The Securities and Exchange Commission (SEC) and Oppenheimer & Co Inc continue their talks on a settlement in a case about non-compliance with municipal bond offering disclosure requirements.
On August 4, 2025, the parties submitted a status update to the New York Southern District Court.
Oppenheimer and SEC staff have reached agreement on the final documentation of their settlement in principle. SEC Enforcement staff appearing in this case have prepared a recommendation of the settlement terms for consideration by the full Commission.
However, Oppenheimer recently identified additional statutory disqualifications that would be triggered by the injunctive relief portion of the settlement terms. Accordingly, Oppenheimer has begun the process of seeking additional Commission relief from those statutory disqualifications.
The internal agency processes of seeking Commission approvals for settlement terms and relief from statutory disqualifications undergo separate review processes.
The parties request that the Court maintain the stay of this action to conserve judicial and party resources while these processes continue to proceed. Within 60 days, on or before October 3, 2025, the parties will file either (i) a consent to entry of a final judgment and a proposed final judgment, or (2) an updated status report.
This action concerns Oppenheimer’s repeated failures to comply with the requirements of the “Limited Offering Exemption,” which exempts certain “Limited Offerings” of municipal securities from the general requirement to provide disclosures to investors.
The Limited Offering Exemption requires, among other things, that underwriters like Oppenheimer have a reasonable belief that the municipal securities are being sold only to sophisticated investors that are each buying the securities for a single account without a plan to distribute them.
Yet, from June 15, 2017 through April 27, 2022 (the “relevant period”), Oppenheimer sold securities in at least 354 municipal offerings in purported reliance on the Limited Offering Exemption when it had not satisfied the exemption requirements.
In each Violative Offering, Oppenheimer sold municipal securities to broker-dealers and/or investment advisers when Oppenheimer did not have a reasonable belief that those entities were buying for their own accounts. In fact, Oppenheimer knew or should have known those entities may have been buying the securities on behalf of their customer and/or client accounts.
Despite this, Oppenheimer made no inquiry to determine if those entities were buying on behalf of their customers and/or clients and, if so, whether such investors met the exemption criteria. Thus, Oppenheimer failed to satisfy the Limited Offering Exemption because it sold the municipal securities without a reasonable belief that the broker-dealers and/or investment advisers, or any customers and/or clients on whose behalf they may have been buying, were both sophisticated and buying the securities for a single account.
Throughout the relevant period, Oppenheimer lacked policies and procedures reasonably designed to ensure that it complied with the Limited Offering Exemption when acting as underwriter in Limited Offerings of municipal securities.
At the same time, Oppenheimer made deceptive statements to municipal securities issuers by representing that it would and did comply with the Limited Offering Exemption requirements. Oppenheimer was negligent in making these statements because its regular practice was to not obtain the information necessary to know whether its sales of municipal securities would or did meet the Limited Offering Exemption requirements.
The 354 Violative Offerings that Oppenheimer conducted did not meet the Limited Offering Exemption requirements, and Oppenheimer knew or should have known its statements to the contrary were deceptive.
In connection with the 354 Violative Offerings it conducted, Oppenheimer realized at least $1,938,580 in net profits.
