotiated transactions or otherwise.
Removed
Such repurchases, if any, will depend on a number of factors, including, but not limited to, the Company’s priorities for the use of cash, price, market and economic conditions, its liquidity requirements, and legal and contractual restrictions. During 2023, the Company repurchased and cancelled $1.0 million aggregate principal amount of its Senior Secured Notes in the open market.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

61 edited+35 added−50 removed38 unchanged
Biggest changeRESULTS OF OPERATIONS The following table and discussion summarizes the changes in the major revenue and expense categories for the past three years: (Expressed in thousands ) For the Years Ended December 31, For the Years Ended December 31, 2023 2022 % Change 2022 2021 % Change REVENUE Commissions $ 349,248 $ 370,382 (5.7) $ 370,382 $ 401,607 (7.8) Advisory fees 415,679 425,615 (2.3) 425,615 451,197 (5.7) Investment banking 117,665 127,529 (7.7) 127,529 435,870 (70.7) Bank deposit sweep income 172,807 104,558 65.3 104,558 15,557 572.1 Interest 104,550 60,713 72.2 60,713 36,482 66.4 Principal transactions, net 65,347 21,031 210.7 21,031 23,984 (12.3) Other 23,529 1,113 2,014.0 1,113 29,338 (96.2) Total revenue 1,248,825 1,110,941 12.4 1,110,941 1,394,035 (20.3) EXPENSES Compensation and related expenses 782,396 740,827 5.6 740,827 886,840 (16.5) Communications and technology 91,321 85,474 6.8 85,474 80,520 6.2 Occupancy and equipment costs 66,002 59,897 10.2 59,897 60,069 (0.3) Clearing and exchange fees 24,928 25,566 (2.5) 25,566 22,306 14.6 Interest 68,599 23,846 187.7 23,846 9,855 142.0 Other 168,809 129,777 30.1 129,777 109,804 18.2 Total expenses 1,202,055 1,065,387 12.8 1,065,387 1,169,394 (8.9) Pre-tax income 46,770 45,554 2.7 45,554 224,641 (79.7) Income tax provision 16,498 13,444 22.7 13,444 65,677 (79.5) Net Income $ 30,272 $ 32,110 (5.7) $ 32,110 $ 158,964 (79.8) Net income (loss) attributable to non-controlling interest, net of tax 93 (241) * (241) — * Net income attributable to Oppenheimer Holdings Inc. $ 30,179 $ 32,351 (6.7) $ 32,351 $ 158,964 (79.6) *Percentage not meaningful Fiscal 2023 compared to Fiscal 2022 Revenue • Commission revenue was $349.2 million for the year ended December 31, 2023, a decrease of 5.7% compared with $370.4 million for the year ended December 31, 2022 due to decreased client activity in listed securities, OTC products and options, partially offset by higher commission income on annuities. • Advisory fees were $415.7 million for the year ended December 31, 2023, a decrease of 2.3% compared with $425.6 million for the year ended December 31, 2022 due to lower management fees from advisory programs attributable to reduced billable AUM levels and lower incentive fees from alternative investments during the year. 41 Table of Contents • Investment banking revenue was $117.7 million for the year ended December 31, 2023, a decrease of 7.7% compared with $127.5 million for the year ended December 31, 2022 driven by an industry-wide slowdown in M&A transactions and lower levels of fixed income capital issuances, partially offset by higher equity underwriting fees. • Bank deposit sweep income was $172.8 million for the year ended December 31, 2023, an increase of 65.3% compared with $104.6 million for the year ended December 31, 2022 due to higher short-term interest rates, partially offset by lower cash sweep balances. • Interest revenue was $104.6 million for the year ended December 31, 2023, an increase of 72.2% compared with $60.7 million for the year ended December 31, 2022 due to higher short-term interest rates, which drove record full year margin interest income. • Principal transactions revenue was $65.3 million for the year ended December 31, 2023, an increase of 210.7% compared with $21.0 million for the year ended December 31, 2022 primarily due to higher fixed income trading volumes. • Other revenue was $23.5 million for the year ended December 31, 2023, a significant increase compared to $1.1 million for the year ended December 31, 2022 primarily due to increases in the cash surrender value of Company-owned life insurance during 2023, which fluctuates based on changes in fair value of the policies' underlying investments.
Biggest changeRESULTS OF OPERATIONS The following table and discussion summarizes the changes in the major revenue and expense categories for the past three years: (Expressed in thousands ) For the Years Ended December 31, For the Years Ended December 31, 2024 2023 % Change 2023 2022 % Change REVENUE Commissions $ 409,710 $ 349,248 17.3 $ 349,248 $ 370,382 (5.7) Advisory fees 483,433 415,679 16.3 415,679 425,615 (2.3) Investment banking 176,447 117,665 50.0 117,665 127,529 (7.7) Bank deposit sweep income 138,770 172,807 (19.7) 172,807 104,558 65.3 Interest 135,537 104,550 29.6 104,550 60,713 72.2 Principal transactions, net 54,684 65,347 (16.3) 65,347 21,031 210.7 Other 33,915 23,529 44.1 23,529 1,113 2,014.0 Total revenue 1,432,496 1,248,825 14.7 1,248,825 1,110,941 12.4 EXPENSES Compensation and related expenses 936,814 782,396 19.7 782,396 740,827 5.6 Communications and technology 99,361 91,321 8.8 91,321 85,474 6.8 Occupancy and equipment costs 63,852 66,002 (3.3) 66,002 59,897 10.2 Clearing and exchange fees 27,641 24,928 10.9 24,928 25,566 (2.5) Interest 87,991 68,599 28.3 68,599 23,846 187.7 Other 111,080 168,809 (34.2) 168,809 129,777 30.1 Total expenses 1,326,739 1,202,055 10.4 1,202,055 1,065,387 12.8 Pre-tax income 105,757 46,770 126.1 46,770 45,554 2.7 Income tax provision 34,510 16,498 109.2 16,498 13,444 22.7 Net Income $ 71,247 $ 30,272 135.4 $ 30,272 $ 32,110 (5.7) Net income (loss) attributable to non-controlling interest, net of tax (310) 93 * 93 (241) * Net income attributable to Oppenheimer Holdings Inc. $ 71,557 $ 30,179 137.1 $ 30,179 $ 32,351 (6.7) *Percentage not meaningful 38 Table of Contents Fiscal 2024 compared to Fiscal 2023 Revenue • Commission revenue was $409.7 million for the year ended December 31, 2024, an increase of 17.3% compared with $349.2 million for the year ended December 31, 2023 due to higher overall client activity. • Advisory fees were $483.4 million for the year ended December 31, 2024, an increase of 16.3% compared with $415.7 million for the year ended December 31, 2023 due to higher management fees from advisory programs attributable to record billable AUM levels. • Investment banking revenue was $176.4 million for the year ended December 31, 2024, an increase of 50.0% compared with $117.7 million for the year ended December 31, 2023 due to higher transaction and new issuance volumes. • Bank deposit sweep income was $138.8 million for the year ended December 31, 2024, a decrease of 19.7% compared with $172.8 million for the year ended December 31, 2023 due to lower cash sweep balances and lower short-term interest rates. • Interest revenue was $135.5 million for the year ended December 31, 2024, an increase of 29.6% compared with $104.6 million for the year ended December 31, 2023 primarily due to higher average margin loan balances and security inventories. • Principal transactions revenue was $54.7 million for the year ended December 31, 2024, a decrease of 16.3% compared with $65.3 million for the year ended December 31, 2023 primarily due to lower realized and unrealized gains from government securities trading activities. • Other revenue was $33.9 million for the year ended December 31, 2024, an increase of 44.1% compared to $23.5 million for the year ended December 31, 2023 primarily due to higher death benefit proceeds.
We record uncertain tax positions in accordance with ASC 740, "Income Taxes", on the basis of a two-step process whereby we determined whether it is more-likely-than-not that the tax positions will be sustained on the basis of the technical merits of the position and, for those tax positions that meet the more-likely-than-not recognition threshold, we will recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
We record uncertain tax positions in accordance with ASC 740, "Income Taxes", on the basis of a two-step process whereby we determine whether it is more-likely-than-not that the tax positions will be sustained on the basis of the technical merits of the position and, for those tax positions that meet the more-likely-than-not recognition threshold, we will recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
In the event that existing financial resources do not satisfy our liquidity needs, we may have to seek additional external financing. The availability of such additional external financing may depend on market factors outside our control. We have Company-owned life insurance policies which are utilized to fund certain non-qualified deferred compensation plans.
In the event that existing financial resources do not satisfy our liquidity needs, we may have to seek additional external financing. The availability of such additional external financing may depend on market factors outside our control. We have Corporate-owned life insurance policies which are utilized to fund certain non-qualified deferred compensation plans.
The assumptions we used to determine the estimates of reserves may be incorrect and the actual disposition of a legal or regulatory proceeding could be greater or less than the reserve amount. 48 Table of Contents Income Taxes Critical estimates – We are subject to the income tax laws of the U.S., its states, and the municipalities in which we operate.
The assumptions we used to determine the estimates of reserves may be incorrect and the actual disposition of a legal or regulatory proceeding could be greater or less than the reserve amount. 44 Table of Contents Income Taxes Critical estimates – We are subject to the income tax laws of the U.S., its states, and the municipalities in which we operate.
For a discussion of our results of operations and liquidity and capital resources for the year ended December 31, 2021, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
For a discussion of our results of operations and liquidity and capital resources for the year ended December 31, 2022, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The purpose of this section is to discuss and analyze our consolidated financial condition, liquidity and capital resources and results of operations for the years ended December 31, 2023 and 2022.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The purpose of this section is to discuss and analyze our consolidated financial condition, liquidity and capital resources and results of operations for the years ended December 31, 2024 and 2023.
The amount of Oppenheimer's bank borrowings fluctuates in response to changes in the level of the Company's securities inventories and customer margin debt, changes in notes receivable from employees, investment in furniture, equipment and leasehold improvements, changes in stock loan balances and financing through repurchase agreements.
The amount of Oppenheimer's bank borrowings fluctuates in response to changes in the level of the Company's securities inventories and customer margin debt, changes in notes receivable from employees, investment in furniture, equipment and leasehold improvements, changes in stock loan balances and financing through 45 Table of Contents repurchase agreements.
Certain of those policies are considered to be particularly 47 Table of Contents important to the presentation of the Company's financial results because they require management to make difficult, complex or subjective judgments, often as a result of matters that are inherently uncertain.
Certain of those policies are considered to be particularly important to the presentation of the Company's financial results because they require management to make difficult, complex or subjective judgments, often as a result of matters that are inherently uncertain.
The following is a discussion of these estimates: Fair Value Measurements Critical estimates - The accounting guidance for the fair value measurement (ASC 820) of financial assets defines fair value, establishes a framework for measuring fair value, establishes a fair value measurement hierarchy, and expands fair value measurement disclosures.
The following is a discussion of these estimates: 43 Table of Contents Fair Value Measurements Critical estimates - The accounting guidance for the fair value measurement (ASC 820) of financial assets defines fair value, establishes a framework for measuring fair value, establishes a fair value measurement hierarchy, and expands fair value measurement disclosures.
In addition, the Company may from time to time make minority private investments out of excess capital in allied or unrelated businesses with the goal of either syndicating the investment to eligible clients or retaining ownership because we believe them to be an attractive investment.
In addition, the Company may from time to time make an acquisition of 100% of a business or make minority private investments out of excess capital in allied or unrelated businesses with the goal of either syndicating the investment to eligible clients or retaining ownership because we believe them to be an attractive investment.
Its principal subsidiaries are Oppenheimer & Co. Inc. ("Oppenheimer") and Oppenheimer Asset Management Inc. ("OAM"). As of December 31, 2023, we provided our services from 90 offices in 25 states located throughout the United States, offices in Puerto Rico, Tel Aviv, Israel, Hong Kong, China, London, England, St. Helier, Isle of Jersey, Portugal and Geneva, Switzerland.
Its principal subsidiaries are Oppenheimer & Co. Inc. ("Oppenheimer") and Oppenheimer Asset Management Inc. ("OAM"). As of December 31, 2024, we provided our services from 88 offices in 25 states located throughout the United States, offices in Puerto Rico, Tel Aviv, Israel, Hong Kong, China, London, England, St. Helier, Isle of Jersey and Geneva, Switzerland.
Outlook We are focused on growing our private client and asset management businesses through strategic additions of experienced financial advisors in our existing branch system and employment of experienced money management personnel in our asset management business as well as deploying our capital for expansion through targeted acquisitions.
Outlook We are focused on growing our wealth management business through strategic additions of experienced financial advisors in our existing branch system and employment of experienced money management personnel in our asset management business as well as deploying our capital for expansion through targeted acquisitions.
AUM includes the total market value of client investments in discretionary and non-discretionary advisory programs and as well as the net asset value of private placement of alternative investments offered by and held by clients of the firm. Client assets under administration ("CAUA") as of December 31, 2023 totaled $118.2 billion.
AUM includes the total market value of client investments in discretionary and non-discretionary advisory programs and as well as the net asset value of private placement of alternative investments offered by and held by clients of the firm. Client assets under administration ("CAUA") as of December 31, 2024 totaled $129.5 billion.
The Company provides investment advisory services through OAM and Oppenheimer Investment Management LLC ("OIM") and Oppenheimer's financial advisor directed programs. At December 31, 2023, client assets under management ("AUM") totaled $43.9 billion.
The Company provides investment advisory services through OAM and Oppenheimer Investment Management LLC ("OIM") and Oppenheimer's financial advisor directed programs. At December 31, 2024, client assets under management ("AUM") totaled $49.4 billion.
At December 31, 2023 and December 31, 2022, the Company had no such borrowings outstanding. The Company also has some availability of short-term bank financing on an unsecured basis. The Company's overseas subsidiaries, Oppenheimer Europe Ltd. and Oppenheimer Investments Asia Limited, are subject to local regulatory capital requirements that restrict our ability to utilize their capital for other purposes.
At December 31, 2024, the Company had a $252.1 million outstanding bank loan balance. The Company also has some availability of short-term bank financing on an unsecured basis. The Company's overseas subsidiaries, Oppenheimer Europe Ltd. and Oppenheimer Investments Asia Limited, are subject to local regulatory capital requirements that restrict our ability to utilize their capital for other purposes.
The Company satisfies its need for short-term financing from internally generated funds and collateralized and uncollateralized borrowings, consisting primarily of bank call loans, stock loans, and uncommitted lines of credit. We finance our trading in government securities through the use of securities sold under agreements to repurchase ("repurchase agreements").
The Company satisfies its need for financing from internally generated funds and collateralized and uncollateralized borrowings, consisting primarily of bank call loans, stock loans, and uncommitted lines of credit. We finance our trading in government securities through the use of securities sold under agreements to repurchase ("repurchase agreements"). Oppenheimer has uncommitted arrangements with banks for borrowings on a fully-collateralized basis.
Forward-looking statements are not guarantees and involve risks, uncertainties and assumptions. The Company cautions readers that a variety of factors could cause the Company’s actual results to differ materially from the anticipated results or other expectations expressed in the Company’s forward-looking statements.
The Company cautions readers that a variety of factors could cause the Company’s actual results to differ materially from the anticipated results or other expectations expressed in the Company’s forward-looking statements.
Certain policies which could provide additional liquidity if needed had a cash surrender value of $86.5 million as of December 31, 2023.
Certain policies which could provide additional liquidity if needed had a cash surrender value of $98.8 million as of December 31, 2024.
The average daily balance of reverse repurchase agreements and repurchase agreements on a gross basis for the year ended December 31, 2023 was $107.6 million and $547.1 million, respectively ($172.4 million and $356.6 million, respectively, for the year ended December 31, 2022).
The average daily balance of reverse repurchase agreements and repurchase agreements on a gross basis for the year ended December 31, 2024 was $322.0 million and $1,179.70 million, respectively ($107.6 million and $547.1 million, respectively, for the year ended December 31, 2023).
Valuation is based on collateral requirements for a series of contracts representing the investment strategy. 46 Table of Contents Capital Markets Capital Markets reported revenue of $345.9 million for the year ended December 31, 2023, 2.4% higher compared with the prior year. Pre-tax loss was $63.0 million compared with a pre-tax loss of $25.7 million for the prior year.
Valuation is based on collateral requirements for a series of contracts representing the investment strategy. 42 Table of Contents Capital Markets Capital Markets reported revenue of $447.6 million for the year ended December 31, 2024, 29.4% higher compared with the prior year. Pre-tax loss was $39.6 million compared with a pre-tax loss of $63.0 million for the prior year.
The largest amount of reverse repurchase agreements and repurchase agreements outstanding on a gross basis during the year ended December 31, 2023 was $506.4 million and $806.9 million, respectively ($663.9 million and $668.3 million, respectively, for the year ended December 31, 2022).
The largest amount of reverse repurchase agreements and repurchase agreements outstanding on a gross basis during the year ended December 31, 2024 was $671.2 million and $1,118.0 million, respectively ($506.4 million and $806.9 million, respectively, for the year ended December 31, 2023).
We finance our government trading operations through the use of securities purchased under agreements to resell ("reverse repurchase agreements") and repurchase agreements. Except as described below, repurchase and reverse repurchase agreements, principally involving government and agency securities, are carried at amounts at which securities subsequently will be resold or reacquired as specified in the respective agreements and include accrued interest.
Except as described below, repurchase and reverse repurchase agreements, principally involving government and agency securities, are carried at amounts at which securities subsequently will be resold or reacquired as specified in the respective agreements and include accrued interest.
The regulatory capital requirements for Oppenheimer Europe Ltd. and Oppenheimer Investments Asia Limited were $5.4 million and $384,120, 49 Table of Contents respectively, at December 31, 2023. The liquid assets at Oppenheimer Europe Ltd. are primarily comprised of cash deposits in bank accounts. The liquid assets at Oppenheimer Investments Asia Limited are primarily comprised of investments in U.S.
The regulatory capital requirements for Oppenheimer Europe Ltd. and Oppenheimer Investments Asia Limited were $6.1 million and $386,200, respectively, at December 31, 2024. The liquid assets at Oppenheimer Europe Ltd. are primarily comprised of cash deposits in bank accounts. The liquid assets at Oppenheimer Investments Asia Limited are primarily comprised of investments in U.S.
(4) Private equity funds represent private equity fund of funds including portfolios focused on natural resources and related assets. (5) The portfolio enhancement program sells uncovered, far out-of-money puts and calls on the S&P 500 Index. The program is market neutral and uncorrelated to the index.
(4) Private equity funds include portfolios focused on technology, infrastructure, real estate, natural resources and specific co- investment opportunities. (5) The portfolio enhancement program sells uncovered, far out-of-the-money puts and calls on the S&P 500 Index. The program is market neutral and uncorrelated to the index.
While increases in interest rates will increase fees the Company earns from FDIC insured deposits of clients through a program offered by the Company, such increases may be offset to an extent if the cash sweep balances continue to decrease as clients seek higher-yielding investments.
While decreases in interest rates will lower fees the Company earns from FDIC-insured deposits of clients through a program offered by the Company, such decreases may be offset to a degree if the cash sweep balances increase as clients find fewer higher-yielding alternatives to deploy these balances.
Repurchase and reverse repurchase agreements are presented on a net-by-counterparty basis, when the repurchase and reverse repurchase agreements are executed with the same counterparty, have the same explicit settlement date, are executed in accordance with a master netting arrangement, the securities underlying the repurchase and reverse repurchase agreements exist in "book entry" form and certain other requirements are met. 51 Table of Contents At December 31, 2023, the gross balances of reverse repurchase agreements and repurchase agreements were $8.9 million and $643.4 million, respectively.
Repurchase and reverse repurchase agreements are presented on a net-by-counterparty basis, when the repurchase and reverse repurchase agreements are executed with the same counterparty, have the same explicit settlement date, are executed in accordance with a master netting arrangement, the securities underlying the repurchase and reverse repurchase agreements exist in "book entry" form and certain other requirements are met.
We are also focused on opportunities in our capital markets businesses where we can employ experienced personnel and/or small units that will improve our ability to attract institutional clients in both equities and fixed income without significantly raising our risk profile.
We are also focused on opportunities in our capital market businesses, including integrating new technology platforms to expand the suite of services offered to our clients and onboarding experienced personnel and/or small units that will improve our ability to attract institutional clients in both equities and fixed income without significantly raising our risk profile.
Our reviews have resulted in plans that we believe would result in a reduction of assets through liquidation that would significantly reduce the Company's need for external financing. Our primary long-term cash requirements include $113.1 million principal outstanding as of December 31, 2023 under our Notes (due in 2025) and $183.3 million of operating lease obligations.
Our reviews have resulted in a contingency funding plan that we believe would result in a reduction of assets through liquidation that would significantly reduce the Company's need for external financing. Our primary long-term cash requirements include $173.3 million of operating lease obligations.
Impact if actual results differ from assumptions – We established an independent valuation process to evaluate and approve the valuation of our financial instruments. For financial instruments that are classified in Level 3, we review the appropriateness of the unobservable inputs to ensure consistency with how a market participant would arrive at the unobservable input.
For financial instruments that are classified in Level 3, we review the appropriateness of the unobservable inputs to ensure consistency with how a market participant would arrive at the unobservable input.
As of December 31, 2023, all of our active regulated domestic and international subsidiaries had net capital in excess of minimum requirements. See “Business – Regulatory - Regulatory Capital Requirements” in Part I, Item 1 and note 19 of the Notes to Consolidated Financial Statements in Item 8 for further information on regulatory capital requirements.
See “Business – Regulatory - Regulatory Capital Requirements” in Part I, Item 1 and note 19 of the Notes to Consolidated Financial Statements in Item 8 for further information on regulatory capital requirements.
(2) Institutional fixed income provides solutions to institutional investors including: Taft-Hartley Funds, Public Pension Funds, Corporate Pension Funds, and Foundations and Endowments. (3) Hedge funds represent single manager hedge fund strategies in areas including hedged equity, technology and financial services, and multi-manager and multi-strategy fund of funds.
(2) Institutional fixed income provides solutions to institutional investors including: Taft-Hartley Funds, Public Pension Funds, Corporate Pension Funds, and Foundations and Endowments. (3) Hedge funds represent investments in strategies including long/short equity, global macro, event driven, merger arbitrage, multi-strategy and credit. They may be single manager or fund of funds.
These rate increases will also increase the rates the Company charges on margin balances which have a positive impact on our earnings. 2023 Israel-Hamas War On October 7, 2023, Hamas initiated an unprovoked invasion of Israel from the Gaza Strip, resulting in thousands of casualties.
Future rate decreases will also reduce the rates the Company charges on customer margin loans and earns on other interest-sensitive assets, which will have a negative impact on our earnings. Israel-Hamas War and Conflict with Hezbollah and Iran On October 7, 2023, Hamas initiated an unprovoked invasion of Israel from the Gaza Strip, resulting in thousands of casualties.
Fiscal 2022 compared to Fiscal 2021 Revenue • Commission revenue was $370.4 million for the year ended December 31, 2022, a decrease of 7.8% compared with $401.6 million for the year ended December 31, 2021 due to decreased client activity in mutual funds, listed securities, OTC products and annuities, partially offset by higher commission income on municipal bonds. • Advisory fees were $425.6 million for the year ended December 31, 2022, a decrease of 5.7% compared with $451.2 million for the year ended December 31, 2021 due to the reduced valuations of assets under management. • Investment banking revenue was $127.5 million for the year ended December 31, 2022, a decrease of 70.7% compared with $435.9 million for the year ended December 31, 2021 driven by an industry-wide decrease in M&A transactions, and significantly lower levels of capital issuances in the equity markets, particularly in the healthcare and technology sectors. • Bank deposit sweep income was $104.6 million for the year ended December 31, 2022, an increase of 572.1% compared with $15.6 million for the year ended December 31, 2021 due to significantly higher short-term interest rates. • Interest revenue was $60.7 million for the year ended December 31, 2022, an increase of 66.4% compared with $36.5 million in 2021 due to higher average margin balances and higher short-term interest rates. 42 Table of Contents • Principal transactions revenue was $21.0 million for the year ended December 31, 2022, a decrease of 12.3% compared with $24.0 million for the year ended December 31, 2021 driven by lower income from investment grade, high yield, Emerging Markets, and municipal bonds partially offset by higher income from U.S. government securities. • Other revenue was $1.1 million for the year ended December 31, 2022, a decrease of 96.2% compared to $29.3 million for the year ended December 31, 2021 primarily due to a decrease in the cash surrender value of Company-owned life insurance during 2022, which fluctuates based on changes in fair value of the policies' underlying investments.
Fiscal 2023 compared to Fiscal 2022 Revenue • Commission revenue was $349.2 million for the year ended December 31, 2023, a decrease of 5.7% compared with $370.4 million for the year ended December 31, 2022 due to decreased client activity in listed securities, OTC products and options, partially offset by higher commission income on annuities. • Advisory fees were $415.7 million for the year ended December 31, 2023, a decrease of 2.3% compared with $425.6 million for the year ended December 31, 2022 due to lower management fees from advisory programs attributable to reduced billable AUM levels and lower incentive fees from alternative investments during the year. 39 Table of Contents • Investment banking revenue was $117.7 million for the year ended December 31, 2023, a decrease of 7.7% compared with $127.5 million for the year ended December 31, 2022 driven by an industry-wide slowdown in M&A transactions and lower levels of fixed income capital issuances, partially offset by higher equity underwriting fees. • Bank deposit sweep income was $172.8 million for the year ended December 31, 2023, an increase of 65.3% compared with $104.6 million for the year ended December 31, 2022 due to higher short-term interest rates, partially offset by lower cash sweep balances. • Interest revenue was $104.6 million for the year ended December 31, 2023, an increase of 72.2% compared with $60.7 million for the year ended December 31, 2022 due to higher short-term interest rates, which drove record full year margin interest income. • Principal transactions revenue was $65.3 million for the year ended December 31, 2023, an increase of 210.7% compared with $21.0 million for the year ended December 31, 2022 primarily due to higher fixed income trading volumes. • Other revenue was $23.5 million for the year ended December 31, 2023, a significant increase compared to $1.1 million for the year ended December 31, 2022 primarily due to increases in the cash surrender value of Corporate-owned life insurance during 2023, which fluctuates based on changes in fair value of the policies' underlying investments.
CAUA includes AUM and the other assets for which the firm provides services. We also provide trust services and products through Oppenheimer Trust Company of Delaware and discount brokerage services through Freedom Investments, Inc. ("Freedom"). Through OPY Credit Corp., we conduct secondary trading activities related to the purchase and sale of loans, primarily on a riskless principal basis.
CAUA includes AUM and the other assets for which the firm provides services. We also provide trust services and products through Oppenheimer Trust Company of Delaware Inc. and discount brokerage services through Freedom Investments, Inc. ("Freedom").
Equally important is the search for viable acquisition candidates. Our long-term intention is to pursue growth by acquisition where we can find a comfortable match in terms of corporate goals and personnel at a price that would provide our shareholders with incremental value.
Our long-term intention is to pursue growth by acquisition where we can find a comfortable match in terms of corporate goals and personnel at a price that would provide our stockholders with incremental value. We review potential acquisition opportunities from time to time with the aim of fulfilling the Company's strategic goals, while evaluating and managing our existing businesses.
These forward-looking statements may relate to such matters as anticipated financial performance, future revenues, earnings, liabilities or expenses, liquidity and cash flows, business prospects, strategic objectives, projected ventures, new products, anticipated market performance, and similar matters. Words such as “believes,” “expects,” “anticipates,” “estimates,” “will,” “may,” “could,” “should” and “would” are intended to identify forward-looking statements.
These forward-looking statements may relate to such matters as anticipated financial performance, future revenues, earnings, liabilities or expenses, business prospects, projected ventures, new products, anticipated market performance, and similar matters.
Funding Risk (Expressed in thousands) For the Years Ended December 31, 2023 2022 Cash provided by/(used in) operating activities $ (18,810) $ 64,492 Cash used in investing activities (15,561) (14,137) Cash used in financing activities (74,761) (253,912) Net decrease in cash and cash equivalents and restricted cash $ (109,132) $ (203,557) Management believes that funds from operations, combined with our capital base and available credit facilities, are sufficient for our liquidity needs in the foreseeable future.
The total cash requirement for operating lease obligations is estimated to be approximately $11.8 million for the 2025 year. 47 Table of Contents Funding Risk (Expressed in thousands) For the Years Ended December 31, 2024 2023 Cash used in operating activities $ (108,168) $ (18,810) Cash used in investing activities (3,839) (15,561) Cash provided by (used in) financing activities 116,322 (74,761) Net increase (decrease) in cash and cash equivalents and restricted cash $ 4,315 $ (109,132) Management believes that funds from operations, combined with our capital base and available credit facilities, are sufficient for our liquidity needs in the foreseeable future.
The receivable from brokers, dealers and clearing organizations represents deposits for securities borrowed transactions, margin deposits or current transactions awaiting settlement. The receivable from customers represents margin balances and amounts due on transactions awaiting settlement. Our receivables are, for the most part, collateralized by marketable securities.
Liquidity For the most part, the Company's assets consist of cash and cash equivalents and assets that it can readily convert into cash. The receivable from brokers, dealers and clearing organizations represents deposits for securities borrowed transactions, margin deposits or current transactions awaiting settlement. The receivable from customers represents margin balances and amounts due on transactions awaiting settlement.
We recognize the importance of compliance with applicable regulatory requirements and are committed to performing rigorous and ongoing assessments of our compliance and risk management effort, and investing in people and programs, while providing a platform with first class investment programs and services. 39 Table of Contents The Company is also reviewing its full service business model to determine the opportunities available to build or acquire closely related businesses in areas where others have shown some success.
We recognize the importance of 36 Table of Contents compliance with applicable regulatory requirements and are committed to performing rigorous and ongoing assessments of our compliance and risk management effort, and investing in people and programs, while providing a platform with first class investment programs and services.
We are continuously reviewing ways in which we can increase security around our data and our platform as the risks of cybercrime increase. In investment banking, we are committed to growing our footprint by adding experienced bankers within our existing industry practices as well as new industry practices where we believe we can be successful.
In investment banking, we are committed to growing our footprint by adding experienced bankers within our existing industry practices as well as new industry practices where we believe we can be successful. We continuously invest in and improve our technology platform to support client service and to remain competitive, while continuously managing expenses.
At December 31, 2023, bank call loans were zero (zero at December 31, 2022). The average daily bank loan outstanding for the year ended December 31, 2023 was $49.4 million ($79.4 million for the year ended December 31, 2022).
The average daily bank loan outstanding for the year ended December 31, 2024 was $167.7 million ($49.4 million for the year ended December 31, 2023). The largest daily bank loan outstanding for the year ended December 31, 2024 was $350.7 million ($167.3 million for the year ended December 31, 2023).
The largest daily bank loan outstanding for the year ended December 31, 2023 was $167.3 million ($226.6 million for the year ended December 31, 2022). At December 31, 2023, securities loan balances totaled $285.0 million ($320.8 million at December 31, 2022).
At December 31, 2024, securities loan balances totaled $235.5 million ($285.0 million at December 31, 2023). The average daily securities loan balance for the year ended December 31, 2024 was $305.8 million ($327.0 million for the year ended December 31, 2023).
Regulatory Environment See the discussion of the regulatory environment in which we operate and the impact on our operations of certain rules and regulations in Item 1 “Business - Regulation” herein for additional information. Oppenheimer and many of its affiliates are each subject to various regulatory capital requirements.
All such requirements have been met in the ordinary course with available collateral. 48 Table of Contents REGULATORY MATTERS AND DEVELOPMENTS See the discussion of the regulatory environment in which we operate and the impact on our operations of certain rules and regulations in Item 1 “Business - Regulation” herein for additional information.
(x) the adoption and implementation of the SEC’s “Regulation Best Interest” and other regulations adopted in recent years, (xi) war, terrorist acts and nuclear confrontation as well as political unrest, including events relating to Russia’s invasion of Ukraine and Western sanctions and the Israel-Hamas war and related unrest in the Middle East, (xii) the Company’s ability to achieve its business plan, (xiii) the effects of the economy on the Company’s ability to find and maintain financing options and liquidity, (xiv) credit, operational, legal and regulatory risks, (xv) risks related to foreign operations, including those in the United Kingdom which may be affected by Britain’s January 2020 exit from the EU(“Brexit”) and economic uncertainty in the UK, EU, and elsewhere, (xvi) the effect of technological innovation on the financial services industry and securities business, (xvii) risks related to election results, Congressional gridlock, political and social unrest, government shutdowns and investigations, trade wars, changes in or uncertainty surrounding regulation, and the potential for default by the U.S. government on the nation's debt, (xviii) risks related to changes in capital requirements under international standards that may cause banks to back away from providing funding to the securities industry, and (xix) risks related to the severity and duration of the COVID-19 Pandemic; the COVID-19 Pandemic’s impact on the U.S. and global economies; and federal, state and local governmental responses to the COVID-19 Pandemic.
These risks and uncertainties, many of which are beyond the Company’s control, include, but are not limited to: (i) transaction volume in the securities markets, (ii) the volatility of the securities markets, (iii) fluctuations in interest rates, (iv) changes in regulatory requirements that could affect the cost and method of doing business, (v) general economic conditions, both domestic and international, including inflation, recession, and changes in consumer confidence and spending, (vi) competition from existing financial institutions, new entrants and other participants in the securities markets and financial services industry, (vii) potential cybersecurity threats and attacks, (viii) legal developments affecting the litigation experience of the securities industry and the Company, (ix) changes in foreign, federal and state tax laws that could affect the popularity of products sold by the Company or impose taxes on securities transactions, (x) the adoption and implementation of the SEC’s “Regulation Best Interest” and other regulations adopted in recent years, (xi) war, terrorist acts and nuclear confrontation as well as political unrest, including events relating to the Israel-Hamas war, the conflict with Hezbollah and Iran and related unrest in the Middle East and Russia's invasion of Ukraine and related Western sanctions, (xii) the Company’s ability to achieve its business plan, (xiii) the effects of the economy on the Company’s ability to find and maintain financing options and liquidity, (xiv) credit, operational, legal and regulatory risks, (xv) risks related to foreign operations, (xvi) the effect of technological innovation on the financial services industry and securities business including but not limed to risks associated with the use of artificial intelligence, (xvii) risks related to election results, Congressional gridlock, political and social unrest, government shutdowns and investigations, trade wars, bank failures, changes in or uncertainty surrounding regulation, and the potential for default by the U.S. government on the nation's debt, (xviii) risks related to changes in capital requirements under international standards that may cause banks to back away from providing funding to the securities industry and (xix) economic, market, political and social impact of, and uncertainty relating to, any catastrophic events, including pandemics, epidemics or other outbreaks of disease, climate-related risks such as natural disasters and extreme weather events.
There remains a risk that the conflict could expand into a wider regional war, which could have an adverse impact on the worldwide economy, financial markets and thus on our business. At this time, the conflict has not yet had a material impact on our business operations in Israel or elsewhere.
The conflict was further intensified in 2024 by the direct entry of Iran, which launched a missile attack on Israel. Despite a recently announced ceasefire, there remains a risk that these conflicts could expand into a wider regional war which could have an adverse impact on the worldwide economy, financial markets and thus on our business.
We advanced $21.5 million in forgivable notes (which are inherently illiquid) to employees for the year ended December 31, 2023 ($19.8 million for the year ended December 31, 2022) as upfront or backend inducements to commence or continue employment as the case may be. The amount of funds allocated to such inducements will vary with hiring activity.
Securities owned, with the exception of the auction rate securities and trade claims, are mainly comprised of actively trading, readily marketable securities. 46 Table of Contents We issued $25.4 million in forgivable notes (which are inherently illiquid) to employees for the year ended December 31, 2024 ($21.5 million for the year ended December 31, 2023) as upfront or backend inducements to commence or continue employment as the case may be.
We satisfy our need for short-term liquidity from internally generated funds, collateralized and uncollateralized bank borrowings, stock loans and repurchase agreements and warehouse facilities. Bank borrowings are, in most cases, collateralized by firm and customer securities. We obtain short-term borrowings primarily through bank call loans. Bank call loans are generally payable on demand and bear interest at various rates.
The amount of funds allocated to such inducements will vary with hiring activity. We satisfy our need for liquidity from internally generated funds, collateralized and uncollateralized bank borrowings, stock loans and repurchase agreements and warehouse facilities. Bank borrowings are uncommitted in nature and, in most cases, collateralized by firm and customer securities.
(Expressed in thousands ) For the Years Ended December 31, 2023 2022 % Change Revenue $ 345,897 $ 337,821 2.4 Investment Banking $ 111,734 $ 117,101 (4.6) Advisory fees 69,623 84,569 (17.7) Equities underwriting 33,904 24,583 37.9 Fixed income underwriting 6,594 8,898 (25.9) Other 1,613 (949) * Sales and Trading $ 231,867 $ 217,712 6.5 Equities 128,216 141,013 (9.1) Fixed income 103,651 76,699 35.1 Other $ 2,296 $ 3,008 (23.7) Total Expenses $ 408,858 $ 363,517 12.5 Compensation 269,330 260,974 3.2 Non-compensation 139,528 102,543 36.1 Pre-Tax Loss $ (62,961) $ (25,696) 145.0 Compensation Ratio 77.9 % 77.3 % 0.8 Non-compensation Ratio 40.3 % 30.4 % 32.6 Pre-Tax Margin (18.2) % (7.6) % 139.5 * Percentage not meaningful • Advisory fees earned from investment banking activities decreased 17.7% compared with the prior year driven by an industry-wide slowdown in M&A transactions. • Equities underwriting fees increased 37.9% compared with the prior year due to higher new issuance volumes and deal sizes, primarily during the third quarter. • Fixed income underwriting fees were down 25.9% compared with the prior year primarily driven by less overall new issuance activity. • Equities sales and trading decreased 9.1% compared with the prior year due to reduced volumes as a result of lower market volatility. • Fixed income sales and trading increased 35.1% compared with the prior year driven by higher trading income attributable to higher volumes. • Compensation expenses were slightly higher than the prior year due to opportunistic hires and inflationary pressures on wages as well as higher deferred compensation costs. • Non-compensation expenses were 36.1% higher compared with the prior year mainly due to an increase in interest expense in financing trading inventories.
(Expressed in thousands, except otherwise indicated ) For the Years Ended December 31, 2024 2023 % Change Revenue $ 447,579 $ 345,897 29.4 Investment Banking $ 166,785 $ 111,734 49.3 Advisory fees 107,222 69,623 54.0 Equities underwriting 46,181 33,904 36.2 Fixed income underwriting 11,844 6,594 79.6 Other 1,538 1,613 * Sales and Trading $ 277,262 $ 231,867 19.6 Equities 134,854 128,216 5.2 Fixed income 142,408 103,651 37.4 Other $ 3,532 $ 2,296 53.8 Total Expenses $ 487,175 $ 408,858 19.2 Compensation 323,612 269,330 20.2 Non-compensation 163,563 139,528 17.2 Pre-Tax Loss $ (39,596) $ (62,961) (37.1) Compensation Ratio 72.3 % 77.9 % (7.2) Non-compensation Ratio 36.5 % 40.3 % (9.4) Pre-Tax Margin (8.8) % (18.2) % (51.6) * Percentage not meaningful • Advisory fees earned from investment banking activities increased 54.0% compared with the prior year due to an increase in restructuring-related mandates and higher transaction volumes, particularly in the healthcare industry. • Equities underwriting fees increased 36.2% compared with the prior year due to higher new issuance volumes. • Fixed income underwriting fees were up 79.6% compared with the prior year primarily driven by an uptick in new issuance activity. • Equities sales and trading increased 5.2% compared with the prior year due to higher trading volumes. • Fixed income sales and trading increased 37.4% compared with the prior year driven by higher trading income attributable to higher volumes and increased market share • Compensation expenses were higher than the prior year due to greater incentive compensation accruals and higher salary expenses associated with opportunistic hires. • Non-compensation expenses were 17.2% higher compared with the prior year mainly due to an increase in interest expense in financing trading inventories.
As of December 31, 2023, the Company had $2.7 million in financial instruments, comprised of auction rate securities, classified within Level 3 of the fair value hierarchy. See note 8 to the consolidated financial statements appearing in Item 8 for further information on the fair value definition, Level 1, Level 2 and Level 3 and related valuation techniques.
As of December 31, 2024, the Company had $5.3 million in financial instruments, comprised of auction rate securities and trade claims, classified within Level 3 of the fair value hierarchy.
Our collateral maintenance policies and procedures are designed to limit our exposure to credit risk. Securities owned, with the exception of the auction rate securities, are mainly comprised of actively trading, readily marketable securities.
Our receivables are, for the most part, collateralized by marketable securities. Our collateral maintenance policies and procedures are designed to limit our exposure to credit risk.
Compensation and related expenses as a percentage of revenue was 66.7% for the year ended December 31, 2022 compared with 63.6% for the year ended December 31, 2021. • Non-compensation expenses were $324.6 million during the year ended December 31, 2022, an increase of 14.9% compared with $282.6 million during the year ended December 31, 2021 due to higher legal costs recorded during third quarter of 2022 which related to an adverse arbitration decision. • The effective income tax rate for the year ended December 31, 2022 was 29.5% compared with 29.2% for the year ended December 31, 2021.
Compensation and related expenses as a percentage of revenue was 65.4% for the year ended December 31, 2024 compared with 62.7% for the year ended December 31, 2023. • Non-compensation expenses were $389.9 million during the year ended December 31, 2024, a decrease of 7.1% compared with $419.7 million during the year ended December 31, 2023 largely due to the absence of significant legal and regulatory costs, partially offset by an increase in interest expense. • The effective income tax rate for the year ended December 31, 2024 was 32.6% compared with 35.3% for the year ended December 31, 2023 primarily due to the absence of the non-deductible $13.0 million regulatory settlement, which was recorded in 2023.
We are committed to continuing to improve our capabilities to ensure compliance with industry regulations, support client service and expand our wealth management and capital markets capabilities.
We recognize employee work habits have changed in a post-pandemic world. As a result, we are continuously reviewing our physical footprint on lease renewals, and in many cases reducing office size and configuration. We are committed to continuing to improve our capabilities to ensure compliance with industry regulations, support client service and expand our wealth management and capital markets capabilities.
New Accounting Pronouncements The following Accounting Standards Update (“ASU”) issued by the Financial Accounting Standards Board ("FASB") has not yet been adopted by the Company: ASU 2023-07 – Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In November 2023, the FASB issued this ASU to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.
New Accounting Pronouncements The following Accounting Standards Updates (“ASU”) issued by the Financial Accounting Standards Board ("FASB") have not yet been adopted by the Company: ASU 2023-09 – Income Taxes (Topic 740): Improvements to Income Tax Disclosures The FASB issued this ASU in December of 2023 to enhance the transparency and decision usefulness of income tax disclosures.
While this ASU will have no impact on the Company’s financial position or results of operations, the Company is currently evaluating the impact of this ASU on its segment disclosures. LIQUIDITY AND CAPITAL RESOURCES Total assets increased by 5.9% from December 31, 2022 to December 31, 2023.
The new guidance, which becomes effective in 2027, will not have an impact on our financial position or results of operations since it only amends certain disclosures. LIQUIDITY AND CAPITAL RESOURCES Total assets increased by 17.7% from December 31, 2023 to December 31, 2024.
Israel formally declared war on Hamas in response to the attack and initiated several military operations in an effort to clear militants from the area. The war has triggered a humanitarian crisis, with hundreds of thousands displaced from their homes and many without food, water or electricity.
Israel formally declared war on Hamas in response to the attack and initiated several military operations in an effort to clear militants from the area. The war has now finished its second year and has seen a significant escalation in a longstanding conflict between Israel and Hezbollah, the Lebanese-based militant group.
(Expressed in thousands) As of December 31, 2023 Total Assets $ 2,087,888 Due From Non-Guarantor Subsidiary 15,908 Total Liabilities 574,368 Due To Non-guarantor Subsidiary 55,799 For the Year Ended December 31, 2023 Total Revenue $ 10,472 Pre-Tax Loss 114 Net Income 1,520 S&P’s Corporate Family rating and the rating on the Notes is a 'BB-' with a stable outlook.
(Expressed in thousands) As of December 31, 2024 Total Assets $ 2,441,237 Due From Non-Guarantor Subsidiary 86,229 Total Liabilities 573,873 Due To Non-guarantor Subsidiary 15,486 For the Year Ended December 31, 2024 Total Revenue $ 10,558 Pre-Tax Income 1,174 Net Income 2,319 Subsequent to our redemption of the Notes on October 10, 2024, at the Company's request, both S&P and Moody's withdrew their ratings.
The average daily securities loan balance for the year ended December 31, 2023 was $327.0 million ($297.6 million for the year ended December 31, 2022). The largest daily stock loan balance for the year ended December 31, 2023 was $391.5 million ($350.1 million for the year ended December 31, 2022).
The largest daily stock loan balance for the year ended December 31, 2024 was $425.3 million ($391.5 million for the year ended December 31, 2023). We finance our government trading operations through the use of securities purchased under agreements to resell ("reverse repurchase agreements") and repurchase agreements.
BUSINESS SEGMENTS The table below presents information about the reported revenue and pre-tax income (loss) of the Company's reportable business segments for the three months and years ended December 31, 2023 and 2022: (Expressed in thousands) For the Three Months Ended December 31, For the Years Ended December 31, 2023 2022 % Change 2023 2022 % Change Revenue Private Client $ 203,834 $ 201,748 1.0 $ 801,754 $ 675,680 18.7 Asset Management 21,446 22,940 (6.5) 88,433 99,242 (10.9) Capital Markets 81,457 90,549 (10.0) 345,897 337,821 2.4 Corporate/Other 1,552 (1,657) * 12,741 (1,802) * Total 308,289 313,580 (1.7) 1,248,825 1,110,941 12.4 Pre-Tax Income (Loss) Private Client 53,945 49,331 9.4 194,444 142,250 36.7 Asset Management 6,125 9,837 (37.7) 24,091 35,753 (32.6) Capital Markets (18,179) (11,328) 60.5 (62,961) (25,696) 145.0 Corporate/Other (24,059) (17,568) 36.9 (108,804) (106,753) 1.9 Total $ 17,832 $ 30,272 (41.1) $ 46,770 $ 45,554 2.7 * Percentage not meaningful Private Client Private Client reported revenue of $801.8 million for the year ended December 31, 2023, 18.7% higher compared with the prior year.
(Expressed in thousands) For the Three Months Ended December 31, For the Years Ended December 31, 2024 2023 % Change 2024 2023 % Change Revenue Wealth Management 253,515 225,279 12.5 972,052 890,185 9.2 Capital Markets 119,325 81,457 46.5 447,579 345,897 29.4 Corporate/Other 2,577 1,553 65.9 12,865 12,743 1.0 Total 375,417 308,289 21.8 1,432,496 1,248,825 14.7 Pre-Tax Income (Loss) Wealth Management 53,708 60,070 (10.6) 265,739 218,533 21.6 Capital Markets (4,975) (18,179) (72.6) (39,596) (62,961) (37.1) Corporate/Other (31,666) (24,059) 31.6 (120,386) (108,802) 10.6 Total $ 17,067 $ 17,832 (4.3) $ 105,757 $ 46,770 126.1 40 Table of Contents Wealth Management Wealth Management reported revenue of $972.1 million for the year ended December 31, 2024, 9.2% higher compared with the prior year.
At December 31, 2023, the Company employed 2,942 employees (2,903 full-time and 39 part-time), of whom 931 were financial advisors.
Through OPY Credit Corp., we conduct secondary trading activities related to the purchase and sale of loans and trade claims, primarily on a riskless principal basis. At December 31, 2024, the Company employed 3,018 employees (2,977 full-time and 41 part-time), of whom 931 were financial advisors.
Expenses • Compensation and related expenses totaled $740.8 million during the year ended December 31, 2022, a decrease of 16.5% compared with the year ended December 31, 2021 due to decreased incentive compensation costs.
Expenses • Compensation and related expenses totaled $936.8 million during the year ended December 31, 2024, an increase of 19.7% compared with the year ended December 31, 2023 primarily due to higher salary expense, production-related expenses, incentive compensation costs and elevated expenses associated with Oppenheimer stock appreciation rights (“OARs”), which were adversely impacted by the significant increase in the OPY Class A Share price.
Moody’s Corporate Family rating and the rating on the Notes is a “Ba3” with a stable outlook. Liquidity For the most part, the Company's assets consist of cash and cash equivalents and assets that it can readily convert into cash.
Immediately prior to the redemption of the Notes, S&P’s Corporate Family rating and rating on the Notes was a 'BB-' with a stable outlook while Moody’s Corporate Family rating and rating on the Notes was a “Ba3” with a stable outlook.
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We continuously invest in and improve our technology platform to support client service and to remain competitive, while continuously managing expenses.
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The Company also reviews its full service business model to determine the opportunities available to build or acquire closely related businesses in areas where others have shown some success. Equally important is the search for viable acquisition candidates.
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We review potential acquisition opportunities from time to time with the aim of fulfilling the Company's strategic goals, while evaluating and managing our existing businesses.
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Impact of Change in Short-term Interest Rates After decreasing the federal funds rate for the first time in nearly 14 months with a 50 bps reduction in September of 2024, the Federal Reserve (the “FED”) enacted two separate 0.25% rate cuts in the fourth quarter of 2024, lowering the target fed funds range to 4.25% - 4.50% – a full percent below its recent peak.
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Impact of Change in Short-term Interest Rates After increasing rates by 425 basis points in 2022, the Federal Reserve (the “FED”) slowed both the pace and magnitude of rate increases in 2023.
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Projections of the federal funds rate released by the FED after its December meeting indicate that they expect two additional rate cuts in 2025, which is reduced from previous forecasts and reflective of the FED’s stated intention of proceeding with a cautious approach dependent on inflation and employment data.
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To prevent overtightening in the midst of conflicting economic data and stress within the regional banking sector at the outset of the year, the FED proceeded cautiously and enacted four federal funds rate increases – 25 basis points each – between its February and July meetings.
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Recent employment figures reflect a stronger economy than earlier projected and may impact future interest rate decisions. Plans announced by the incoming administration including actions on tariffs and immigration status of undocumented persons may tend to weaken economic activity and could also impact future interest rate decisions. Potential decreases to the federal funds rate may impact our interest-based revenues.
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The FED paused on further tightening actions for the remainder of 2023, largely due to improved inflationary readings, resulting in the target federal funds rate remaining at 5.25% to 5.50% as of December 31, 2023. The FED’s forecast currently projects three rate decreases during 2024, though this is subject to change.
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At this time, these conflicts have not yet had a material impact on our business operations in Israel or elsewhere. EXECUTIVE SUMMARY T he firm registered strong results of operations for the year ended 2024 on the back of record high revenue generated by our diverse businesses.
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Increases in the federal funds rate will be favorable to the Company’s interest-based revenues though any future federal funds rate decreases may result in reductions to these revenues.
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Our reported results were negatively impacted (with full year expense totaling $32.6 million pre-tax) by the increase in our stock price in 2024 and its conversion to expense in certain liability awards previously made to employees, making the recent recognition of our stock by investors, a mixed blessing.
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“Dutch Auction” Tender Offer On July 6, 2023, the Company completed its “Dutch Auction” tender offer. A total of 437,183 shares of the Company's Class A Stock, par value $0.001 per share were properly tendered at a purchase price of $40.00 per share for an aggregate cost of approximately $17.49 million.
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Our results were buoyed by an equities market that had a strong increase in popular averages, as lower interest rates and a strong domestic economy powered the S&P 500 to 57 new record closes and its best consecutive years in over two decades.
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The purpose of the tender offer, among others, was to assure that sufficient liquidity existed for our stockholders that might have been required to sell shares of Class A Stock when they were removed from the Russell 2000 and 3000 indices at the end of June 2023.
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Equity markets were led by significant increases in the performance of the “Magnificent Seven,” propelled by the expectation of the impact of A.I. on the economy in future years. Most economic indicators currently suggest that the economy is well on its way to achieving a “soft landing” as we move further into 2025.
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EXECUTIVE SUMMARY The Company generated profitable results for the full year 2023 despite mixed macroeconomic conditions and significantly higher legal and regulatory costs.
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The continued rise of the markets drove the outstanding results shown in our Wealth Management business. Asset-based advisory fees, in particular, grew significantly from the prior year in large part due to AUM reaching a fourth-consecutive all-time high at year-end. Retail trading volumes also remained elevated throughout the year, boosting transaction-based commissions.
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The costs of a particular legal matter (which we now believe is mostly behind us from a financial point of view) and, the impact of a non-recurring accrual related to an SEC industry-wide focus on ‘off-channel communications’ was approximately $70 million for the year.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeLegal and regulatory risk includes the risk of non-compliance with applicable legal and regulatory requirements, client claims and the possibility of sizeable adverse legal judgments. The Company is subject to extensive regulation in the different jurisdictions in which it conducts its activities.
Biggest changeSee the discussion of the liquidity management processes in Item 7 “Liquidity and Capital Resources” herein for additional information regarding our liquidity and how we manage liquidity risk. Legal and Regulatory Risk . Legal and regulatory risk includes the risk of non-compliance with applicable legal and regulatory requirements, client claims and the possibility of sizeable adverse legal judgments.
With respect to client activities, the Company operates a system of internal controls designed to ensure that transactions and other account activity (new account solicitation, transaction authorization, transaction processing, billing and collection) are properly approved, processed, recorded and reconciled. The Company has procedures designed to assess and monitor counterparty risk. Legal and Regulatory Risk .
With respect to client activities, the Company operates a system of internal controls designed to ensure that transactions and other account activity (new account solicitation, transaction authorization, transaction processing, billing and collection) are properly approved, processed, recorded and reconciled. The Company has procedures designed to assess and monitor counterparty risk. Liquidity Risk.
The value-at-risk calculation uses standard statistical techniques to measure the potential loss in fair value based upon a one-day holding period and a 95% 55 Table of Contents confidence level of loss. The calculation is based upon a variance-covariance methodology, which assumes a normal distribution of changes in portfolio value.
The value-at-risk calculation uses standard statistical techniques to measure the potential loss in fair value based upon a one-day holding period and a 95% confidence level of loss. The calculation is based upon a variance-covariance methodology, which assumes a normal distribution of changes in portfolio value.
As part of its normal business operations, the Company engages in the trading of both fixed income and equity securities in both a proprietary and market-making capacity. The Company makes markets in over-the-counter equities in order to facilitate order flow and accommodate its institutional and retail customers.
As part of its normal business operations, the Company engages in the trading of both fixed income and equity securities in both a proprietary and market-making capacity. The Company makes markets in over-the-counter equities in order to facilitate 49 Table of Contents order flow and accommodate its institutional and retail customers.
The changes in the value-at-risk amounts reported in 2023 from those reported in 2022 reflect changes in the size and composition of the Company's trading portfolio at December 31, 2023 compared to December 31, 2022.
The changes in the value-at-risk amounts reported in 2024 from those reported in 2023 reflect changes in the size and composition of the Company's trading portfolio at December 31, 2024 compared to December 31, 2023.
The Company's market risk exposure is continuously monitored as the portfolio risks and market conditions change. 56 Table of Contents
The Company's market risk exposure is continuously monitored as the portfolio risks and market conditions change. 52 Table of Contents
The Company's portfolio as of December 31, 2023 includes approximately $18.6 million in corporate equities, which are related to deferred compensation liabilities and which do not bear any value-at-risk to the Company.
The Company's portfolio as of December 31, 2024 includes approximately $18.6 million in corporate equities, which are related to deferred compensation liabilities and which do not bear 51 Table of Contents any value-at-risk to the Company.
At December 31, 2023 and 2022, the Company's value-at-risk for each component of market risk was as follows: (Expressed in thousands) VAR for Fiscal 2023 VAR for Fiscal 2022 High Low Average High Low Average Equity price risk $ 165 $ 11 $ 91 $ 298 $ 25 $ 104 Interest rate risk 2,027 1,345 1,638 2,928 881 1,547 Commodity price risk — — — — — — Diversification benefit (317) (780) (561) (483) (903) (652) Total $ 1,875 $ 576 $ 1,168 $ 2,743 $ 3 $ 999 (Expressed in thousands) VAR at December 31, 2023 2022 Equity price risk $ 79 $ 67 Interest rate risk 1,345 1,192 Diversification benefit (317) (578) Total $ 1,107 $ 681 The potential future loss presented by the total value-at-risk generally falls within predetermined levels of loss that should not be material to the Company's results of operations, financial condition or cash flows.
At December 31, 2024 and 2023, the Company's value-at-risk for each component of market risk was as follows: (Expressed in thousands) VAR for Fiscal 2024 VAR for Fiscal 2023 High Low Average High Low Average Equity price risk $ 126 $ 37 $ 95 $ 165 $ 11 $ 91 Interest rate risk 1,641 1,068 1,355 2,027 1,345 1,638 Commodity price risk — — — — — — Diversification benefit (227) (663) (369) (317) (780) (561) Total $ 1,540 $ 442 $ 1,081 $ 1,875 $ 576 $ 1,168 (Expressed in thousands) VAR at December 31, 2024 2023 Equity price risk $ 104 $ 79 Interest rate risk 1,068 1,345 Diversification benefit (227) (317) Total $ 945 $ 1,107 The potential future loss presented by the total value-at-risk generally falls within predetermined levels of loss that should not be material to the Company's results of operations, financial condition or cash flows.
Regulatory oversight of the securities industry has become increasingly intense over the past several years and the Company, as well as others in the industry, have been directly affected by this increased regulatory scrutiny.
The Company is subject to extensive regulation in the different jurisdictions in which it conducts its activities. Regulatory oversight of the securities industry has become increasingly intense over the past several years and the Company, as well as others in the industry, have been directly affected by this increased regulatory scrutiny.
Positions and profits and losses for each trading department are reported to senior management on a daily basis. 54 Table of Contents In its market-making activities, Oppenheimer must provide liquidity in the equities for which it makes markets.
Each trading department adheres to internal position limits determined by the Market Risk Committee and regularly reviews the age and composition of its proprietary accounts. Positions and profits and losses for each trading department are reported to senior management on a daily basis. In its market-making activities, Oppenheimer must provide liquidity in the equities for which it makes markets.
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Each trading department adheres to internal position limits determined by the Market Risk Committee and regularly reviews the age and composition of its proprietary accounts.
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Liquidity risk refers to the risk that we will be unable to finance our operations due to a loss of access to the capital markets or difficulty in liquidating our assets.
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Liquidity risk also encompasses our ability (or perceived ability) to meet our financial obligations without experiencing significant business disruption or reputational damage that may threaten our viability as a going concern as well as the associated funding risks triggered by the market or idiosyncratic stress events that 50 Table of Contents may negatively affect our liquidity and may impact our ability to raise new funding.

Other OPY 10-K year-over-year comparisons