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Oppenheimer OPPENHEIMER RESPONSES TO UPDATED BROKER/DEALER RFI • An active secondary market for its securities. • Access to multiple broker/dealer inventories for competitive pricing. • Be willing to purchase securities from the City’s portfolio. Oppenheimer holds inventory and accesses other Broker/Dealer Firm’s inventory to market securities. Each morning and continuing throughout the day, the respective Oppenheimer trading desk (Corp, Muni, Agency, etc.) uses Bloomberg systems to distribute firm and street offers internally. Our desk compiles the offers and distributes them to interested clients. If a client inquires about a specific investment with a desired maturity range, we respond with offers from internal inventory as well as all Oppenheimer trading partners that meet the search requirements. Oppenheimer has dedicated and experienced fixed income staff and traders and makes active secondary markets for each of approved asset classes in La Quinta’s Investment Policy Statement. Clients often submit Bid/Offer wanted e- mails or correspondence and Oppenheimer actively buys securities from client portfolios. • Internal credit research analysis on commercial paper, bankers’ acceptances and other securities it offers for sale. • Be capable of providing market analysis, economic projections, portfolio analysis, interest earnings projections, and newsletters. • Online platform for investment research, portfolio management, inventory availability, and or/trading. Oppenheimer distributes numerous research publications, including a weekly Municipal Basis Points commentary and a Fixed Income Perspectives publication, both of which have been included with this submission in PDF format. At www.opco.com, clients can read the latest research and market commentary from Oppenheimer Asset Management and Oppenheimer Research analysts. Market data is located on the Welcome Page and can be customized to a client’s preferred specifications. The most recent Headline News and Reports scrolls and can be clicked to view full article/report. In addition, we are able to perform a portfolio analysis on most fixed income portfolios with the help of Oppenheimers’ portfolio strategist and analytics team. Client transaction confirmations are available on the www.opco.com website in PDF format to download electronically. Clients can elect to initiate trades via Bloomberg’s Electronic Trading Enablement system by selecting Oppenheimer as Dealer and completing the trade request enablement form. Client trade confirmations can be sent electronically via Bloomberg VCON function • Copy of the last two years of SEC form X-17A-5 for documentation of rule 15c3-1 (Net Capital requirement for broker dealers). Oppenheimer is a publicly traded stock listed on the NYSE. The SEC X-17A-5 FOCUS Report contains Non-Public information. Oppenheimer will disseminate our FOCUS Report (SEC X-17A-5) with clients and potential counterparties, but the firm does require the counterparty to sign a Confidentiality Agreement prior to us providing that information. The Net Capital Requirement is listed in our SEC Filed and Audited Annual Reports as well as our publicly available Statement of Financial Condition. In addition to our previously submitted Annual Report I’ve also attached our 2018 and 2017 Year End Statement of Financial Condition report. You can find our Net Capital Requirement information on the Statement of Financial Condition Section 12: Regulatory Requirements. BrokerCheck ReportCHRISTOPHER FRANCIS SULLIVANSection TitleReport SummaryBroker QualificationsRegistration and Employment HistoryDisclosure EventsCRD# 473173712 - 456Page(s) About BrokerCheck®BrokerCheck offers information on all current, and many former, registered securities brokers, and all current and formerregistered securities firms. FINRA strongly encourages investors to use BrokerCheck to check the background ofsecurities brokers and brokerage firms before deciding to conduct, or continue to conduct, business with them.āWhat is included in a BrokerCheck report?āBrokerCheck reports for individual brokers include information such as employment history, professionalqualifications, disciplinary actions, criminal convictions, civil judgments and arbitration awards. BrokerCheckreports for brokerage firms include information on a firm’s profile, history, and operations, as well as many of thesame disclosure events mentioned above.āPlease note that the information contained in a BrokerCheck report may include pending actions orallegations that may be contested, unresolved or unproven. In the end, these actions or allegations may beresolved in favor of the broker or brokerage firm, or concluded through a negotiated settlement with no admissionor finding of wrongdoing.āWhere did this information come from?āThe information contained in BrokerCheck comes from FINRA’s Central Registration Depository, orCRD® and is a combination of:Rinformation FINRA and/or the Securities and Exchange Commission (SEC) require brokers andbrokerage firms to submit as part of the registration and licensing process, andRinformation that regulators report regarding disciplinary actions or allegations against firms or brokers.āHow current is this information?āGenerally, active brokerage firms and brokers are required to update their professional and disciplinaryinformation in CRD within 30 days. Under most circumstances, information reported by brokerage firms, brokersand regulators is available in BrokerCheck the next business day.āWhat if I want to check the background of an investment adviser firm or investment adviserrepresentative?āTo check the background of an investment adviser firm or representative, you can search for the firm orindividual in BrokerCheck. If your search is successful, click on the link provided to view the available licensingand registration information in the SEC's Investment Adviser Public Disclosure (IAPD) website athttps://www.adviserinfo.sec.gov. In the alternative, you may search the IAPD website directly or contact your statesecurities regulator at http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/P455414.āAre there other resources I can use to check the background of investment professionals?āFINRA recommends that you learn as much as possible about an investment professional before decidingto work with them. Your state securities regulator can help you research brokers and investment adviserrepresentatives doing business in your state.āThank you for using FINRA BrokerCheck.For more information aboutFINRA, visit www.finra.org.Using this site/information meansthat you accept the FINRABrokerCheck Terms andConditions. A complete list ofTerms and Conditions can befound atFor additional information aboutthe contents of this report, pleaserefer to the User Guidance orwww.finra.org/brokercheck. Itprovides a glossary of terms and alist of frequently asked questions,as well as additional resources.brokercheck.finra.org CHRISTOPHER F. SULLIVANCRD# 4731737Currently employed by and registered with thefollowing Firm(s):OPPENHEIMER & CO. INC.50 SOUTH SIXTH STREETSUITE 1300MINNEAPOLIS, MN 55402CRD# 249Registered with this firm since: 04/17/2012Report Summary for this BrokerThis report summary provides an overview of the broker's professional background and conduct. Additionalinformation can be found in the detailed report.Disclosure EventsAll individuals registered to sell securities or provideinvestment advice are required to disclose customercomplaints and arbitrations, regulatory actions,employment terminations, bankruptcy filings, andcriminal or civil judicial proceedings.Are there events disclosed about this broker?YesThe following types of disclosures have beenreported:TypeCountCustomer Dispute1Broker QualificationsThis broker is registered with:9 Self-Regulatory Organizations21 U.S. states and territoriesThis broker has passed:0 Principal/Supervisory Exams4 General Industry/Product Exams2 State Securities Law ExamsRegistration HistoryThis broker was previously registered with thefollowing securities firm(s):MORGAN STANLEY SMITH BARNEYCRD# 149777WAYZATA, MN06/2009 - 04/2012CITIGROUP GLOBAL MARKETS INC.CRD# 7059WAYZATA, MN12/2003 - 06/2009www.finra.org/brokercheckUser Guidance1©2019 FINRA. All rights reserved. Report about CHRISTOPHER F. SULLIVAN. www.finra.org/brokercheckUser GuidanceBroker QualificationsRegistrationsThis section provides the self-regulatory organizations (SROs) and U.S. states/territories the broker is currentlyregistered and licensed with, the category of each license, and the date on which it became effective. This section alsoprovides, for every brokerage firm with which the broker is currently employed, the address of each branch where thebroker works.This individual is currently registered with 9 SROs and is licensed in 21 U.S. states and territories through hisor her employer.Employment 1 of 1Firm Name:Main Office Address:Firm CRD#:OPPENHEIMER & CO. INC.24985 BROAD STREET22ND,24TH FLOORNEW YORK, NY 10004SRO Category Status DateFINRAGeneral Securities RepresentativeAPPROVED04/17/2012Cboe Exchange, Inc.General Securities RepresentativeAPPROVED04/17/2012NYSE American LLCGeneral Securities RepresentativeAPPROVED04/17/2012NYSE Arca, Inc.General Securities RepresentativeAPPROVED04/17/2012NYSE Chicago, Inc.General Securities RepresentativeAPPROVED04/17/2012Nasdaq ISE, LLCGeneral Securities RepresentativeAPPROVED04/17/2012Nasdaq PHLX LLCGeneral Securities RepresentativeAPPROVED04/17/2012Nasdaq Stock MarketGeneral Securities RepresentativeAPPROVED04/17/2012New York Stock ExchangeGeneral Securities RepresentativeAPPROVED04/17/2012U.S. State/TerritoryCategory Status DateCalifornia AgentAPPROVED03/30/2016Colorado AgentAPPROVED10/21/2013Delaware AgentAPPROVED10/20/2014Florida AgentAPPROVED04/17/2012Illinois AgentAPPROVED12/05/2012U.S. State/TerritoryCategory Status DateIndiana AgentAPPROVED02/18/2015Iowa AgentAPPROVED11/04/2013Kansas AgentAPPROVED08/09/2013Michigan AgentAPPROVED07/10/2017Minnesota AgentAPPROVED04/17/20122©2019 FINRA. All rights reserved. Report about CHRISTOPHER F. SULLIVAN. www.finra.org/brokercheckUser GuidanceBroker QualificationsEmployment 1 of 1, continuedU.S. State/TerritoryCategory Status DateMississippi AgentAPPROVED08/11/2016Missouri AgentAPPROVED04/17/2012Nebraska AgentAPPROVED04/17/2012Nevada AgentAPPROVED06/25/2015North Carolina AgentAPPROVED03/17/2016North Dakota AgentAPPROVED06/04/2018Ohio AgentAPPROVED09/12/2017Oklahoma AgentAPPROVED07/25/2013Texas AgentAPPROVED04/17/2012Utah AgentAPPROVED01/03/2019Wisconsin AgentAPPROVED04/17/2012Branch Office LocationsOPPENHEIMER & CO. INC.50 SOUTH SIXTH STREETSUITE 1300MINNEAPOLIS, MN 554023©2019 FINRA. All rights reserved. Report about CHRISTOPHER F. SULLIVAN. www.finra.org/brokercheckUser GuidanceBroker QualificationsIndustry Exams this Broker has PassedThis individual has passed 0 principal/supervisory exams, 4 general industry/product exams, and 2 statesecurities law exams.This section includes all securities industry exams that the broker has passed. Under limited circumstances, a brokermay attain a registration after receiving an exam waiver based on exams the broker has passed and/or qualifying workexperience. Any exam waivers that the broker has received are not included below.Exam Category DatePrincipal/Supervisory ExamsNo information reported.Exam Category DateGeneral Industry/Product ExamsSecurities Industry Essentials Examination10/01/2018SIEMunicipal Advisor Representative Qualification Exam02/05/2016Series 50Futures Managed Funds Examination11/08/2005Series 31General Securities Representative Examination12/19/2003Series 7Exam Category DateState Securities Law ExamsUniform Investment Adviser Law Examination05/28/2004Series 65Uniform Securities Agent State Law Examination01/08/2004Series 63Additional information about the above exams or other exams FINRA administers to brokers and other securitiesprofessionals can be found at www.finra.org/brokerqualifications/registeredrep/.4©2019 FINRA. All rights reserved. Report about CHRISTOPHER F. SULLIVAN. www.finra.org/brokercheckUser GuidanceRegistration and Employment HistoryRegistration HistoryRegistration Dates Firm Name CRD# Branch LocationThe broker previously was registered with the following firms:06/2009 - 04/2012 MORGAN STANLEY SMITH BARNEY 149777 WAYZATA, MN12/2003 - 06/2009 CITIGROUP GLOBAL MARKETS INC. 7059 WAYZATA, MNEmployment HistoryEmployment Dates Employer Name Employer LocationThis section provides up to 10 years of an individual broker's employment history as reported by the individual broker onthe most recently filed Form U4.Please note that the broker is required to provide this information only while registered with FINRA or a nationalsecurities exchange and the information is not updated via Form U4 after the broker ceases to be registered.Therefore, an employment end date of "Present" may not reflect the broker's current employment status.04/2012 - Present OPPENHEIMER & CO. INC. MINNEAPOLIS, MN06/2009 - 04/2012 MORGAN STANLEY SMITH BARNEY WAYZATA, MN10/2003 - 06/2009 CITIGROUP GLOBAL MARKETS INC. WAYZATA, MNOther Business ActivitiesThis section includes information, if any, as provided by the broker regarding other business activities the broker iscurrently engaged in either as a proprietor, partner, officer, director, employee, trustee, agent or otherwise. This sectiondoes not include non-investment related activity that is exclusively charitable, civic, religious or fraternal and isrecognized as tax exempt.THE MINNESOTA GOVERNMENT FINANCE OFFICERS ASSOCIATION IS A NON INVESTMENT-RELATED CIVIC ORFRATERNAL ORGANIZATION. THE MISSION OF THE MNGFOA IS TO PROMOTE EXCELLENCE AND LEADERSHIPIN THE GOVERNMENT FINANCE PROFESSION BY PROVIDING EDUCATIONAL OPPORTUNITIES, AVENUES FORSHARING KNOWLEDGE, RECOGNITION OF MEMBERS' OUTSTANDING ACCOMPLISHMENTS, AND BYUPHOLDING HIGH PROFESSIONAL AND ETHICAL STANDARDS. MY POSITION ON THE PROGRAM COMMITTEEINVOLVES HELPING SOURCE OUTSIDE SPEAKERS FOR OUR MONTHLY LUNCHEONS. I DEVOTEAPPROXIMATELY 1 HOUR PER MONTH FOR MY MNGFOA ORGANIZATION ACTIVITY.5©2019 FINRA. All rights reserved. Report about CHRISTOPHER F. SULLIVAN. www.finra.org/brokercheckUser GuidanceDisclosure EventsWhat you should know about reported disclosure events:1.All individuals registered to sell securities or provide investment advice are required to disclose customercomplaints and arbitrations, regulatory actions, employment terminations, bankruptcy filings, and criminal or civiljudicial proceedings.2.Certain thresholds must be met before an event is reported to CRD, for example:RA law enforcement agency must file formal charges before a broker is required to disclose a particularcriminal event.RA customer dispute must involve allegations that a broker engaged in activity that violates certain rulesor conduct governing the industry and that the activity resulted in damages of at least $5,000.R3.Disclosure events in BrokerCheck reports come from different sources:RAs mentioned at the beginning of this report, information contained in BrokerCheck comes from brokers,brokerage firms and regulators. When more than one of these sources reports information for the samedisclosure event, all versions of the event will appear in the BrokerCheck report. The different versionswill be separated by a solid line with the reporting source labeled.R4.There are different statuses and dispositions for disclosure events:RA disclosure event may have a status ofpending, on appeal,orfinal.†A "pending" event involves allegations that have not been proven or formally adjudicated.†An event that is "on appeal" involves allegations that have been adjudicated but are currentlybeing appealed.†A "final" event has been concluded and its resolution is not subject to change.RA final event generally has a disposition ofadjudicated, settledorotherwise resolved.†An "adjudicated" matter includes a disposition by (1) a court of law in a criminal or civil matter, or(2) an administrative panel in an action brought by a regulator that is contested by the partycharged with some alleged wrongdoing.†A "settled" matter generally involves an agreement by the parties to resolve the matter. Pleasenote that brokers and brokerage firms may choose to settle customer disputes or regulatorymatters for business or other reasons.†A "resolved" matter usually involves no payment to the customer and no finding of wrongdoingon the part of the individual broker. Such matters generally involve customer disputes.For your convenience, below is a matrix of the number and status of disclosure events involving this broker.Further information regarding these events can be found in the subsequent pages of this report. You also maywish to contact the broker to obtain further information regarding these events.Final On AppealPendingCustomer Dispute 0 1 N/A6©2019 FINRA. All rights reserved. Report about CHRISTOPHER F. SULLIVAN. www.finra.org/brokercheckUser Guidance7©2019 FINRA. All rights reserved. Report about CHRISTOPHER F. SULLIVAN. www.finra.org/brokercheckUser GuidanceDisclosure Event DetailsWhen evaluating this information, please keep in mind that a discloure event may be pending or involve allegationsthat are contested and have not been resolved or proven. The matter may, in the end, be withdrawn, dismissed,resolved in favor of the broker, or concluded through a negotiated settlement for certain business reasons (e.g., tomaintain customer relationships or to limit the litigation costs associated with disputing the allegations) with noadmission or finding of wrongdoing.This report provides the information exactly as it was reported to CRD and therefore some of the specific data fieldscontained in the report may be blank if the information was not provided to CRD.Customer Dispute - Closed-No Action / Withdrawn / Dismissed / DeniedThis type of disclosure event involves (1) a consumer-initiated, investment-related arbitration or civil suit containingallegations of sales practice violations against the individual broker that was dismissed, withdrawn, or denied; or (2) aconsumer-initiated, investment-related written complaint containing allegations that the broker engaged in sales practiceviolations resulting in compensatory damages of at least $5,000, forgery, theft, or misappropriation, or conversion of fundsor securities, which was closed without action, withdrawn, or denied.Disclosure 1 of 1Reporting Source:BrokerEmploying firm whenactivities occurred which ledto the complaint:Allegations:SMITH BARNEYCOMPLAINT REGARDING AUCTION RATE SECURITIES ALLEGINGUNSUITABILITY FROM AUGUST 2007 THROUGH FEBRUARY 2008.Product Type:Other: AUCTION RATE SECURITIESAlleged Damages:$0.00Date Complaint Received:08/18/2008Complaint Pending?NoStatus:Status Date:11/24/2008Customer Complaint InformationWithdrawnIs this an oral complaint?NoIs this a written complaint?YesIs this an arbitration/CFTCreparation or civil litigation?No8©2019 FINRA. All rights reserved. Report about CHRISTOPHER F. SULLIVAN. www.finra.org/brokercheckUser GuidanceSettlement Amount:Individual ContributionAmount:9©2019 FINRA. All rights reserved. Report about CHRISTOPHER F. SULLIVAN. www.finra.org/brokercheckUser GuidanceEnd of ReportThis page is intentionally left blank.10©2019 FINRA. All rights reserved. Report about CHRISTOPHER F. SULLIVAN. BrokerCheck ReportLORRAINE DEE WELCHSection TitleReport SummaryBroker QualificationsRegistration and Employment HistoryCRD# 202597912 - 45Page(s) About BrokerCheck®BrokerCheck offers information on all current, and many former, registered securities brokers, and all current and formerregistered securities firms. FINRA strongly encourages investors to use BrokerCheck to check the background ofsecurities brokers and brokerage firms before deciding to conduct, or continue to conduct, business with them.āWhat is included in a BrokerCheck report?āBrokerCheck reports for individual brokers include information such as employment history, professionalqualifications, disciplinary actions, criminal convictions, civil judgments and arbitration awards. BrokerCheckreports for brokerage firms include information on a firm’s profile, history, and operations, as well as many of thesame disclosure events mentioned above.āPlease note that the information contained in a BrokerCheck report may include pending actions orallegations that may be contested, unresolved or unproven. In the end, these actions or allegations may beresolved in favor of the broker or brokerage firm, or concluded through a negotiated settlement with no admissionor finding of wrongdoing.āWhere did this information come from?āThe information contained in BrokerCheck comes from FINRA’s Central Registration Depository, orCRD® and is a combination of:Rinformation FINRA and/or the Securities and Exchange Commission (SEC) require brokers andbrokerage firms to submit as part of the registration and licensing process, andRinformation that regulators report regarding disciplinary actions or allegations against firms or brokers.āHow current is this information?āGenerally, active brokerage firms and brokers are required to update their professional and disciplinaryinformation in CRD within 30 days. Under most circumstances, information reported by brokerage firms, brokersand regulators is available in BrokerCheck the next business day.āWhat if I want to check the background of an investment adviser firm or investment adviserrepresentative?āTo check the background of an investment adviser firm or representative, you can search for the firm orindividual in BrokerCheck. If your search is successful, click on the link provided to view the available licensingand registration information in the SEC's Investment Adviser Public Disclosure (IAPD) website athttps://www.adviserinfo.sec.gov. In the alternative, you may search the IAPD website directly or contact your statesecurities regulator at http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/P455414.āAre there other resources I can use to check the background of investment professionals?āFINRA recommends that you learn as much as possible about an investment professional before decidingto work with them. Your state securities regulator can help you research brokers and investment adviserrepresentatives doing business in your state.āThank you for using FINRA BrokerCheck.For more information aboutFINRA, visit www.finra.org.Using this site/information meansthat you accept the FINRABrokerCheck Terms andConditions. A complete list ofTerms and Conditions can befound atFor additional information aboutthe contents of this report, pleaserefer to the User Guidance orwww.finra.org/brokercheck. Itprovides a glossary of terms and alist of frequently asked questions,as well as additional resources.brokercheck.finra.org LORRAINE D. WELCHCRD# 2025979Currently employed by and registered with thefollowing Firm(s):OPPENHEIMER & CO. INC.50 SOUTH SIXTH STREETSUITE 1300MINNEAPOLIS, MN 55402CRD# 249Registered with this firm since: 04/17/2012Report Summary for this BrokerThis report summary provides an overview of the broker's professional background and conduct. Additionalinformation can be found in the detailed report.Disclosure EventsAll individuals registered to sell securities or provideinvestment advice are required to disclose customercomplaints and arbitrations, regulatory actions,employment terminations, bankruptcy filings, andcriminal or civil judicial proceedings.Are there events disclosed about this broker?NoBroker QualificationsThis broker is registered with:9 Self-Regulatory Organizations19 U.S. states and territoriesThis broker has passed:0 Principal/Supervisory Exams3 General Industry/Product Exams1 State Securities Law ExamRegistration HistoryThis broker was previously registered with thefollowing securities firm(s):MORGAN STANLEY SMITH BARNEYCRD# 149777WAYZATA, MN06/2009 - 04/2012CITIGROUP GLOBAL MARKETS INC.CRD# 7059WAYZATA, MN10/1996 - 06/2009www.finra.org/brokercheckUser Guidance1©2019 FINRA. All rights reserved. Report about LORRAINE D. WELCH. www.finra.org/brokercheckUser GuidanceBroker QualificationsRegistrationsThis section provides the self-regulatory organizations (SROs) and U.S. states/territories the broker is currentlyregistered and licensed with, the category of each license, and the date on which it became effective. This section alsoprovides, for every brokerage firm with which the broker is currently employed, the address of each branch where thebroker works.This individual is currently registered with 9 SROs and is licensed in 19 U.S. states and territories through hisor her employer.Employment 1 of 1Firm Name:Main Office Address:Firm CRD#:OPPENHEIMER & CO. INC.24985 BROAD STREET22ND,24TH FLOORNEW YORK, NY 10004SRO Category Status DateFINRAGeneral Securities RepresentativeAPPROVED04/17/2012Cboe Exchange, Inc.General Securities RepresentativeAPPROVED04/17/2012NYSE American LLCGeneral Securities RepresentativeAPPROVED04/17/2012NYSE Arca, Inc.General Securities RepresentativeAPPROVED04/17/2012NYSE Chicago, Inc.General Securities RepresentativeAPPROVED04/17/2012Nasdaq ISE, LLCGeneral Securities RepresentativeAPPROVED04/17/2012Nasdaq PHLX LLCGeneral Securities RepresentativeAPPROVED04/17/2012Nasdaq Stock MarketGeneral Securities RepresentativeAPPROVED04/17/2012New York Stock ExchangeGeneral Securities RepresentativeAPPROVED04/17/2012U.S. State/TerritoryCategory Status DateCalifornia AgentAPPROVED03/30/2016Colorado AgentAPPROVED10/21/2013Delaware AgentAPPROVED10/20/2014Florida AgentAPPROVED04/17/2012Illinois AgentAPPROVED01/03/2013U.S. State/TerritoryCategory Status DateIndiana AgentAPPROVED02/11/2014Iowa AgentAPPROVED11/04/2013Kansas AgentAPPROVED08/09/2013Michigan AgentAPPROVED07/10/2017Minnesota AgentAPPROVED04/17/20122©2019 FINRA. All rights reserved. Report about LORRAINE D. WELCH. www.finra.org/brokercheckUser GuidanceBroker QualificationsEmployment 1 of 1, continuedU.S. State/TerritoryCategory Status DateMississippi AgentAPPROVED08/11/2016Missouri AgentAPPROVED10/24/2013Nebraska AgentAPPROVED04/17/2012Nevada AgentAPPROVED07/31/2015North Carolina AgentAPPROVED03/16/2016Ohio AgentAPPROVED09/11/2017Oklahoma AgentAPPROVED07/25/2013Texas AgentAPPROVED04/17/2012Wisconsin AgentAPPROVED10/20/2014Branch Office LocationsOPPENHEIMER & CO. INC.50 SOUTH SIXTH STREETSUITE 1300MINNEAPOLIS, MN 554023©2019 FINRA. All rights reserved. Report about LORRAINE D. WELCH. www.finra.org/brokercheckUser GuidanceBroker QualificationsIndustry Exams this Broker has PassedThis individual has passed 0 principal/supervisory exams, 3 general industry/product exams, and 1 statesecurities law exam.This section includes all securities industry exams that the broker has passed. Under limited circumstances, a brokermay attain a registration after receiving an exam waiver based on exams the broker has passed and/or qualifying workexperience. Any exam waivers that the broker has received are not included below.Exam Category DatePrincipal/Supervisory ExamsNo information reported.Exam Category DateGeneral Industry/Product ExamsSecurities Industry Essentials Examination10/01/2018SIEMunicipal Advisor Representative Qualification Exam08/23/2017Series 50General Securities Representative Examination10/07/1996Series 7Exam Category DateState Securities Law ExamsUniform Securities Agent State Law Examination11/14/1996Series 63Additional information about the above exams or other exams FINRA administers to brokers and other securitiesprofessionals can be found at www.finra.org/brokerqualifications/registeredrep/.4©2019 FINRA. All rights reserved. Report about LORRAINE D. WELCH. www.finra.org/brokercheckUser GuidanceRegistration and Employment HistoryRegistration HistoryRegistration Dates Firm Name CRD# Branch LocationThe broker previously was registered with the following firms:06/2009 - 04/2012 MORGAN STANLEY SMITH BARNEY 149777 WAYZATA, MN10/1996 - 06/2009 CITIGROUP GLOBAL MARKETS INC. 7059 WAYZATA, MNEmployment HistoryEmployment Dates Employer Name Employer LocationThis section provides up to 10 years of an individual broker's employment history as reported by the individual broker onthe most recently filed Form U4.Please note that the broker is required to provide this information only while registered with FINRA or a nationalsecurities exchange and the information is not updated via Form U4 after the broker ceases to be registered.Therefore, an employment end date of "Present" may not reflect the broker's current employment status.04/2012 - Present OPPENHEIMER & CO. INC. MINNEAPOLIS, MN06/2009 - 04/2012 MORGAN STANLEY SMITH BARNEY WAYZATA, MN12/1989 - 06/2009 CITIGROUP GLOBAL MARKETS INC. WAYZATA, MNOther Business ActivitiesThis section includes information, if any, as provided by the broker regarding other business activities the broker iscurrently engaged in either as a proprietor, partner, officer, director, employee, trustee, agent or otherwise. This sectiondoes not include non-investment related activity that is exclusively charitable, civic, religious or fraternal and isrecognized as tax exempt.No information reported.5©2019 FINRA. All rights reserved. Report about LORRAINE D. WELCH. www.finra.org/brokercheckUser GuidanceEnd of ReportThis page is intentionally left blank.6©2019 FINRA. All rights reserved. Report about LORRAINE D. WELCH. BrokerCheck ReportPAUL FRANCIS SULLIVANSection TitleReport SummaryBroker QualificationsRegistration and Employment HistoryDisclosure EventsCRD# 104742612 - 456Page(s) About BrokerCheck®BrokerCheck offers information on all current, and many former, registered securities brokers, and all current and formerregistered securities firms. FINRA strongly encourages investors to use BrokerCheck to check the background ofsecurities brokers and brokerage firms before deciding to conduct, or continue to conduct, business with them.āWhat is included in a BrokerCheck report?āBrokerCheck reports for individual brokers include information such as employment history, professionalqualifications, disciplinary actions, criminal convictions, civil judgments and arbitration awards. BrokerCheckreports for brokerage firms include information on a firm’s profile, history, and operations, as well as many of thesame disclosure events mentioned above.āPlease note that the information contained in a BrokerCheck report may include pending actions orallegations that may be contested, unresolved or unproven. In the end, these actions or allegations may beresolved in favor of the broker or brokerage firm, or concluded through a negotiated settlement with no admissionor finding of wrongdoing.āWhere did this information come from?āThe information contained in BrokerCheck comes from FINRA’s Central Registration Depository, orCRD® and is a combination of:Rinformation FINRA and/or the Securities and Exchange Commission (SEC) require brokers andbrokerage firms to submit as part of the registration and licensing process, andRinformation that regulators report regarding disciplinary actions or allegations against firms or brokers.āHow current is this information?āGenerally, active brokerage firms and brokers are required to update their professional and disciplinaryinformation in CRD within 30 days. Under most circumstances, information reported by brokerage firms, brokersand regulators is available in BrokerCheck the next business day.āWhat if I want to check the background of an investment adviser firm or investment adviserrepresentative?āTo check the background of an investment adviser firm or representative, you can search for the firm orindividual in BrokerCheck. If your search is successful, click on the link provided to view the available licensingand registration information in the SEC's Investment Adviser Public Disclosure (IAPD) website athttps://www.adviserinfo.sec.gov. In the alternative, you may search the IAPD website directly or contact your statesecurities regulator at http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/P455414.āAre there other resources I can use to check the background of investment professionals?āFINRA recommends that you learn as much as possible about an investment professional before decidingto work with them. Your state securities regulator can help you research brokers and investment adviserrepresentatives doing business in your state.āThank you for using FINRA BrokerCheck.For more information aboutFINRA, visit www.finra.org.Using this site/information meansthat you accept the FINRABrokerCheck Terms andConditions. A complete list ofTerms and Conditions can befound atFor additional information aboutthe contents of this report, pleaserefer to the User Guidance orwww.finra.org/brokercheck. Itprovides a glossary of terms and alist of frequently asked questions,as well as additional resources.brokercheck.finra.org PAUL F. SULLIVANCRD# 1047426Currently employed by and registered with thefollowing Firm(s):OPPENHEIMER & CO. INC.50 SOUTH SIXTH STREETSUITE 1300MINNEAPOLIS, MN 55402CRD# 249Registered with this firm since: 04/17/2012Report Summary for this BrokerThis report summary provides an overview of the broker's professional background and conduct. Additionalinformation can be found in the detailed report.Disclosure EventsAll individuals registered to sell securities or provideinvestment advice are required to disclose customercomplaints and arbitrations, regulatory actions,employment terminations, bankruptcy filings, andcriminal or civil judicial proceedings.Are there events disclosed about this broker?YesThe following types of disclosures have beenreported:TypeCountCustomer Dispute1Broker QualificationsThis broker is registered with:9 Self-Regulatory Organizations20 U.S. states and territoriesThis broker has passed:0 Principal/Supervisory Exams5 General Industry/Product Exams2 State Securities Law ExamsRegistration HistoryThis broker was previously registered with thefollowing securities firm(s):MORGAN STANLEY SMITH BARNEYCRD# 149777WAYZATA, MN06/2009 - 04/2012CITIGROUP GLOBAL MARKETS INC.CRD# 7059WAYZATA, MN02/1992 - 06/2009PAINEWEBBER INCORPORATEDCRD# 8174WEEHAWKEN, NJ04/1989 - 02/1992www.finra.org/brokercheckUser Guidance1©2019 FINRA. All rights reserved. Report about PAUL F. SULLIVAN. www.finra.org/brokercheckUser GuidanceBroker QualificationsRegistrationsThis section provides the self-regulatory organizations (SROs) and U.S. states/territories the broker is currentlyregistered and licensed with, the category of each license, and the date on which it became effective. This section alsoprovides, for every brokerage firm with which the broker is currently employed, the address of each branch where thebroker works.This individual is currently registered with 9 SROs and is licensed in 20 U.S. states and territories through hisor her employer.Employment 1 of 1Firm Name:Main Office Address:Firm CRD#:OPPENHEIMER & CO. INC.24985 BROAD STREET22ND,24TH FLOORNEW YORK, NY 10004SRO Category Status DateFINRAGeneral Securities RepresentativeAPPROVED04/17/2012FINRAGovernment Securities RepresentativeAPPROVED04/17/2012Cboe Exchange, Inc.General Securities RepresentativeAPPROVED04/17/2012NYSE American LLCGeneral Securities RepresentativeAPPROVED04/17/2012NYSE Arca, Inc.General Securities RepresentativeAPPROVED04/17/2012NYSE Chicago, Inc.General Securities RepresentativeAPPROVED04/17/2012Nasdaq ISE, LLCGeneral Securities RepresentativeAPPROVED04/17/2012Nasdaq PHLX LLCGeneral Securities RepresentativeAPPROVED04/17/2012Nasdaq Stock MarketGeneral Securities RepresentativeAPPROVED04/17/2012New York Stock ExchangeGeneral Securities RepresentativeAPPROVED04/17/2012U.S. State/TerritoryCategory Status DateCalifornia AgentAPPROVED09/26/2014Colorado AgentAPPROVED10/21/2013Delaware AgentAPPROVED10/20/2014Florida AgentAPPROVED04/17/2012U.S. State/TerritoryCategory Status DateIllinois AgentAPPROVED12/05/2012Indiana AgentAPPROVED02/11/2014Iowa AgentAPPROVED11/04/2013Kansas AgentAPPROVED08/09/20132©2019 FINRA. All rights reserved. Report about PAUL F. SULLIVAN. www.finra.org/brokercheckUser GuidanceBroker QualificationsEmployment 1 of 1, continuedU.S. State/TerritoryCategory Status DateMichigan AgentAPPROVED07/10/2017Minnesota AgentAPPROVED04/17/2012Mississippi AgentAPPROVED08/11/2016Missouri AgentAPPROVED10/24/2013Nebraska AgentAPPROVED04/17/2012Nevada AgentAPPROVED06/25/2015North Carolina AgentAPPROVED03/17/2016Ohio AgentAPPROVED09/12/2017Oklahoma AgentAPPROVED07/25/2013Texas AgentAPPROVED04/17/2012Utah AgentAPPROVED01/03/2019Wisconsin AgentAPPROVED10/20/2014Branch Office LocationsOPPENHEIMER & CO. INC.50 SOUTH SIXTH STREETSUITE 1300MINNEAPOLIS, MN 554023©2019 FINRA. All rights reserved. Report about PAUL F. SULLIVAN. www.finra.org/brokercheckUser GuidanceBroker QualificationsIndustry Exams this Broker has PassedThis individual has passed 0 principal/supervisory exams, 5 general industry/product exams, and 2 statesecurities law exams.This section includes all securities industry exams that the broker has passed. Under limited circumstances, a brokermay attain a registration after receiving an exam waiver based on exams the broker has passed and/or qualifying workexperience. Any exam waivers that the broker has received are not included below.Exam Category DatePrincipal/Supervisory ExamsNo information reported.Exam Category DateGeneral Industry/Product ExamsSecurities Industry Essentials Examination10/01/2018SIEMunicipal Advisor Representative Qualification Exam01/28/2016Series 50Interest Rate Options Examination01/14/1986Series 5National Commodity Futures Examination10/11/1985Series 3General Securities Representative Examination05/15/1982Series 7Exam Category DateState Securities Law ExamsUniform Investment Adviser Law Examination08/21/1991Series 65Uniform Securities Agent State Law Examination05/28/1982Series 63Additional information about the above exams or other exams FINRA administers to brokers and other securitiesprofessionals can be found at www.finra.org/brokerqualifications/registeredrep/.4©2019 FINRA. All rights reserved. Report about PAUL F. SULLIVAN. www.finra.org/brokercheckUser GuidanceRegistration and Employment HistoryRegistration HistoryRegistration Dates Firm Name CRD# Branch LocationThe broker previously was registered with the following firms:06/2009 - 04/2012 MORGAN STANLEY SMITH BARNEY 149777 WAYZATA, MN02/1992 - 06/2009 CITIGROUP GLOBAL MARKETS INC. 7059 WAYZATA, MN04/1989 - 02/1992 PAINEWEBBER INCORPORATED 8174 WEEHAWKEN, NJ06/1989 - 04/1990DREXEL BURNHAM LAMBERT GOVERNMENTSECURITIES INC.1972708/1984 - 05/1989DREXEL BURNHAM LAMBERTINCORPORATED732305/1982 - 08/1984MERRILL LYNCH, PIERCE, FENNER & SMITHINCORPORATED7691Employment HistoryEmployment Dates Employer Name Employer LocationThis section provides up to 10 years of an individual broker's employment history as reported by the individual broker onthe most recently filed Form U4.Please note that the broker is required to provide this information only while registered with FINRA or a nationalsecurities exchange and the information is not updated via Form U4 after the broker ceases to be registered.Therefore, an employment end date of "Present" may not reflect the broker's current employment status.04/2012 - Present OPPENHEIMER & CO. INC. MINNEAPOLIS, MN06/2009 - 04/2012 MORGAN STANLEY SMITH BARNEY WAYZATA, MN01/1992 - 06/2009 CITIGROUP GLOBAL MARKETS INC. WAYZATA, MNOther Business ActivitiesThis section includes information, if any, as provided by the broker regarding other business activities the broker iscurrently engaged in either as a proprietor, partner, officer, director, employee, trustee, agent or otherwise. This sectiondoes not include non-investment related activity that is exclusively charitable, civic, religious or fraternal and isrecognized as tax exempt.No information reported.5©2019 FINRA. All rights reserved. Report about PAUL F. SULLIVAN. www.finra.org/brokercheckUser GuidanceDisclosure EventsWhat you should know about reported disclosure events:1.All individuals registered to sell securities or provide investment advice are required to disclose customercomplaints and arbitrations, regulatory actions, employment terminations, bankruptcy filings, and criminal or civiljudicial proceedings.2.Certain thresholds must be met before an event is reported to CRD, for example:RA law enforcement agency must file formal charges before a broker is required to disclose a particularcriminal event.RA customer dispute must involve allegations that a broker engaged in activity that violates certain rulesor conduct governing the industry and that the activity resulted in damages of at least $5,000.R3.Disclosure events in BrokerCheck reports come from different sources:RAs mentioned at the beginning of this report, information contained in BrokerCheck comes from brokers,brokerage firms and regulators. When more than one of these sources reports information for the samedisclosure event, all versions of the event will appear in the BrokerCheck report. The different versionswill be separated by a solid line with the reporting source labeled.R4.There are different statuses and dispositions for disclosure events:RA disclosure event may have a status ofpending, on appeal,orfinal.†A "pending" event involves allegations that have not been proven or formally adjudicated.†An event that is "on appeal" involves allegations that have been adjudicated but are currentlybeing appealed.†A "final" event has been concluded and its resolution is not subject to change.RA final event generally has a disposition ofadjudicated, settledorotherwise resolved.†An "adjudicated" matter includes a disposition by (1) a court of law in a criminal or civil matter, or(2) an administrative panel in an action brought by a regulator that is contested by the partycharged with some alleged wrongdoing.†A "settled" matter generally involves an agreement by the parties to resolve the matter. Pleasenote that brokers and brokerage firms may choose to settle customer disputes or regulatorymatters for business or other reasons.†A "resolved" matter usually involves no payment to the customer and no finding of wrongdoingon the part of the individual broker. Such matters generally involve customer disputes.For your convenience, below is a matrix of the number and status of disclosure events involving this broker.Further information regarding these events can be found in the subsequent pages of this report. You also maywish to contact the broker to obtain further information regarding these events.Final On AppealPendingCustomer Dispute 0 1 N/A6©2019 FINRA. All rights reserved. Report about PAUL F. SULLIVAN. www.finra.org/brokercheckUser Guidance7©2019 FINRA. All rights reserved. Report about PAUL F. SULLIVAN. www.finra.org/brokercheckUser GuidanceDisclosure Event DetailsWhen evaluating this information, please keep in mind that a discloure event may be pending or involve allegationsthat are contested and have not been resolved or proven. The matter may, in the end, be withdrawn, dismissed,resolved in favor of the broker, or concluded through a negotiated settlement for certain business reasons (e.g., tomaintain customer relationships or to limit the litigation costs associated with disputing the allegations) with noadmission or finding of wrongdoing.This report provides the information exactly as it was reported to CRD and therefore some of the specific data fieldscontained in the report may be blank if the information was not provided to CRD.Customer Dispute - Closed-No Action / Withdrawn / Dismissed / DeniedThis type of disclosure event involves (1) a consumer-initiated, investment-related arbitration or civil suit containingallegations of sales practice violations against the individual broker that was dismissed, withdrawn, or denied; or (2) aconsumer-initiated, investment-related written complaint containing allegations that the broker engaged in sales practiceviolations resulting in compensatory damages of at least $5,000, forgery, theft, or misappropriation, or conversion of fundsor securities, which was closed without action, withdrawn, or denied.Disclosure 1 of 1Reporting Source:BrokerEmploying firm whenactivities occurred which ledto the complaint:Allegations:SMITH BARNEYCOMPLAINT REGARDING AUCTION RATE SECURITIES ALLEGINGUNSUITABILITY FROM AUGUST 2007 THROUGH FEBRUARY 2008.Product Type:OtherOther Product Type(s):AUCTION RATE SECURITIESAlleged Damages:$0.00Date Complaint Received:08/18/2008Complaint Pending?NoStatus:Status Date:11/24/2008Settlement Amount:Individual ContributionAmount:Customer Complaint InformationWithdrawn8©2019 FINRA. All rights reserved. Report about PAUL F. SULLIVAN. www.finra.org/brokercheckUser GuidanceEnd of ReportThis page is intentionally left blank.9©2019 FINRA. All rights reserved. Report about PAUL F. SULLIVAN. BEHZAD MANSOURI Desk manager and supervising principal responsible for fixed income sales to municipal entities and government agencies, including coordination of salespersons with such clients, improving the firm platform to serve their specific need and ensure compliance is maintained within the new regulatory framework. EXPERIENCE: OPPENHEIMER & Co, New York, NY 1/14-Present Managing Director, Head of Fixed Income Sales for Government Agencies and Municipal Entities Sales manager and supervisor responsible for a team covering municipal entity and government agency clients • Institutional sales coverage for credit, govy/MBS and HY-EM products, both USD & EUR • Advising on ~$70mm in custody of investments for various municipal entities CREDIT AGRICOLE CORPORATE & INVESTMENT BANK, New York, NY 1/12-6/13 Director, Rates Sales - Institutional Client Coverage Interest rate derivatives: Swaps, Swaptions, Caps/Floors, Basis - Futures/OIS, Cross-currency swaps. USD, EUR, JPY • Cash: Treasuries, TIPS, Bills, Supranationals, Repo. USD, EUR • Clients include Hedge Funds, Asset Managers, Insurers & Banks/CBs/BDs. • Developed total return swap nd structured repak trades for select clients. BNY MELLON - GLOBAL MARKETS, New York, NY 9/06-12/11 Vice President, Rates Derivatives Sales - Institutional Client Coverage Interest rate derivatives: Swaps, Swaptions, Caps/Floors, Basis swaps, Cross-currency swaps. USD, EUR, JPY • Equity derivatives: OTC call/put structures, variance swaps, TRS, hybrid baskets, equity-linked notes • FX Options, Balance sheet trades involving total return swaps, CVA and PRDC hedging. • Clients include Asset Managers, Insurers, Mortgage Servicers, REITS, BDs & Hedge Funds. PNC CAPITAL MARKETS, PNC BANK, New York, NY 9/03-8/06 Managing Director, Head of Institutional Equity Derivatives OTC derivatives: calls/puts, spread/capped options, variance swaps, TRS, barrier options. • Established platform for structured notes and equity-linked CDs using vanilla and exotic options. • Responsible for structuring and sales to Corporates, Pension Funds, Insurers, Asset Managers and Endowments. 7/98-6/05 BARCLAYS CAPITAL, BARCLAYS BANK, London, UK Director, Structured Product Solutions (9/03-6/05) • Credit Derivatives: Single-tranche CDS, Index CDS, Synthetic CDOs, Nth-to-Default Baskets • Alternatives: CPPI Structures, Leveraged Funds, Gap Risk, Commodity Baskets and Commodity-Linked CDOs. • Interest Rate Derivatives: Swaps, Swaptions and Inflation Swaps. Range Accrual notes • Equity Derivatives: Exotic options, variance swaps, TRS, dividend swaps, hybrids baskets. • Responsible for distribution of structured products into Holland, covering all institutional clients. Director & Co-Head, Portfolio Strategy Gro p (7/98-8/03) • Generate and execute relative value, directional, ALM and tracking portfolio trades for institutional investors. • Methods include portfolio optimization and tracking error minimization, inclusive of fi ed income research. • Created a running Model European Credit Portfolio with Credit Research. • Led the development of Barclays Portfolio Analytics and Optimization System while managing five portfolio analysts. MERRILL LYNCH & Co., New York & London, UK 7/98-3/02 Vice President, Portfolio Strategy Group Senior portfolio strategist working with Hedge Fund, Asset Manager, Pension Fund and Insurance clients. • Analyzed and executed portfolio trades in Rates and Credit using portfolio optimization and fixed income research. • Credit Magazine 2001 Analyst of the Year (Best Index Provider ), Euromoney Magazine #1 Credit Index Provider in Europe. EDUCATION: COLUMBIA UNIVERSITY, New York, NY M.A. Degree, Mathematical Finance. May 2010, Department of Mathematics, Coursework included derivative pricing, theory, advanced probability, statistical analysis, quantitative investment management B.A. Degree, Econo ics; Concentration-Mathematic . Dece ber 1996 Honors: Robert Bradbury Scholarship in Mathematics, General Studies Scholarship & Dean s List, Mathematics T.A. SKILLS: * Computer Systems: Bloomberg Derivative Analytics, Excel-based pricing models, VBA, RLib, Reuters ACTIVITIES: * Hobbies include golf, tennis, skiing and piano. Former NYC Paramedic and Volunteer Firefighter * Series 24, 7, 63 Registered BrokerCheck ReportOPPENHEIMER & CO. INC.Section TitleReport SummaryFirm HistoryCRD# 249111Firm Profile 2 - 10Page(s)Firm Operations 12 - 20Disclosure Events 21 About BrokerCheck®BrokerCheck offers information on all current, and many former, registered securities brokers, and all current and formerregistered securities firms. FINRA strongly encourages investors to use BrokerCheck to check the background ofsecurities brokers and brokerage firms before deciding to conduct, or continue to conduct, business with them.āWhat is included in a BrokerCheck report?āBrokerCheck reports for individual brokers include information such as employment history, professionalqualifications, disciplinary actions, criminal convictions, civil judgments and arbitration awards. BrokerCheckreports for brokerage firms include information on a firm’s profile, history, and operations, as well as many of thesame disclosure events mentioned above.āPlease note that the information contained in a BrokerCheck report may include pending actions orallegations that may be contested, unresolved or unproven. In the end, these actions or allegations may beresolved in favor of the broker or brokerage firm, or concluded through a negotiated settlement with noadmission or finding of wrongdoing.āWhere did this information come from?āThe information contained in BrokerCheck comes from FINRA’s Central Registration Depository, orCRD® and is a combination of:Rinformation FINRA and/or the Securities and Exchange Commission (SEC) require brokers andbrokerage firms to submit as part of the registration and licensing process, andRinformation that regulators report regarding disciplinary actions or allegations against firms or brokers.āHow current is this information?āGenerally, active brokerage firms and brokers are required to update their professional and disciplinaryinformation in CRD within 30 days. Under most circumstances, information reported by brokerage firms, brokersand regulators is available in BrokerCheck the next business day.āWhat if I want to check the background of an investment adviser firm or investment adviserrepresentative?āTo check the background of an investment adviser firm or representative, you can search for the firm orindividual in BrokerCheck. If your search is successful, click on the link provided to view the available licensingand registration information in the SEC's Investment Adviser Public Disclosure (IAPD) website athttps://www.adviserinfo.sec.gov. In the alternative, you may search the IAPD website directly or contact yourstate securities regulator at http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/P455414.āAre there other resources I can use to check the background of investment professionals?āFINRA recommends that you learn as much as possible about an investment professional beforedeciding to work with them. Your state securities regulator can help you research brokers and investment adviserrepresentatives doing business in your state.āThank you for using FINRA BrokerCheck.For more information aboutFINRA, visit www.finra.org.Using this site/information meansthat you accept the FINRABrokerCheck Terms andConditions. A complete list ofTerms and Conditions can befound atFor additional information aboutthe contents of this report, pleaserefer to the User Guidance orwww.finra.org/brokercheck. Itprovides a glossary of terms and alist of frequently asked questions,as well as additional resources.brokercheck.finra.org OPPENHEIMER & CO. INC.CRD# 249SEC# 8-4077Main Office Location85 BROAD STREET22ND,24TH FLOORNEW YORK, NY 10004Regulated by FINRA New York OfficeMailing Address85 BROAD STREET22ND FLOORNY, NY 10004This firm is a brokerage firm and an investmentadviser firm. For more information aboutinvestment adviser firms, visit the SEC'sInvestment Adviser Public Disclosure website at:Business Telephone Number212 668-8000https://www.adviserinfo.sec.govReport Summary for this FirmThis report summary provides an overview of the brokerage firm. Additional information for this firm can be foundin the detailed report.Disclosure EventsBrokerage firms are required to disclose certaincriminal matters, regulatory actions, civil judicialproceedings and financial matters in which the firm orone of its control affiliates has been involved.Are there events disclosed about this firm?YesThe following types of disclosures have beenreported:TypeCountRegulatory Event 92Arbitration 172Bond 2Firm ProfileThis firm is classified as a corporation.This firm was formed in New York on 12/23/1954.Its fiscal year ends in December.Firm HistoryInformation relating to the brokerage firm's historysuch as other business names and successions(e.g., mergers, acquisitions) can be found in thedetailed report.Firm OperationsIs this brokerage firm currently suspended with anyregulator?NoThis firm conducts 19 types of businesses.This firm is affiliated with financial or investmentinstitutions.This firm does not have referral or financialarrangements with other brokers or dealers.This firm is registered with:• the SEC• 9 Self-Regulatory Organizations• 52 U.S. states and territorieswww.finra.org/brokercheckUser Guidance1©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceThis firm is classified as a corporation.This firm was formed in New York on 12/23/1954.CRD#This section provides the brokerage firm's full legal name, "Doing Business As" name, business and mailingaddresses, telephone number, and any alternate name by which the firm conducts business and where such name isused.Firm ProfileFirm Names and LocationsIts fiscal year ends in December.OPPENHEIMER & CO. INC.SEC#2498-4077Main Office LocationMailing AddressBusiness Telephone NumberDoing business as OPPENHEIMER & CO. INC.212 668-8000Regulated by FINRA New York Office85 BROAD STREET22ND,24TH FLOORNEW YORK, NY 1000485 BROAD STREET22ND FLOORNY, NY 10004Other Names of this FirmName Where is it usedCAROLAN DIVISION OF OPPENHEIMER & CO. INC. RIFAHNESTOCK ASSET MANAGEMENT DIVISION OF OPPENHEIMER &CO. INC.NYFAHNESTOCK DIVISION OF OPPENHEIMER & CO. INC. NYFIRST OF MICHIGAN DIVISION MIPEARL STREET INVESTMENT MANAGEMENT , DIVISION OFOPPENHEIMER & CNYREPARIAN PARTNERS, DIVISION OF OPPENHEIMER & CO. INC. RI2©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser Guidance3©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceThis section provides information relating to all direct owners and executive officers of the brokerage firm.Direct Owners and Executive OfficersFirm ProfilePositionPercentage of OwnershipIs this a public reportingcompany?Position Start DateDoes this owner direct themanagement or policies ofthe firm?VINER FINANCE INC.PARENT CO.75% or moreNoDomestic Entity10/1983YesIs this a domestic or foreignentity or an individual?Legal Name & CRD# (if any):PositionPercentage of OwnershipIs this a public reportingcompany?Position Start DateDoes this owner direct themanagement or policies ofthe firm?ALFANO, JEFFREYDIRECTOR/E.V.P/CFOLess than 5%NoIndividual04/2006Yes5127693Is this a domestic or foreignentity or an individual?Legal Name & CRD# (if any):PositionPosition Start DateBENEDETTO, JOHN ANTHONYE.V.P DIRECTOR OF OPERATIONSIndividual04/2014710318Is this a domestic or foreignentity or an individual?Legal Name & CRD# (if any):4©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDirect Owners and Executive Officers (continued)Firm ProfilePercentage of OwnershipIs this a public reportingcompany?Does this owner direct themanagement or policies ofthe firm?Less than 5%NoYesPositionPercentage of OwnershipIs this a public reportingcompany?Position Start DateDoes this owner direct themanagement or policies ofthe firm?CAPEZZUTO, JAMES ANDREWIA-CCOLess than 5%NoIndividual02/2015No1845909Is this a domestic or foreignentity or an individual?Legal Name & CRD# (if any):PositionPercentage of OwnershipIs this a public reportingcompany?Position Start DateDoes this owner direct themanagement or policies ofthe firm?HARRINGTON, EDWARD PATRICKEXECUTIVE VICE PRESIDENT - NATIONAL SALESLess than 5%NoIndividual02/2019Yes2566682Is this a domestic or foreignentity or an individual?Legal Name & CRD# (if any):LOWENTHAL, ALBERT GRINSFELDERLegal Name & CRD# (if any):5©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDirect Owners and Executive Officers (continued)Firm ProfilePositionPercentage of OwnershipIs this a public reportingcompany?Position Start DateDoes this owner direct themanagement or policies ofthe firm?CHMN/DIR/CEO - OWNS 100% OF PHASE II FIN'LLess than 5%NoIndividual10/1985Yes313519Is this a domestic or foreignentity or an individual?PositionPercentage of OwnershipIs this a public reportingcompany?Position Start DateDoes this owner direct themanagement or policies ofthe firm?LOWENTHAL, ROBERT STEVENDIRECTORLess than 5%NoIndividual04/2018Yes1639913Is this a domestic or foreignentity or an individual?Legal Name & CRD# (if any):PositionPercentage of OwnershipPosition Start DateMCGUIRE, JOHN THOMASMANAGING DIRECTOR/DEPUTY GENERAL COUNSEL- DIRECTOR OFLITIGATIONLess than 5%Individual01/20071123013Is this a domestic or foreignentity or an individual?Legal Name & CRD# (if any):6©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDirect Owners and Executive Officers (continued)Firm ProfileIs this a public reportingcompany?Does this owner direct themanagement or policies ofthe firm?NoNoPositionPercentage of OwnershipIs this a public reportingcompany?Position Start DateDoes this owner direct themanagement or policies ofthe firm?MCNAMARA, DENNIS PATRICKE.V.P./CLO/SECRETARYLess than 5%NoIndividual01/2006Yes2938486Is this a domestic or foreignentity or an individual?Legal Name & CRD# (if any):PositionPercentage of OwnershipIs this a public reportingcompany?Position Start DateDoes this owner direct themanagement or policies ofthe firm?SIEGEL, DOUGLAS THORNLEYCHIEF COMPLIANCE OFFICERLess than 5%NoIndividual02/2016Yes1143272Is this a domestic or foreignentity or an individual?Legal Name & CRD# (if any):SPAULDING, LAWRENCE PETER709233Legal Name & CRD# (if any):7©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDirect Owners and Executive Officers (continued)Firm ProfilePositionPercentage of OwnershipIs this a public reportingcompany?Position Start DateDoes this owner direct themanagement or policies ofthe firm?DIRECTORLess than 5%NoIndividual08/2003YesIs this a domestic or foreignentity or an individual?8©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceThis section provides information relating to any indirect owners of the brokerage firm.Indirect OwnersFirm ProfileE.A. VINER INTERNATIONAL CO.HOLDING CO.VINER FINANCE INC.75% or moreDomestic Entity10/1983YesLegal Name & CRD# (if any):Is this a domestic or foreignentity or an individual?Company through whichindirect ownership isestablishedRelationship to Direct OwnerRelationship EstablishedPercentage of OwnershipDoes this owner direct themanagement or policies ofthe firm?Is this a public reportingcompany?LOWENTHAL, ALBERT GRINSFELDEROWNS 100%PHASE II FINANCIAL INC.75% or moreIndividual10/1985Yes313519Legal Name & CRD# (if any):Is this a domestic or foreignentity or an individual?Company through whichindirect ownership isestablishedRelationship to Direct OwnerRelationship EstablishedPercentage of OwnershipDoes this owner direct themanagement or policies ofthe firm?Is this a public reportingcompany?OPPENHEIMER HOLDINGS INC.Domestic EntityLegal Name & CRD# (if any):Is this a domestic or foreign9©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceIndirect Owners (continued)Firm ProfileCOMMON STOCKE.A. VINER INTERNATIONAL CO.75% or moreYes10/1983Yesentity or an individual?Company through whichindirect ownership isestablishedRelationship to Direct OwnerRelationship EstablishedPercentage of OwnershipDoes this owner direct themanagement or policies ofthe firm?Is this a public reportingcompany?PHASE II FINANCIAL INC.OWNS CLASS B VOTING STOCK OF OPPENHEIMER HOLDINGS.OPPENHEIMER HOLDINGS75% or moreForeign Entity10/1985YesLegal Name & CRD# (if any):Is this a domestic or foreignentity or an individual?Company through whichindirect ownership isestablishedRelationship to Direct OwnerRelationship EstablishedPercentage of OwnershipDoes this owner direct themanagement or policies ofthe firm?Is this a public reportingcompany?10©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceFirm HistoryThis section provides information relating to any successions (e.g., mergers, acquisitions) involving the firm.No information reported.11©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceFirm OperationsRegistrationsThis section provides information about the regulators (Securities and Exchange Commission (SEC), self-regulatoryorganizations (SROs), and U.S. states and territories) with which the brokerage firm is currently registered andlicensed, the date the license became effective, and certain information about the firm's SEC registration.This firm is currently registered with the SEC, 9 SROs and 52 U.S. states and territories.SEC Registration QuestionsThis firm is registered with the SEC as:A broker-dealer:A broker-dealer and government securities broker or dealer:A government securities broker or dealer only:This firm has ceased activity as a government securities broker or dealer:YesYesNoNoFederal Regulator Status Date EffectiveSEC Approved 03/26/1955Self-Regulatory Organization Status Date EffectiveFINRA Approved 03/22/1945Cboe Exchange, Inc. Approved 06/17/1981NYSE American LLC Approved 02/25/1988NYSE Arca, Inc. Approved 02/22/2008NYSE Chicago, Inc. Approved 11/21/1981Nasdaq ISE, LLC Approved 03/17/2004Nasdaq PHLX LLC Approved 08/01/2008Nasdaq Stock Market Approved 07/12/2006New York Stock Exchange Approved 11/17/198212©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceFirm OperationsRegistrations (continued)U.S. States &TerritoriesStatus Date EffectiveAlabama Approved 10/29/1981Alaska Approved 01/18/1994Arizona Approved 11/15/1984Arkansas Approved 01/23/1986California Approved 07/29/1980Colorado Approved 02/01/1983Connecticut Approved 07/01/1971Delaware Approved 04/10/1984District of Columbia Approved 06/26/1986Florida Approved 04/27/1983Georgia Approved 11/05/1982Hawaii Approved 08/20/1984Idaho Approved 08/28/1984Illinois Approved 10/28/1980Indiana Approved 10/21/1981Iowa Approved 07/15/1983Kansas Approved 05/24/1984Kentucky Approved 04/30/1984Louisiana Approved 04/20/1983Maine Approved 02/15/1984Maryland Approved 10/03/1981Massachusetts Approved 07/31/1981Michigan Approved 02/03/1983Minnesota Approved 07/15/1982Mississippi Approved 05/29/1983Missouri Approved 07/18/1983Montana Approved 05/03/1984Nebraska Approved 10/29/1984Nevada Approved 07/19/1983New Hampshire Approved 02/02/1983New Jersey Approved 07/18/1983New Mexico Approved 10/07/1981New York Approved 01/02/1985U.S. States &TerritoriesStatusDate EffectiveNorth Carolina Approved 07/06/1984North Dakota Approved 12/01/1984Ohio Approved 01/22/1993Oklahoma Approved 05/01/1984Oregon Approved 05/14/1984Pennsylvania Approved 04/11/1972Puerto Rico Approved 10/09/1984Rhode Island Approved 02/01/1983South Carolina Approved 06/05/1984South Dakota Approved 10/22/1985Tennessee Approved 04/11/1984Texas Approved 07/25/1983Utah Approved 04/02/1985Vermont Approved 05/10/1984Virginia Approved 08/03/1982Washington Approved 07/19/1984West Virginia Approved 09/18/1984Wisconsin Approved 03/05/1980Wyoming Approved 08/20/198413©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceFirm OperationsTypes of BusinessThis section provides the types of business, including non-securities business, the brokerage firm is engaged in orexpects to be engaged in.Other Types of BusinessThis firm does effect transactions in commodities, commodity futures, or commodity options.This firm does not engage in other non-securities business.Non-Securities Business Description:This firm currently conducts 19 types of businesses.Types of BusinessExchange member engaged in exchange commission business other than floor activitiesBroker or dealer making inter-dealer markets in corporation securities over-the-counterBroker or dealer retailing corporate equity securities over-the-counterBroker or dealer selling corporate debt securitiesUnderwriter or selling group participant (corporate securities other than mutual funds)Mutual fund retailerU S. government securities dealerU S. government securities brokerMunicipal securities dealerMunicipal securities brokerBroker or dealer selling variable life insurance or annuitiesPut and call broker or dealer or option writerInvestment advisory servicesBroker or dealer selling tax shelters or limited partnerships in primary distributionsBroker or dealer selling tax shelters or limited partnerships in the secondary marketTrading securities for own accountPrivate placements of securitiesBroker or dealer selling interests in mortgages or other receivablesOther - MUNICIPAL ADVISORS14©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceFirm OperationsClearing ArrangementsThis firm does hold or maintain funds or securities or provide clearing services for other broker-dealer(s).Introducing ArrangementsThis firm does not refer or introduce customers to other brokers and dealers.15©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceFirm OperationsIndustry ArrangementsThis firm does not have books or records maintained by a third party.This firm does have accounts, funds, or securities maintained by a third party.This firm does have customer accounts, funds, or securities maintained by a third party.This firm does not have individuals who control its management or policies through agreement.This firm does not have individuals who wholly or partly finance the firm's business.Control Persons/FinancingName:R.J O'BRIEN & ASSOCIATESBusiness Address:555 WEST JACKSON BLVD.CHICAGO, IL 60601Effective Date:09/29/1995Description:R.J O'BRIEN IS A CLEARING MEMBER OF ALL FUTURES EXCHANGESAND PROVIDES OMNIBUS CLEARING FOR COMPANY.Name:R.J. O'BRIEN & ASSOCIATESBusiness Address:555 WEST JACKSON BLVD.CHICAGO, IL 60601Effective Date:09/29/1995Description:R.J O'BRIEN THROUGH ITS OMNIBUS ACCOUNT HOLDS SEGREGATEDFUNDS, ELIGIBLE SECURITIES AND COMMODITY POSTIONS FORCLIENTS OF COMPANY.16©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceFirm OperationsOrganization AffiliatesThis section provides information on control relationships the firm has with other firms in the securities, investmentadvisory, or banking business.This firm is, directly or indirectly:· in control of· controlled by· or under common control withthe following partnerships, corporations, or other organizations engaged in the securities or investmentadvisory business.YesYesISRAELYes01/01/200850 DIZENGOFF STREETTEL AVIV, ISRAELOPPENHEIMER ISRAEL LTD. is controlled by the firm.APPLICANT OWNS 100% OF THE VOTING STOCK OF OPPENHEIMERISRAEL. APPLICANT ALSO PERFORMS CLEARING FUNCTIONS FOROPPENHEIMER ISRAEL.Description:Investment AdvisoryActivities:Securities Activities:Country:Foreign Entity:Effective Date:Business Address:YesYesHONG KONGYes11/01/20085/F HENLEY BLDG5 QUEENS ROAD ENTRALHONG KONG, CHINAOPPENHEIMER INVESTMENTS ASIA LTD. is under common control with the firm.UNDER COMMON OWNERSHIP OF OPPENHEIMER HOLDINGS INC. THEAPPLICANT. ALSO PERFORMS CLEARING FUNCTIONS FOR OPPENHEIMERASIA.Description:Investment AdvisoryActivities:Securities Activities:Country:Foreign Entity:Effective Date:Business Address:17©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceFirm OperationsOrganization Affiliates (continued)YesYesUKYes09/01/20086 GRACECHURCH STREETLONDON, ENGLAND EC3VOATOPPENHEIMER EUROPE LTD. is under common control with the firm.UNDER COMMON OWNERSHIP OF OPPENHEIMER HOLDINGS INC. THEAPPLICANT. ALSO PERFORMS CLEARING FUNCTIONS FOR OPPENHEIMEREUROPE.Description:Investment AdvisoryActivities:Securities Activities:Country:Foreign Entity:Effective Date:Business Address:YesNoNo06/06/200685 BROAD STREETNEW YORK, NY 10004140485OPPENHEIMER ALTERNATIVE INVESTMENT MANAGEMENT, LLC is under common control with the firm.UNDER COMMON OWNERSHIP OF OPPENHEIMER HOLDINGS INC.Description:Investment AdvisoryActivities:Securities Activities:Country:Foreign Entity:Effective Date:Business Address:CRD #:No12/01/1999200 PARK AVENUE24TH FLOORNEW YORK, NY 10166108178ADVANTAGE ADVISERS MULTI-MANAGER, L.L.C. is under common control with the firm.Country:Foreign Entity:Effective Date:Business Address:CRD #:18©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceFirm OperationsOrganization Affiliates (continued)YesNoUNDER COMMON OWNERSHIP OF OPPENHEIMER HOLDINGS INC.Description:Investment AdvisoryActivities:Securities Activities:YesNoNo01/01/200385 BROAD STREETNEW YORK, NY 10004108180ADVANTAGE ADVISERS MANAGEMENT, LLC is under common control with the firm.UNDER COMMON OWNERSHIP OF OPPENHEIMER HOLDINGS INC.Description:Investment AdvisoryActivities:Securities Activities:Country:Foreign Entity:Effective Date:Business Address:CRD #:YesNoNo10/13/200485 BROAD STREETNEW YORK, NY 10004133243OPPENHEIMER INVESTMENT MANAGEMENT LLC is under common control with the firm.UNDER COMMON OWNERSHIP OF OPPENHEIMER HOLDINGS INC.Description:Investment AdvisoryActivities:Securities Activities:Country:Foreign Entity:Effective Date:Business Address:CRD #:85 BROAD STREET105559OPPENHEIMER ASSET MANAGEMENT is under common control with the firm.Business Address:CRD #:19©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceFirm OperationsOrganization Affiliates (continued)YesNoNo01/28/2003NEW YORK, NY 10004UNDER COMMON OWNERSHIP OF OPPENHEIMER HOLDINGS INC.Description:Investment AdvisoryActivities:Securities Activities:Country:Foreign Entity:Effective Date:NoYesNo11/17/1994375 RARITAN CENTER PKWYEDISON, NJ 0883737674FREEDOM INVESTMENTS, INC. is controlled by the firm.OPPENHEIMER & CO. INC. OWNS 100% OF COMMON STOCK OF FREEDOMAND CLEARS FOR FREEDOM ON A FULLY DISCLOSED BASIS.Description:Investment AdvisoryActivities:Securities Activities:Country:Foreign Entity:Effective Date:Business Address:CRD #:This firm is not directly or indirectly, controlled by the following:· bank holding company· national bank· state member bank of the Federal Reserve System· state non-member bank· savings bank or association· credit union· or foreign bank20©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisclosure EventsAll firms registered to sell securities or provide investment advice are required to disclose regulatory actions, criminal orcivil judicial proceedings, and certain financial matters in which the firm or one of its control affiliates has been involved.For your convenience, below is a matrix of the number and status of disclosure events involving this brokerage firm orone of its control affiliates. Further information regarding these events can be found in the subsequent pages of thisreport.Final On AppealPendingRegulatory Event 0 92 0Arbitration N/A 172 N/ABond N/A 2 N/A21©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisclosure Event DetailsWhat you should know about reported disclosure events:1.BrokerCheck provides details for any disclosure event that was reported in CRD. It also includessummary information regarding FINRA arbitration awards in cases where the brokerage firm wasnamed as a respondent.2.Certain thresholds must be met before an event is reported to CRD, for example:RA law enforcement agency must file formal charges before a brokerage firm is required to disclose aparticular criminal event.3.Disclosure events in BrokerCheck reports come from different sources:RDisclosure events for this brokerage firm were reported by the firm and/or regulators. When the firmand a regulator report information for the same event, both versions of the event will appear in theBrokerCheck report. The different versions will be separated by a solid line with the reporting sourcelabeled.4.There are different statuses and dispositions for disclosure events:RA disclosure event may have a status ofpending, on appeal,orfinal.†A "pending" event involves allegations that have not been proven or formally adjudicated.†An event that is "on appeal" involves allegations that have been adjudicated but are currentlybeing appealed.†A "final" event has been concluded and its resolution is not subject to change.RA final event generally has a disposition ofadjudicated, settledorotherwise resolved.†An "adjudicated" matter includes a disposition by (1) a court of law in a criminal or civil matter,or (2) an administrative panel in an action brought by a regulator that is contested by the partycharged with some alleged wrongdoing.†A "settled" matter generally involves an agreement by the parties to resolve the matter.Please note that firms may choose to settle customer disputes or regulatory matters forbusiness or other reasons.†A "resolved" matter usually involves no payment to the customer and no finding ofwrongdoing on the part of the individual broker. Such matters generally involve customerdisputes.5.You may wish to contact the brokerage firm to obtain further information regarding any of thedisclosure events contained in this BrokerCheck report.Regulatory - FinalThis type of disclosure event involves (1) a final, formal proceeding initiated by a regulatory authority (e.g., a statesecurities agency, self-regulatory organization, federal regulator such as the U.S. Securities and Exchange Commission,foreign financial regulatory body) for a violation of investment-related rules or regulations; or (2) a revocation orsuspension of the authority of a brokerage firm or its control affiliate to act as an attorney, accountant or federalcontractor.Disclosure 1 of 92Reporting Source:FirmCurrent Status:Final22©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:STATE OF NEVADAPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:CONSENT AGREEMENT & ORDER IN LIEU OF CEASE & DESISTPROCEEDINGSDate Initiated:11/20/2018Docket/Case Number:116-116-MCFPrincipal Product Type:No ProductOther Product Type(s):Allegations:THE INVESTIGATION DETERMINED THAT BETWEEN SEPTEMBER 2007 ANDJUNE 2017, RESPONDENT FAILED TO COMPLY WITH NAC 90.392, WHICHREQUIRES THE LICENSING OF ALL BROKER-DEALER BRANCH OFFICES INTHE STATE OF NEVADA.Resolution Date:11/20/2018Resolution:Other Sanctions Ordered:CONSENT AGREEMENT & ORDER IN LIEU OF CEASE & DESISTPROCEEDINGSSanction Details:CIVIL FINE - $8,000.00 AND INVESTIGATIVE FINE - $569.58Sanctions Ordered:Monetary/Fine $8,000.00ConsentDisclosure 2 of 92iReporting Source:RegulatorAllegations:OPPENHEIMER & CO. INC. ("OPPENHEIMER"), AN EXCHANGE TPHORGANIZATION, WAS CENSURED, FINED $700,000, OF WHICH $625,000SHALL BE PAID TO CBOE AND AN UNDERTAKING WHEREBY WITHIN THIRTY(30) DAYS OF ACCEPTANCE OF THE LETTER OF CONSENT BY THEBUSINESS CONDUCT COMMITTEE, A REGISTERED PRINCIPAL OFOPPENHEIMER SHALL SUBMIT TO CBOE, CARE OF FINRA MARKETREGULATION - LEGAL (CHICAGO), A SIGNED, DATED ATTESTATIONPROVIDING THE FOLLOWING INFORMATION: (1) A REFERENCE TO THISMATTER; AND (2) A REPRESENTATION THAT OPPENHEIMER HASIMPLEMENTED REMEDIATION TO ADDRESS THE REPORTING ISSUESDESCRIBED BELOW, FOR THE FOLLOWING CONDUCT. OPPENHEIMER: (I)IN THAT IN AT LEAST 1.5 MILLION INSTANCES, OPPENHEIMER: (I) FAILED TOSUBMIT REPORTABLE POSITIONS TO THE LOPR; (II) SUBMITTED REPORTSCurrent Status:Final23©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:CHICAGO BOARD OPTIONS EXCHANGEPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Date Initiated:07/14/2017Docket/Case Number:17-0049/ 20150451860Principal Product Type:OptionsOther Product Type(s):TO THE LOPR WITH INCORRECT POSITION QUANTITIES; (III) SUBMITTEDREPORTS TO THE LOPR THAT FAILED TO IDENTIFY CUSTOMER ACCOUNTSAS ACTING IN-CONCERT; (IV) SUBMITTED REPORTS TO THE LOPR WITHINVALID OR MISSING FIELDS, SUCH AS CUSTOMER ADDRESS OR TAX IDINFORMATION; OR (V) INCORRECTLY REPORTED AS-OF TRANSACTIONS;(II) FAILED TO ESTABLISH ADEQUATE SUPERVISORY PROCEDURES,INCLUDING WRITTEN SUPERVISORY PROCEDURES AND A SEPARATESYSTEM OF FOLLOW-UP AND REVIEW, REASONABLY DESIGNED TOENSURE COMPLIANCE WITH EXCHANGE RULE 4.13, WHICH RESULTED INTHE LOPR REPORTING VIOLATIONS; AND (III) FAILED TO ADEQUATELYSUPERVISE ITS LOPR REPORTING ACTIVITY SO AS TO ENSURECOMPLIANCE WITH EXCHANGE RULE 4.13, WHICH RESULTED IN THE LOPRREPORTING VIOLATIONS. (EXCHANGE RULES 4.2 - ADHERENCE TO LAW,4.13 - REPORTS RELATED TO POSITION LIMITS, AND 4.24 - SUPERVISION)Resolution Date:10/05/2017Resolution:Other Sanctions Ordered:A TOTAL FINE OF $700,000 OF WHICH $625,000 SHALL BE PAID TO CBOEAND THE REMAINDER TO NASDAQ PHLX LLCSanction Details:A CENSURE AND A TOTAL FINE OF $700,000 OF WHICH $625,000 SHALL BEPAID TO CBOE AND THE REMAINDER TO NASDAQ PHLX LLCSanctions Ordered:CensureMonetary/Fine $625,000.00ConsentiReporting Source:FirmAllegations:DURING THE PERIOD BETWEEN JANUARY 19, 2010 AND JUNE 30, 2015 (THEREVIEW PERIOD), THE FIRM OVER-REPORTED OPTIONS POSITIONS TOCurrent Status:Final24©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:CBOEPrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:N/ADate Initiated:10/04/2017Docket/Case Number:20150451860Principal Product Type:OptionsOther Product Type(s):THE LARGE OPTIONS POSITION REPORT (LOPR) IN APPROXIMATELY260,890 INSTANCES BECAUSE OF A CODING ERROR IN ITS LOPR LOGICTHAT CAUSED: (I) RECORDS THAT WERE PROCESSED ON AN "AS OF"BASIS TO CLOSE A POSITION TO BE ERRONEOUSLY PROCESSED AS NEWOPENING POSITIONS RATHER THAN CLOSING POSITIONS; AND (II)DISPARATE REPORTING OF CANCELLATION AND REBOOKING ACTIVITY TOTHE LOPR FOLLOWING TRADE CORRECTIONS. AS A RESULT, THE FIRMVIOLATED CBOE (EXCHANGE) RULES 4.2, 4.24 AND 4.13. DURING THEREVIEW PERIOD, THE FIRM'S SUPERVISORY SYSTEM WAS INADEQUATEWITH RESPECT TO ACHIEVING COMPLIANCE WITH THE RULESGOVERNING THE REPORTING OF OPTIONS POSITIONS TO THE LOPRSYSTEM. ADDITIONALLY, DURING THE REVIEW PERIOD AND THROUGHMAY 2017, THE FIRM'S WRITTEN SUPERVISORY PROCEDURES WEREINADEQUATE WITH RESPECT TO ACHIEVING COMPLIANCE WITH THERULES GOVERNING THE REPORTING OF OPTIONS POSITIONS TO THELOPR SYSTEM. SPECIFICALLY, THEY FAILED TO SPECIFY: (I) WHATREVIEWS THE FIRM CONDUCTED, INCLUDING THE STEPS TO BE TAKEN INCONNECTION WITH SUCH REVIEWS, TO DETECT ISSUES RELATING TOTHE FORMATTING OF ITS LOPR REPORT, ACTING-IN-CONCERT ACTIVITY,AND REJECTED LOPR SUBMISSIONS; (II) THE PERSON(S) RESPONSIBLEFOR CONDUCTING SUCH REVIEWS; (III) THE FREQUENCY OF SUCHREVIEWS; AND (IV) HOW THE REVIEWS ARE TO BE DOCUMENTED. AS ARESULT, THE FIRM VIOLATED EXCHANGE RULES 748(G) (FOR THE PERIODPRIOR TO NOVEMBER 23, 2012), 748(H) (FOR THE PERIOD ON AND AFTERNOVEMBER 23, 2012), AND 707.Resolution Date:10/05/2017Resolution:Other Sanctions Ordered:Sanctions Ordered:CensureMonetary/Fine $625,000.00Decision & Order of Offer of Settlement25©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSanction Details:THE FIRM WAS CENSURED AND FINED $625,000.Firm StatementTHE FIRM MADE AND ENTERED INTO AN OFFER OF SETTLEMENT,STIPULATION OF FACTS AND CONSENT TO SANCTIONS, PURSUANT TOEXCHANGE RULE 4.13, SOLELY FOR THE PURPOSES OF THESEPROCEEDINGS AND TO SETTLE AND CONCLUDE ALL DISCIPLINARYACTIONS BY THE EXCHANGE BASED ON OR ARISING OUT OF THE FACTSHEREINAFTER STIPULATED. THE FIRM STIPULATES TO THE FACTS,CONSENTS TO THE CONCLUSION OF VIOLATIONS OF CERTAINPROVISIONS OF EXCHANGE RULES, AND CONSENTS TO THE IMPOSITIONOF SANCTIONS SPECIFICALLY INCLUDING, BUT NOT LIMITED TO,CONSENTING TO PAY THE FINE IMPOSED BY THE BUSINESS CONDUCTCOMMITTEE CONSISTENT WITH THE OFFER, AND TO COMPLY WITH ALLOTHER SANCTIONS, ALL AS HEREINAFTER SET FORTH, WITHOUTADMITTING OR DENYING THE ALLEGATIONS OR CONCLUSIONS IN THESTATEMENT OF CHARGES. IN DETERMINING TO RESOLVE THIS MATTER,THE COMMITTEE TOOK INTO ACCOUNT THE FIRM'S ENSUINGCOOPERATION THROUGHOUT FINRA'S INVESTIGATION AND THESUBSEQUENT REMEDIAL MEASURES IMPLEMENTED BY THE FIRM,INCLUDING SIGNIFICANT SYSTEM ENHANCEMENTS.Disclosure 3 of 92iReporting Source:RegulatorAllegations:DURING THE PERIOD BETWEEN JANUARY 19, 2010 AND JUNE 30, 2015 (THEREVIEW PERIOD), THE FIRM OVER-REPORTED OPTIONS POSITIONS TOTHE LARGE OPTIONS POSITION REPORT (LOPR) IN APPROXIMATELY260,890 INSTANCES BECAUSE OF A CODING ERROR IN ITS LOPR LOGICTHAT CAUSED: (I) RECORDS THAT WERE PROCESSED ON AN "AS OF"BASIS TO CLOSE A POSITION TO BE ERRONEOUSLY PROCESSED AS NEWOPENING POSITIONS RATHER THAN CLOSING POSITIONS; AND (II)DISPARATE REPORTING OF CANCELLATION AND REBOOKING ACTIVITY TOTHE LOPR FOLLOWING TRADE CORRECTIONS. AS A RESULT, THE FIRMVIOLATED NASDAQ PHLX LLC (EXCHANGE) RULES 1003 AND 707. DURINGTHE REVIEW PERIOD, THE FIRM'S SUPERVISORY SYSTEM WASINADEQUATE WITH RESPECT TO ACHIEVING COMPLIANCE WITH THERULES GOVERNING THE REPORTING OF OPTIONS POSITIONS TO THELOPR SYSTEM. ADDITIONALLY, DURING THE REVIEW PERIOD ANDTHROUGH MAY 2017, THE FIRM'S WRITTEN SUPERVISORY PROCEDURESWERE INADEQUATE WITH RESPECT TO ACHIEVING COMPLIANCE WITHTHE RULES GOVERNING THE REPORTING OF OPTIONS POSITIONS TO THELOPR SYSTEM. SPECIFICALLY, THEY FAILED TO SPECIFY: (I) WHATREVIEWS THE FIRM CONDUCTED, INCLUDING THE STEPS TO BE TAKEN INCurrent Status:Final26©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:NASDAQ PHLX LLCPrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:N/ADate Initiated:10/04/2017Docket/Case Number:2014043493501Principal Product Type:OptionsOther Product Type(s):CONNECTION WITH SUCH REVIEWS, TO DETECT ISSUES RELATING TOTHE FORMATTING OF ITS LOPR REPORT, ACTING-IN-CONCERT ACTIVITY,AND REJECTED LOPR SUBMISSIONS; (II) THE PERSON(S) RESPONSIBLEFOR CONDUCTING SUCH REVIEWS; (III) THE FREQUENCY OF SUCHREVIEWS; AND (IV) HOW THE REVIEWS ARE TO BE DOCUMENTED. AS ARESULT, THE FIRM VIOLATED EXCHANGE RULES 748(G) (FOR THE PERIODPRIOR TO NOVEMBER 23, 2012), 748(H) (FOR THE PERIOD ON AND AFTERNOVEMBER 23, 2012), AND 707.Resolution Date:10/05/2017Resolution:Other Sanctions Ordered:Sanction Details:THE FIRM WAS CENSURED AND FINED $75,000.Regulator StatementTHE FIRM MADE AND ENTERED INTO AN OFFER OF SETTLEMENT,STIPULATION OF FACTS AND CONSENT TO SANCTIONS, PURSUANT TOEXCHANGE RULE 960.7, SOLELY FOR THE PURPOSES OF THESEPROCEEDINGS AND TO SETTLE AND CONCLUDE ALL DISCIPLINARYACTIONS BY THE EXCHANGE BASED ON OR ARISING OUT OF THE FACTSHEREINAFTER STIPULATED. THE FIRM STIPULATES TO THE FACTS,CONSENTS TO THE CONCLUSION OF VIOLATIONS OF CERTAINPROVISIONS OF EXCHANGE RULES, AND CONSENTS TO THE IMPOSITIONOF SANCTIONS SPECIFICALLY INCLUDING, BUT NOT LIMITED TO,Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $75,000.00Decision & Order of Offer of Settlement27©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceCONSENTING TO PAY THE FINE IMPOSED BY THE BUSINESS CONDUCTCOMMITTEE CONSISTENT WITH THE OFFER, AND TO COMPLY WITH ALLOTHER SANCTIONS, ALL AS HEREINAFTER SET FORTH, WITHOUTADMITTING OR DENYING THE ALLEGATIONS OR CONCLUSIONS IN THESTATEMENT OF CHARGES. IN DETERMINING TO RESOLVE THIS MATTER,THE COMMITTEE TOOK INTO ACCOUNT THE FIRM'S ENSUINGCOOPERATION THROUGHOUT FINRA'S INVESTIGATION AND THESUBSEQUENT REMEDIAL MEASURES IMPLEMENTED BY THE FIRM,INCLUDING SIGNIFICANT SYSTEM ENHANCEMENTS. (ASSOCIATED CASENO. PHLX ENFORCEMENT 2017-14)iReporting Source:FirmInitiated By:NASDAQ PHLX LLCDate Initiated:10/04/2017Allegations:DURING THE PERIOD BETWEEN JANUARY 19, 2010 AND JUNE 30, 2015 (THEREVIEW PERIOD), THE FIRM OVER-REPORTED OPTIONS POSITIONS TOTHE LARGE OPTIONS POSITION REPORT (LOPR) IN APPROXIMATELY260,890 INSTANCES BECAUSE OF A CODING ERROR IN ITS LOPR LOGICTHAT CAUSED: (I) RECORDS THAT WERE PROCESSED ON AN "AS OF"BASIS TO CLOSE A POSITION TO BE ERRONEOUSLY PROCESSED AS NEWOPENING POSITIONS RATHER THAN CLOSING POSITIONS; AND (II)DISPARATE REPORTING OF CANCELLATION AND REBOOKING ACTIVITY TOTHE LOPR FOLLOWING TRADE CORRECTIONS. AS A RESULT, THE FIRMVIOLATED NASDAQ PHLX LLC (EXCHANGE) RULES 1003 AND 707. DURINGTHE REVIEW PERIOD, THE FIRM'S SUPERVISORY SYSTEM WASINADEQUATE WITH RESPECT TO ACHIEVING COMPLIANCE WITH THERULES GOVERNING THE REPORTING OF OPTIONS POSITIONS TO THELOPR SYSTEM. ADDITIONALLY, DURING THE REVIEW PERIOD ANDTHROUGH MAY 2017, THE FIRM'S WRITTEN SUPERVISORY PROCEDURESWERE INADEQUATE WITH RESPECT TO ACHIEVING COMPLIANCE WITHTHE RULES GOVERNING THE REPORTING OF OPTIONS POSITIONS TO THELOPR SYSTEM. SPECIFICALLY, THEY FAILED TO SPECIFY: (I) WHATREVIEWS THE FIRM CONDUCTED, INCLUDING THE STEPS TO BE TAKEN INCONNECTION WITH SUCH REVIEWS, TO DETECT ISSUES RELATING TOTHE FORMATTING OF ITS LOPR REPORT, ACTING-IN-CONCERT ACTIVITY,AND REJECTED LOPR SUBMISSIONS; (II) THE PERSON(S) RESPONSIBLEFOR CONDUCTING SUCH REVIEWS; (III) THE FREQUENCY OF SUCHREVIEWS; AND (IV) HOW THE REVIEWS ARE TO BE DOCUMENTED. AS ARESULT, THE FIRM VIOLATED EXCHANGE RULES 748(G) (FOR THE PERIODPRIOR TO NOVEMBER 23, 2012), 748(H) (FOR THE PERIOD ON AND AFTERNOVEMBER 23, 2012), AND 707.Current Status:Final28©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:N/ADocket/Case Number:2014043493501Principal Product Type:OptionsOther Product Type(s):Resolution Date:10/05/2017Resolution:Other Sanctions Ordered:Sanction Details:THE FIRM WAS CENSURED AND FINED $75,000.Firm StatementTHE FIRM MADE AND ENTERED INTO AN OFFER OF SETTLEMENT,STIPULATION OF FACTS AND CONSENT TO SANCTIONS, PURSUANT TOEXCHANGE RULE 960.7, SOLELY FOR THE PURPOSES OF THESEPROCEEDINGS AND TO SETTLE AND CONCLUDE ALL DISCIPLINARYACTIONS BY THE EXCHANGE BASED ON OR ARISING OUT OF THE FACTSHEREINAFTER STIPULATED. THE FIRM STIPULATES TO THE FACTS,CONSENTS TO THE CONCLUSION OF VIOLATIONS OF CERTAINPROVISIONS OF EXCHANGE RULES, AND CONSENTS TO THE IMPOSITIONOF SANCTIONS SPECIFICALLY INCLUDING, BUT NOT LIMITED TO,CONSENTING TO PAY THE FINE IMPOSED BY THE BUSINESS CONDUCTCOMMITTEE CONSISTENT WITH THE OFFER, AND TO COMPLY WITH ALLOTHER SANCTIONS, ALL AS HEREINAFTER SET FORTH, WITHOUTADMITTING OR DENYING THE ALLEGATIONS OR CONCLUSIONS IN THESTATEMENT OF CHARGES. IN DETERMINING TO RESOLVE THIS MATTER,THE COMMITTEE TOOK INTO ACCOUNT THE FIRM'S ENSUINGCOOPERATION THROUGHOUT FINRA'S INVESTIGATION AND THESUBSEQUENT REMEDIAL MEASURES IMPLEMENTED BY THE FIRM,INCLUDING SIGNIFICANT SYSTEM ENHANCEMENTS. (ASSOCIATED CASENO. PHLX ENFORCEMENT 2017-14)Sanctions Ordered:CensureMonetary/Fine $75,000.00Decision & Order of Offer of SettlementDisclosure 4 of 92iReporting Source:RegulatorAllegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDCurrent Status:Final29©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:06/01/2017Docket/Case Number:2013038869101Principal Product Type:Debt - MunicipalOther Product Type(s):TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IN SIXTRANSACTIONS, IT PURCHASED MUNICIPAL SECURITIES FOR ITS OWNACCOUNT FROM A CUSTOMER AND/OR SOLD MUNICIPAL SECURITIES FORITS OWN ACCOUNT TO A CUSTOMER AT AN AGGREGATE PRICE(INCLUDING ANY MARK-UP OR MARK-DOWN) THAT WAS NOT FAIR ANDREASONABLE, TAKING INTO CONSIDERATION ALL RELEVANT FACTORS,INCLUDING THE BEST JUDGMENT OF THE BROKER, DEALER ORMUNICIPAL SECURITIES DEALER AS TO THE FAIR MARKET VALUE OF THESECURITIES AT THE TIME OF THE TRANSACTION AND OF ANY SECURITIESEXCHANGED OR TRADED IN CONNECTION WITH THE TRANSACTION, THEEXPENSE INVOLVED IN EFFECTING THE TRANSACTION, THE FACT THATTHE BROKER, DEALER, OR MUNICIPAL SECURITIES DEALER IS ENTITLEDTO A PROFIT, AND THE TOTAL DOLLAR AMOUNT OF THE TRANSACTION.Resolution Date:06/01/2017Resolution:Other Sanctions Ordered:Sanction Details:THE FIRM WAS CENSURED, FINED $20,000, AND ORDERED TO PAY$10,301.44, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS. FINES PAIDIN FULL ON JULY 14, 2017.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $20,000.00Disgorgement/RestitutionAcceptance, Waiver & Consent(AWC)30©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceiReporting Source:FirmInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:06/01/2017Docket/Case Number:2013038869101Principal Product Type:Debt - MunicipalOther Product Type(s):Allegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IN SIXTRANSACTIONS, IT PURCHASED MUNICIPAL SECURITIES FOR ITS OWNACCOUNT FROM A CUSTOMER AND/OR SOLD MUNICIPAL SECURITIES FORITS OWN ACCOUNT TO A CUSTOMER AT AN AGGREGATE PRICE(INCLUDING ANY MARK-UP OR MARK-DOWN) THAT WAS NOT FAIR ANDREASONABLE, TAKING INTO CONSIDERATION ALL RELEVANT FACTORS,INCLUDING THE BEST JUDGMENT OF THE BROKER, DEALER ORMUNICIPAL SECURITIES DEALER AS TO THE FAIR MARKET VALUE OF THESECURITIES AT THE TIME OF THE TRANSACTION AND OF ANY SECURITIESEXCHANGED OR TRADED IN CONNECTION WITH THE TRANSACTION, THEEXPENSE INVOLVED IN EFFECTING THE TRANSACTION, THE FACT THATTHE BROKER, DEALER, OR MUNICIPAL SECURITIES DEALER IS ENTITLEDTO A PROFIT, AND THE TOTAL DOLLAR AMOUNT OF THE TRANSACTION.Current Status:FinalResolution Date:06/01/2017Resolution:Other Sanctions Ordered:Sanction Details:THE FIRM WAS CENSURED, FINED $20,000, AND ORDERED TO PAY$10,301.44, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS.Sanctions Ordered:CensureMonetary/Fine $20,000.00Disgorgement/RestitutionAcceptance, Waiver & Consent(AWC)Disclosure 5 of 92i31©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceReporting Source:RegulatorInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:11/29/2016Docket/Case Number:2015044484601Principal Product Type:Debt - MunicipalOther Product Type(s):Allegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED ON43 OCCASIONS TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMER THE CALL DATE AND DOLLAR PRICE OF THE CALL IN 43TRANSACTIONS IN MUNICIPAL SECURITIES EXECUTED ON THE BASIS OF AYIELD TO CALL. THE FINDINGS STATED THAT THE FIRM FAILED ON THREEOCCASIONS TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMER THE CORRECT LOWEST EFFECTIVE YIELD IN THREETRANSACTIONS IN MUNICIPAL SECURITIES AND PROVIDED ON ONEOCCASION WRITTEN NOTIFICATION IMPROPERLY DISCLOSING TO ITSCUSTOMER A YIELD TO CALL IN ONE TRANSACTION IN A MUNICIPALSECURITY WITH A VARIABLE INTEREST RATE.Current Status:FinalResolution Date:11/29/2016Resolution:Other Sanctions Ordered:Sanction Details:THE FIRM WAS CENSURED AND FINED $20,000. FINES PAID IN FULL ON12/15/16.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $20,000.00Acceptance, Waiver & Consent(AWC)32©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceiReporting Source:FirmInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:11/29/2016Docket/Case Number:2015044484601Principal Product Type:Debt - MunicipalOther Product Type(s):Allegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED ON43 OCCASIONS TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMER THE CALL DATE AND DOLLAR PRICE OF THE CALL IN 43TRANSACTIONS IN MUNICIPAL SECURITIES EXECUTED ON THE BASIS OF AYIELD TO CALL. THE FINDINGS STATED THAT THE FIRM FAILED ON THREEOCCASIONS TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMER THE CORRECT LOWEST EFFECTIVE YIELD IN THREETRANSACTIONS IN MUNICIPAL SECURITIES AND PROVIDED ON ONEOCCASION WRITTEN NOTIFICATION IMPROPERLY DISCLOSING TO ITSCUSTOMER A YIELD TO CALL IN ONE TRANSACTION IN A MUNICIPALSECURITY WITH A VARIABLE INTEREST RATE.Current Status:FinalResolution Date:11/29/2016Resolution:Other Sanctions Ordered:Sanction Details:THE FIRM WAS CENSURED AND FINED $20,000.Sanctions Ordered:CensureMonetary/Fine $20,000.00Acceptance, Waiver & Consent(AWC)Disclosure 6 of 92iReporting Source:RegulatorCurrent Status:Final33©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceAllegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT OVER THECOURSE OF SEVERAL YEARS, IT FAILED TO ESTABLISH, MAINTAIN, ANDIMPLEMENT SUPERVISORY SYSTEMS AND PROCEDURES REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH CERTAIN SECURITIESREGULATIONS AND FINRA AND NASD RULES, AND TO REPORT VIOLATIONSOF THOSE RULES TO FINRA WHERE APPROPRIATE. THE FINDINGS STATEDTHAT THE FIRM FAILED TO REPORT REQUIRED INFORMATION TO FINRA,APPLY APPLICABLE SALES CHARGE WAIVERS TO ITS CUSTOMERS, ANDPRODUCE RELEVANT DOCUMENTS TO CUSTOMERS WHO HAD FILEDARBITRATIONS AGAINST IT FOR FAILING TO SUPERVISE A FORMERREGISTERED REPRESENTATIVE. THE FINDINGS ALSO STATED THAT INPARTICULAR, THE FIRM FAILED TO TIMELY MAKE 365 REQUIRED FILINGSWITH FINRA PURSUANT TO FINRA RULE 4530 AND ITS PREDECESSORRULES, TO REPORT, AMONG OTHER THINGS, REGULATORY FINDINGS OFSECURITIES LAWS VIOLATIONS, DISCIPLINARY ACTIONS TAKEN BY THEFIRM AGAINST ITS EMPLOYEES, SETTLEMENTS OF SECURITIES-RELATEDARBITRATION AND LITIGATION CLAIMS, AND THE INSTITUTION OFSECURITIES-RELATED CIVIL LITIGATION AGAINST THE FIRM. THE FIRM DIDNOT MAINTAIN PROCEDURES THAT GAVE DIRECTION TO THE FIRM'SEMPLOYEES ON MAKING THE DISCLOSURES REQUIRED BY FINRA RULES4530(A), (B), AND (F). THE FINDINGS ALSO INCLUDED THAT THE FIRMFAILED TO TIMELY FILE REQUIRED FORM U4 AMENDMENTS DISCLOSINGTHAT TWO OF ITS EMPLOYEES HAD RECEIVED WELLS NOTICES FROMTHE SECURITIES AND EXCHANGE COMMISSION. ALTHOUGH THE FIRM HADIMPLEMENTED REVISED REPORTING PROCEDURES AS A RESULT OF AFINRA INVESTIGATION THAT SUBSEQUENTLY RESULTED IN A PREVIOUSLETTER OF ACCEPTANCE, WAIVER, AND CONSENT, IT FAILED TOIMPLEMENT PROCEDURES THAT ADEQUATELY ADDRESSED ITS SEPARATEREPORTING OBLIGATIONS PURSUANT TO FINRA RULES 4530 (A), (B), AND(F), AND ITS OBLIGATION TO REPORT REGULATORY EVENTS ON FORMSU4. THE FIRM FAILED TO MAINTAIN ADEQUATE WRITTEN PROCEDURES TOENSURE THAT REGULATORY EVENTS, INCLUDING WELLS NOTICES, WEREREPORTED ON FORMS U4 AND U5. ALL OF THE FIRM'S SUPERVISORY ANDCOMPLIANCE PROCEDURES FAILED TO SPECIFICALLY ADDRESSREPORTING REGULATORY EVENTS, INCLUDING WELLS NOTICES. AS ARESULT OF THE FIRM'S INADEQUATE PROCEDURES, EMPLOYEES IN ITSVARIOUS DEPARTMENTS WERE UNCERTAIN OF THEIR INDIVIDUALRESPONSIBILITY FOR ENSURING THAT REGULATORY EVENTS WEREDISCLOSED ON FORMS U4 AND U5. FINRA FOUND THAT THE FIRMDISADVANTAGED CERTAIN RETIREMENT PLAN AND CHARITABLEORGANIZATION CUSTOMERS THAT WERE ELIGIBLE TO PURCHASE CLASSA SHARES IN CERTAIN MUTUAL FUNDS WITHOUT A FRONT-END SALESCHARGE (ELIGIBLE CUSTOMERS). THESE ELIGIBLE CUSTOMERS WEREINSTEAD SOLD CLASS A SHARES WITH A FRONT-END SALES CHARGE OR34©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:11/17/2016Docket/Case Number:2015046355401Principal Product Type:Mutual Fund(s)Other Product Type(s):CLASS B OR C SHARES WITH BACK-END SALES CHARGES AND HIGHERONGOING FEES AND EXPENSES. DURING THE PERIOD, THE FIRM FAILEDTO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM ANDPROCEDURES REASONABLY DESIGNED TO ENSURE THAT THE ELIGIBLECUSTOMERS RECEIVED THE BENEFIT OF APPLICABLE SALES CHARGEWAIVERS. THE FIRM FAILED TO REASONABLY SUPERVISE THEAPPLICATION OF SALES CHARGE WAIVERS TO ELIGIBLE MUTUAL FUNDSALES. THE FIRM RELIED ON ITS FINANCIAL ADVISORS TO DETERMINETHE APPLICABILITY OF SALES CHARGE WAIVERS, BUT FAILED TOMAINTAIN ADEQUATE WRITTEN POLICIES OR PROCEDURES TO ASSISTFINANCIAL ADVISORS IN MAKING THIS DETERMINATION. IN ADDITION, THEFIRM FAILED TO ADEQUATELY NOTIFY AND TRAIN ITS FINANCIALADVISORS REGARDING THE AVAILABILITY OF MUTUAL FUND SALESCHARGE WAIVERS FOR ELIGIBLE CUSTOMERS. THE FIRM FAILED TOADOPT ADEQUATE CONTROLS TO DETECT INSTANCES IN WHICH IT DIDNOT PROVIDE SALES CHARGE WAIVERS TO ELIGIBLE CUSTOMERS INCONNECTION WITH THEIR MUTUAL FUND PURCHASES. FINRA ALSOFOUND THAT THE FIRM FAILED TO PRODUCE CERTAIN RESPONSIVEDOCUMENTS TO SEVEN ARBITRATION CLAIMANTS WHO ALLEGED THATTHE FIRM FAILED TO SUPERVISE THE FORMER REGISTEREDREPRESENTATIVE.Resolution Date:11/17/2016Resolution:Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureAcceptance, Waiver & Consent(AWC)35©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:UNDERTAKING AND REMEDIATION PAYMENTSSanction Details:THE FIRM WAS CENSURED AND FINED $1,575,000.REMEDIATION PAYMENTS TOTALING $703,122 TO BE PAID TO THE SEVENSETS OF ARBITRATION CLAIMANTS, AND ADDITIONAL REMEDIATIONTOTALING APPROXIMATELY $1,142,619 PAID TO THE ELIGIBLE CUSTOMERSWHO, FROM JANUARY 2009 TO AUGUST 2016, QUALIFIED FOR, BUT DIDNOT RECEIVE, THE APPLICABLE MUTUAL FUND SALES CHARGE WAIVERS.THE FIRM IS REQUIRED TO CERTIFY TO FINRA ENFORCEMENT, WITHIN 90DAYS OF THE ISSUANCE OF THE AWC THAT IT HAS ADOPTED ANDIMPLEMENTED WRITTEN SUPERVISORY POLICIES AND PROCEDURESREASONABLY DESIGNED TO ADDRESS THE DEFICIENCIES IDENTIFIED INTHE AWC. FINES PAID IN FULL 21/13/16.Regulator StatementTHE FIRM SELF-REPORTED TO FINRA THAT ELIGIBLE CUSTOMERS HADNOT RECEIVED AVAILABLE SALES CHARGE WAIVERS.AS A RESULT OF THE FAILURE OF THE FIRM TO APPLY AVAILABLE SALESCHARGE WAIVERS, THE FIRM ESTIMATES THAT ELIGIBLE CUSTOMERSWERE OVERCHARGED BY APPROXIMATELY $1,010,327 FOR MUTUAL FUNDPURCHASES MADE. AS PART OF THIS SETTLEMENT, THE FIRM HAS PAIDRESTITUTION TO ELIGIBLE CUSTOMERS, WHICH IS ESTIMATED TO TOTAL$1,142,619 (I.E., THE AMOUNT ELIGIBLE CUSTOMERS WEREOVERCHARGED, INCLUSIVE OF INTEREST). THE FIRM WILL ALSO ENSURETHAT RETIREMENT AND CHARITABLE WAIVERS ARE APPROPRIATELYAPPLIED TO ALL FUTURE TRANSACTIONS.SOLELY WITH RESPECT TO THE PORTION OF THIS MATTER THAT RELATESTO THE FIRM'S FAILURE TO PROVIDE SALES CHARGE WAIVERS, FINRAHAS RECOGNIZED THE COOPERATION OF THE FIRM FOR HAVING:INITIATED IN AUGUST 2015, PRIOR TO DETECTION OR INTERVENTION BY AREGULATOR, AN INVESTIGATION TO IDENTIFY WHETHER ELIGIBLECUSTOMERS RECEIVED SALES CHARGE WAIVERS DURING THE RELEVANTPERIOD; PROMPTLY ESTABLISHED A PLAN OF REMEDIATION FOR ELIGIBLECUSTOMERS WHO DID NOT RECEIVE APPROPRIATE SALES CHARGEWAIVERS; PROMPTLY SELF-REPORTED TO FINRA; PROMPTLY TAKENACTION AND REMEDIAL STEPS TO CORRECT THE VIOLATIVE CONDUCT;AND EMPLOYED SUBSEQUENT CORRECTIVE MEASURES, PRIOR TODETECTION OR INTERVENTION BY A REGULATOR, TO REVISE ITSPROCEDURES TO AVOID RECURRENCE OF THE MISCONDUCT.Monetary/Fine $1,575,000.00iReporting Source:FirmCurrent Status:Final36©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceAllegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT OVER THECOURSE OF SEVERAL YEARS, IT FAILED TO ESTABLISH, MAINTAIN, ANDIMPLEMENT SUPERVISORY SYSTEMS AND PROCEDURES REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH CERTAIN SECURITIESREGULATIONS AND FINRA AND NASD RULES, AND TO REPORT VIOLATIONSOF THOSE RULES TO FINRA WHERE APPROPRIATE. THE FINDINGS STATEDTHAT THE FIRM FAILED TO REPORT REQUIRED INFORMATION TO FINRA,APPLY APPLICABLE SALES CHARGE WAIVERS TO ITS CUSTOMERS, ANDPRODUCE RELEVANT DOCUMENTS TO CUSTOMERS WHO HAD FILEDARBITRATIONS AGAINST IT FOR FAILING TO SUPERVISE A FORMERREGISTERED REPRESENTATIVE. THE FINDINGS ALSO STATED THAT INPARTICULAR, THE FIRM FAILED TO TIMELY MAKE 365 REQUIRED FILINGSWITH FINRA PURSUANT TO FINRA RULE 4530 AND ITS PREDECESSORRULES, TO REPORT, AMONG OTHER THINGS, REGULATORY FINDINGS OFSECURITIES LAWS VIOLATIONS, DISCIPLINARY ACTIONS TAKEN BY THEFIRM AGAINST ITS EMPLOYEES, SETTLEMENTS OF SECURITIES-RELATEDARBITRATION AND LITIGATION CLAIMS, AND THE INSTITUTION OFSECURITIES-RELATED CIVIL LITIGATION AGAINST THE FIRM. THE FIRM DIDNOT MAINTAIN PROCEDURES THAT GAVE DIRECTION TO THE FIRM'SEMPLOYEES ON MAKING THE DISCLOSURES REQUIRED BY FINRA RULES4530(A), (B), AND (F). THE FINDINGS ALSO INCLUDED THAT THE FIRMFAILED TO TIMELY FILE REQUIRED FORM U4 AMENDMENTS DISCLOSINGTHAT TWO OF ITS EMPLOYEES HAD RECEIVED WELLS NOTICES FROMTHE SECURITIES AND EXCHANGE COMMISSION. ALTHOUGH THE FIRM HADIMPLEMENTED REVISED REPORTING PROCEDURES AS A RESULT OF AFINRA INVESTIGATION THAT SUBSEQUENTLY RESULTED IN A PREVIOUSLETTER OF ACCEPTANCE, WAIVER, AND CONSENT, IT FAILED TOIMPLEMENT PROCEDURES THAT ADEQUATELY ADDRESSED ITS SEPARATEREPORTING OBLIGATIONS PURSUANT TO FINRA RULES 4530 (A), (B), AND(F), AND ITS OBLIGATION TO REPORT REGULATORY EVENTS ON FORMSU4. THE FIRM FAILED TO MAINTAIN ADEQUATE WRITTEN PROCEDURES TOENSURE THAT REGULATORY EVENTS, INCLUDING WELLS NOTICES, WEREREPORTED ON FORMS U4 AND U5. ALL OF THE FIRM'S SUPERVISORY ANDCOMPLIANCE PROCEDURES FAILED TO SPECIFICALLY ADDRESSREPORTING REGULATORY EVENTS, INCLUDING WELLS NOTICES. AS ARESULT OF THE FIRM'S INADEQUATE PROCEDURES, EMPLOYEES IN ITSVARIOUS DEPARTMENTS WERE UNCERTAIN OF THEIR INDIVIDUALRESPONSIBILITY FOR ENSURING THAT REGULATORY EVENTS WEREDISCLOSED ON FORMS U4 AND U5. FINRA FOUND THAT THE FIRMDISADVANTAGED CERTAIN RETIREMENT PLAN AND CHARITABLEORGANIZATION CUSTOMERS THAT WERE ELIGIBLE TO PURCHASE CLASSA SHARES IN CERTAIN MUTUAL FUNDS WITHOUT A FRONT-END SALESCHARGE (ELIGIBLE CUSTOMERS). THESE ELIGIBLE CUSTOMERS WEREINSTEAD SOLD CLASS A SHARES WITH A FRONT-END SALES CHARGE OR37©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:11/17/2016Docket/Case Number:2015046355401Principal Product Type:Mutual Fund(s)Other Product Type(s):CLASS B OR C SHARES WITH BACK-END SALES CHARGES AND HIGHERONGOING FEES AND EXPENSES. DURING THE PERIOD, THE FIRM FAILEDTO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM ANDPROCEDURES REASONABLY DESIGNED TO ENSURE THAT THE ELIGIBLECUSTOMERS RECEIVED THE BENEFIT OF APPLICABLE SALES CHARGEWAIVERS. THE FIRM FAILED TO REASONABLY SUPERVISE THEAPPLICATION OF SALES CHARGE WAIVERS TO ELIGIBLE MUTUAL FUNDSALES. THE FIRM RELIED ON ITS FINANCIAL ADVISORS TO DETERMINETHE APPLICABILITY OF SALES CHARGE WAIVERS, BUT FAILED TOMAINTAIN ADEQUATE WRITTEN POLICIES OR PROCEDURES TO ASSISTFINANCIAL ADVISORS IN MAKING THIS DETERMINATION. IN ADDITION, THEFIRM FAILED TO ADEQUATELY NOTIFY AND TRAIN ITS FINANCIALADVISORS REGARDING THE AVAILABILITY OF MUTUAL FUND SALESCHARGE WAIVERS FOR ELIGIBLE CUSTOMERS. THE FIRM FAILED TOADOPT ADEQUATE CONTROLS TO DETECT INSTANCES IN WHICH IT DIDNOT PROVIDE SALES CHARGE WAIVERS TO ELIGIBLE CUSTOMERS INCONNECTION WITH THEIR MUTUAL FUND PURCHASES. FINRA ALSOFOUND THAT THE FIRM FAILED TO PRODUCE CERTAIN RESPONSIVEDOCUMENTS TO SEVEN ARBITRATION CLAIMANTS WHO ALLEGED THATTHE FIRM FAILED TO SUPERVISE THE FORMER REGISTEREDREPRESENTATIVE.Resolution Date:11/17/2016Resolution:Other Sanctions Ordered:UNDERTAKING AND REMEDIATION PAYMENTSSanction Details:THE FIRM WAS CENSURED AND FINED $1,575,000. REMEDIATIONPAYMENTS TOTALING $703,122 TO BE PAID TO THE SEVEN SETS OFARBITRATION CLAIMANTS, AND ADDITIONAL REMEDIATION TOTALINGSanctions Ordered:CensureMonetary/Fine $1,575,000.00Acceptance, Waiver & Consent(AWC)38©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceAPPROXIMATELY $1,142,619 PAID TO THE ELIGIBLE CUSTOMERS WHO,FROM JANUARY 2009 TO AUGUST 2016, QUALIFIED FOR, BUT DID NOTRECEIVE, THE APPLICABLE MUTUAL FUND SALES CHARGE WAIVERS. THEFIRM IS REQUIRED TO CERTIFY TO FINRA ENFORCEMENT, WITHIN 90 DAYSOF THE ISSUANCE OF THE AWC THAT IT HAS ADOPTED AND IMPLEMENTEDWRITTEN SUPERVISORY POLICIES AND PROCEDURES REASONABLYDESIGNED TO ADDRESS THE DEFICIENCIES IDENTIFIED IN THE AWC.Firm StatementTHE FIRM SELF-REPORTED TO FINRA THAT ELIGIBLE CUSTOMERS HADNOT RECEIVED AVAILABLE SALES CHARGE WAIVERS. AS A RESULT OF THEFAILURE OF THE FIRM TO APPLY AVAILABLE SALES CHARGE WAIVERS,THE FIRM ESTIMATES THAT ELIGIBLE CUSTOMERS WERE OVERCHARGEDBY APPROXIMATELY $1,010,327 FOR MUTUAL FUND PURCHASES MADE. ASPART OF THIS SETTLEMENT, THE FIRM HAS PAID RESTITUTION TOELIGIBLE CUSTOMERS, WHICH IS ESTIMATED TO TOTAL $1,142,619 (I.E.,THE AMOUNT ELIGIBLE CUSTOMERS WERE OVERCHARGED, INCLUSIVEOF INTEREST). THE FIRM WILL ALSO ENSURE THAT RETIREMENT ANDCHARITABLE WAIVERS ARE APPROPRIATELY APPLIED TO ALL FUTURETRANSACTIONS. SOLELY WITH RESPECT TO THE PORTION OF THISMATTER THAT RELATES TO THE FIRM'S FAILURE TO PROVIDE SALESCHARGE WAIVERS, FINRA HAS RECOGNIZED THE COOPERATION OF THEFIRM FOR HAVING: INITIATED IN AUGUST 2015, PRIOR TO DETECTION ORINTERVENTION BY A REGULATOR, AN INVESTIGATION TO IDENTIFYWHETHER ELIGIBLE CUSTOMERS RECEIVED SALES CHARGE WAIVERSDURING THE RELEVANT PERIOD; PROMPTLY ESTABLISHED A PLAN OFREMEDIATION FOR ELIGIBLE CUSTOMERS WHO DID NOT RECEIVEAPPROPRIATE SALES CHARGE WAIVERS; PROMPTLY SELF-REPORTED TOFINRA; PROMPTLY TAKEN ACTION AND REMEDIAL STEPS TO CORRECTTHE VIOLATIVE CONDUCT; AND EMPLOYED SUBSEQUENT CORRECTIVEMEASURES, PRIOR TO DETECTION OR INTERVENTION BY A REGULATOR,TO REVISE ITS PROCEDURES TO AVOID RECURRENCE OF THEMISCONDUCT.Disclosure 7 of 92iReporting Source:RegulatorAllegations:THE INVESTIGATION DETERMINED THAT RESPONDENT WAS RESPONSIBLEFOR SUBMITTING THE RELEVANT INVESTMENT ADVISERREPRESENTATIVE REGISTRATION APPLICATION MATERIALS FOR FORTY(40) MICHIGAN INDIVIDUAL REPRESENTATIVES, BUT THAT IT FAILED TO DOSO FROM THE EFFECTIVE DATE OF THE SECURITIES ACT ON OCTOBER 1,2009 (AS EXTENDED BY VARIOUS TRANSITION ORDERS) THROUGH LATE2015/EARLY 2016.Current Status:Final39©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:MICHIGANPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:CONSENT AGREEMENT & ORDER IN LIEU OF CEASE & DESISTPROCEEDINGSDate Initiated:07/19/2016Docket/Case Number:328306URL for Regulatory Action:Principal Product Type:No ProductOther Product Type(s):RESPONDENT HAS NOT IDENTIFIED ANY EXEMPTION, EXCEPTION,PREEMPTION, OR EXCLUSION JUSTIFYING ITS FAILURE TO REGISTERTHESE 40 INVESTMENT ADVISER REPRESENTATIVES IN MICHIGAN FROMOCTOBER 1, 2009 (THE DATE THE REGISTRATION REQUIREMENT BECAMEEFFECTIVE) THROUGH THEIR ACTUAL REGISTRATION DATE IN LATE2015/EARLY 2016.Resolution Date:07/19/2016Resolution:Other Sanctions Ordered:CONSENT AGREEMENT & ORDER IN LIEU OF CEASE & DESISTPROCEEDINGSSanction Details:CIVIL FINE- $900,000Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:Monetary/Fine $900,000.00ConsentiReporting Source:FirmAllegations:THE INVESTIGATION DETERMINED THAT RESPONDENT WAS RESPONSIBLEFOR SUBMITTING THE RELEVANT INVESTMENT ADVISERREPRESENTATIVE REGISTRATION APPLICATION MATERIALS FOR FORTY(40) MICHIGAN INDIVIDUAL REPRESENTATIVES, BUT THAT IT FAILED TO DOCurrent Status:Final40©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:MICHIGANPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:CONSENT AGREEMENT & ORDER IN LIEU OF CEASE & DESISTPROCEEDINGSDate Initiated:07/19/2016Docket/Case Number:328306Principal Product Type:No ProductOther Product Type(s):SO FROM THE EFFECTIVE DATE OF THE SECURITIES ACT ON OCTOBER 1,2009 (AS EXTENDED BY VARIOUS TRANSITION ORDERS) THROUGH LATE2015/EARLY 2016. RESPONDENT HAS NOT IDENTIFIED ANY EXEMPTION,EXCEPTION, PREEMPTION, OR EXCLUSION JUSTIFYING ITS FAILURE TOREGISTER THESE 40 INVESTMENT ADVISER REPRESENTATIVES INMICHIGAN FROM OCTOBER 1, 2009 (THE DATE THE REGISTRATIONREQUIREMENT BECAME EFFECTIVE) THROUGH THEIR ACTUALREGISTRATION DATE IN LATE 2015/EARLY 2016.Resolution Date:07/19/2016Resolution:Other Sanctions Ordered:CONSENT AGREEMENT & ORDER IN LIEU OF CEASE & DESISTPROCEEDINGSSanction Details:CIVIL FINE- $900,000Sanctions Ordered:Monetary/Fine $900,000.00ConsentDisclosure 8 of 92iReporting Source:RegulatorAllegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREPORT SHORT INTEREST POSITIONS ON MULTIPLE SETTLEMENT DATES,AND INACCURATELY REPORTED SHORT POSITIONS. THE FINDINGSSTATED THAT THE FIRM ERRONEOUSLY REPORTED "FAIL TO RECEIVE"POSITIONS ON MULTIPLE SETTLEMENT DATES IN THE FIRM'S "BUY-INACCOUNT" AS SHORT INTEREST POSITIONS, WHEN SUCH POSITIONSSHOULD NOT HAVE BEEN REPORTED TO FINRA. THE FINDINGS ALSOSTATED THAT THE FIRM FAILED TO ESTABLISH AND MAINTAIN ACurrent Status:Final41©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:06/20/2016Docket/Case Number:2013038725201Principal Product Type:OtherOther Product Type(s):UNSPECIFIED SECURITIESSUPERVISORY SYSTEM THAT WAS REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH THE APPLICABLE SECURITIES LAWS ANDREGULATIONS AND NASD AND FINRA RULES CONCERNING SHORTINTEREST REPORTING TO ENSURE COMPLIANCE WITH NASD RULE 3360AND FINRA RULE 4560. IN ADDITION, WHILE THE FIRM'S WRITTENSUPERVISORY PROCEDURES IDENTIFIED AN INDIVIDUAL RESPONSIBLEFOR CONDUCTING A REVIEW, THE FREQUENCY OF SUCH REVIEW, AND ADESCRIPTION OF HOW THE REVIEW SHOULD BE DOCUMENTED, THEFIRM'S SUPERVISORY STEPS DID NOT CONTAIN A PERIODIC REVIEW OFTHE FIRM'S SHORT INTEREST REPORTING LOGIC TO ASCERTAIN THAT ITWAS OPERATING PROPERLY AND THAT IT CAPTURED THE REQUIREDINFORMATION.Resolution Date:06/20/2016Resolution:Other Sanctions Ordered:UNDERTAKING: REVISE THE FIRM'S WRITTEN SUPERVISORYPROCEDURES.Sanction Details:THE FIRM WAS CENSURED, FINED $275,000 AND UNDERTAKES TO REVISEITS WRITTEN SUPERVISORY PROCEDURES. FINE PAID IN FULL ON JULY 13,2016.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $275,000.00Acceptance, Waiver & Consent(AWC)i42©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceReporting Source:FirmInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:06/20/2016Docket/Case Number:2013038725201Principal Product Type:OtherOther Product Type(s):UNSPECIFIED SECURITIESAllegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREPORT SHORT INTEREST POSITIONS ON MULTIPLE SETTLEMENT DATES,AND INACCURATELY REPORTED SHORT POSITIONS. THE FINDINGSSTATED THAT THE FIRM ERRONEOUSLY REPORTED "FAIL TO RECEIVE"POSITIONS ON MULTIPLE SETTLEMENT DATES IN THE FIRM'S "BUY-INACCOUNT" AS SHORT INTEREST POSITIONS, WHEN SUCH POSITIONSSHOULD NOT HAVE BEEN REPORTED TO FINRA. THE FINDINGS ALSOSTATED THAT THE FIRM FAILED TO ESTABLISH AND MAINTAIN ASUPERVISORY SYSTEM THAT WAS REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH THE APPLICABLE SECURITIES LAWS ANDREGULATIONS AND NASD AND FINRA RULES CONCERNING SHORTINTEREST REPORTING TO ENSURE COMPLIANCE WITH NASD RULE 3360AND FINRA RULE 4560. IN ADDITION, WHILE THE FIRM'S WRITTENSUPERVISORY PROCEDURES IDENTIFIED AN INDIVIDUAL RESPONSIBLEFOR CONDUCTING A REVIEW, THE FREQUENCY OF SUCH REVIEW, AND ADESCRIPTION OF HOW THE REVIEW SHOULD BE DOCUMENTED, THEFIRM'S SUPERVISORY STEPS DID NOT CONTAIN A PERIODIC REVIEW OFTHE FIRM'S SHORT INTEREST REPORTING LOGIC TO ASCERTAIN THAT ITWAS OPERATING PROPERLY AND THAT IT CAPTURED THE REQUIREDINFORMATION.Current Status:FinalResolution Date:06/20/2016Resolution:Other Sanctions Ordered:UNDERTAKING: REVISE THE FIRM'S WRITTEN SUPERVISORYPROCEDURES.Sanctions Ordered:CensureMonetary/Fine $275,000.00Acceptance, Waiver & Consent(AWC)43©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSanction Details:THE FIRM WAS CENSURED, FINED $275,000 AND UNDERTAKES TO REVISEITS WRITTEN SUPERVISORY PROCEDURES.Disclosure 9 of 92iReporting Source:RegulatorAllegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT FOR OVERFOUR YEARS, IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE AREASONABLY-DESIGNED SUPERVISORY SYSTEM AND WSPS REGARDINGTHE SALES OF LEVERAGED, INVERSE, AND INVERSE-LEVERAGEDEXCHANGE-TRADED FUNDS (NON-TRADITIONAL ETFS). THE FINDINGSSTATED THAT IN RESPONSE TO FINRA'S REGULATORY NOTICE 09-31, THEFIRM INSTITUTED WSPS THAT PROHIBITED REPRESENTATIVES FROMSOLICITING RETAIL CUSTOMERS TO PURCHASE NON-TRADITIONAL ETFS.THE WSPS PERMITTED UNSOLICITED PURCHASES OF NON-TRADITIONALETFS BY RETAIL CUSTOMERS, BUT ONLY IF THE CUSTOMER WAS "PRE-QUALIFIED." TO MEET THIS PRE-QUALIFICATION REQUIREMENT, THEFIRM'S WSPS REQUIRED THAT REPRESENTATIVES OBTAIN A "LEVERAGEDETF REPRESENTATION LETTER" (THE "ETF QUALIFICATION LETTER") FROMEACH CUSTOMER SEEKING TO PURCHASE A NON-TRADITIONAL ETF. THEFINDINGS ALSO STATED THAT THE FIRM FAILED TO ENFORCE ITS WSPSPROHIBITING THE SOLICITATION OF NON-TRADITIONAL ETF PURCHASESFOR RETAIL CUSTOMERS IN SEVERAL RESPECTS. FIRST, THE FIRM DIDNOT ADEQUATELY TRAIN ITS SUPERVISORS AND REGISTEREDREPRESENTATIVES ON THE PROHIBITION AGAINST SOLICITED NON-TRADITIONAL ETF PURCHASES. SECOND, THE FIRM DID NOT PREVENTREPRESENTATIVES AND THE TRADING DESK FROM ENTERING SOLICITEDNON-TRADITIONAL ETF TRADES IN THE FIRM'S ORDER-ENTRY SYSTEM.THIRD, THE FIRM DID NOT USE AN EFFECTIVE SURVEILLANCE REPORT TOIDENTIFY SOLICITED NON-TRADITIONAL ETF TRADES. AS A RESULT, THEFIRM'S REPRESENTATIVES CONTINUED TO SOLICIT NON-TRADITIONAL ETFPURCHASES FROM RETAIL CUSTOMERS IN VIOLATION OF THE FIRM'SPOLICIES. THE FIRM ALSO FAILED TO ENFORCE ITS WSPS BY ALLOWINGRETAIL CUSTOMERS TO MAKE UNSOLICITED NON-TRADITIONAL ETFPURCHASES EVEN THOUGH THE CUSTOMERS WERE NOT PRE-QUALIFIED,EITHER BECAUSE THEY DID NOT HAVE AN ETF QUALIFICATION LETTER ONFILE OR BECAUSE THEY FAILED TO MEET THE PRE-QUALIFICATIONCRITERIA SET FORTH IN THE ETF QUALIFICATION LETTER. AS A RESULT,UNSOLICITED NON-TRADITIONAL ETF PURCHASES CONTINUED TO BEEXECUTED FOR CUSTOMERS WHO WERE NOT PRE-QUALIFIED INVIOLATION OF THE FIRM'S POLICIES. THE FINDINGS ALSO INCLUDED THATTHE FIRM DID NOT ESTABLISH AN ADEQUATE SUPERVISORY SYSTEM,Current Status:Final44©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:06/07/2016Docket/Case Number:2013038180801Principal Product Type:OtherOther Product Type(s):NON-TRADITIONAL ETFSINCLUDING THE USE OF EXCEPTION REPORTS, TO EFFECTIVELYMONITOR HOLDING PERIODS FOR NON-TRADITIONAL ETFS. A PRIMARYRISK WITH NON-TRADITIONAL ETFS IS THAT THEIR PERFORMANCE OVERLONGER PERIODS OF TIME CAN DIFFER SIGNIFICANTLY FROM THEPERFORMANCE OF THEIR UNDERLYING INDEX OR BENCHMARK,PARTICULARLY IN VOLATILE MARKETS. THE FIRM'S FAILURE TO HAVE ANADEQUATE SUPERVISORY SYSTEM TO MONITOR HOLDING PERIODS FORNON-TRADITIONAL ETFS CONTRIBUTED TO CUSTOMER LOSSES. FINRAFOUND THAT ALTHOUGH THE FIRM'S WSPS PROHIBITED SOLICITATION OFNON-TRADITIONAL ETFS, ITS REPRESENTATIVES NONETHELESSCONTINUED TO OFFER THESE SECURITIES TO RETAIL CUSTOMERS.BEFORE DOING SO, THE FIRM DID NOT PERFORM AN ADEQUATEREASONABLE BASIS SUITABILITY ANALYSIS OF NON-TRADITIONAL ETFSTO UNDERSTAND THE RISKS AND FEATURES ASSOCIATED WITH NON-TRADITIONAL ETFS. THE FIRM REPRESENTATIVES SOLICITED ANDEFFECTED NON-TRADITIONAL ETF PURCHASES THAT WERE UNSUITABLEFOR SPECIFIC CUSTOMERS. CERTAIN OF THE FIRM'S REPRESENTATIVESRECOMMENDED THESE COMPLEX AND SPECULATIVE PRODUCTS TONUMEROUS CUSTOMERS WITH CONSERVATIVE INVESTMENTOBJECTIVES, CERTAIN OF WHOM WERE ELDERLY. MOREOVER, SOME OFTHESE CUSTOMERS HELD NON-TRADITIONAL ETF POSITIONS FOREXTENDED PERIODS OF TIME - OFTEN MONTHS AND SOMETIME YEARS.FOR EXAMPLES, AN 89-YEAR CONSERVATIVE CUSTOMER WITH ANNUALINCOME OF $50,000 HELD 96 SOLICITED NON-TRADITIONAL ETFPOSITIONS FOR AN AVERAGE OF 32 DAYS (AND FOR UP TO 470 DAYS) FORA NET LOSS OF $51,847. ALSO, A 91-YEAR CONSERVATIVE CUSTOMERWITH AN ANNUAL INCOME OF $30,000 HELD 56 SOLICITED NON-TRADITIONAL ETF POSITIONS FOR AN AVERAGE OF 48 DAYS (AND FOR UPTO 706 DAYS) FOR A NET LOSS OF $11,161. (CONTINUE IN COMMENT)Resolution Date:06/07/2016Resolution:Acceptance, Waiver & Consent(AWC)45©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:PLUS INTEREST ON RESTITUTIONSanction Details:THE FIRM WAS CENSURED, FINED $2,250,000, AND ORDERED TO PAY$716,831.80, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS. FINE PAIDIN FULL ON JULY 13, 2016.Regulator Statement(CONTINUE FROM ALLEGATIONS SECTION)- ADDITIONALLY, A 67-YEARCONSERVATIVE CUSTOMER WITH AN ANNUAL INCOME OF $40,000 HELDTWO SOLICITED NON-TRADITIONAL ETF POSITIONS IN HER ACCOUNT FOR729 DAYS FOR A LOSS OF $2,746.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $2,250,000.00Disgorgement/RestitutioniReporting Source:FirmAllegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT FOR OVERFOUR YEARS, IT FAILED TO ESTABLISH, MAINTAIN AND ENFORCE AREASONABLY-DESIGNED SUPERVISORY SYSTEM AND WSPS REGARDINGTHE SALES OF LEVERAGED, INVERSE, AND INVERSE-LEVERAGEDEXCHANGE-TRADED FUNDS (NON-TRADITIONAL ETFS). THE FINDINGSSTATED THAT IN RESPONSE TO FINRA'S REGULATORY NOTICE 09-31, THEFIRM INSTITUTED WSPS THAT PROHIBITED REPRESENTATIVES FROMSOLICITING RETAIL CUSTOMERS TO PURCHASE NON-TRADITIONAL ETFS.THE WSPS PERMITTED UNSOLICITED PURCHASES OF NON-TRADITIONALETFS BY RETAIL CUSTOMERS, BUT ONLY IF THE CUSTOMER WAS "PRE-QUALIFIED." TO MEET THIS PRE-QUALIFICATION REQUIREMENT, THEFIRM'S WSPS REQUIRED THAT REPRESENTATIVES OBTAIN A "LEVERAGEDETF REPRESENTATION LETTER" (THE "ETF QUALIFICATION LETTER") FROMEACH CUSTOMER SEEKING TO PURCHASE A NON-TRADITIONAL ETF. THEFINDINGS ALSO STATED THAT THE FIRM FAILED TO ENFORCE ITS WSPSPROHIBITING THE SOLICITATION OF NON-TRADITIONAL ETF PURCHASESFOR RETAIL CUSTOMERS IN SEVERAL RESPECTS. FIRST, THE FIRM DIDNOT ADEQUATELY TRAIN ITS SUPERVISORS AND REGISTEREDREPRESENTATIVES ON THE PROHIBITION AGAINST SOLICITED NON-TRADITIONAL ETF PURCHASES. SECOND, THE FIRM DID NOT PREVENTCurrent Status:Final46©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceREPRESENTATIVES AND THE TRADING DESK FROM ENTERING SOLICITEDNON-TRADITIONAL ETF TRADES IN THE FIRM'S ORDER-ENTRY SYSTEM.THIRD, THE FIRM DID NOT USE AN EFFECTIVE SURVEILLANCE REPORT TOIDENTIFY SOLICITED NON-TRADITIONAL ETF TRADES. AS A RESULT, THEFIRM'S REPRESENTATIVES CONTINUED TO SOLICIT NON-TRADITIONAL ETFPURCHASES FROM RETAIL CUSTOMERS IN VIOLATION OF THE FIRM'SPOLICIES. THE FIRM ALSO FAILED TO ENFORCE ITS WSPS BY ALLOWINGRETAIL CUSTOMERS TO MAKE UNSOLICITED NON-TRADITIONAL ETFPURCHASES EVEN THOUGH THE CUSTOMERS WERE NOT PRE-QUALIFIED,EITHER BECAUSE THEY DID NOT HAVE AN ETF QUALIFICATION LETTER ONFILE OR BECAUSE THEY FAILED TO MEET THE PRE-QUALIFICATIONCRITERIA SET FORTH IN THE ETF QUALIFICATION LETTER. AS A RESULT,UNSOLICITED NON-TRADITIONAL ETF PURCHASES CONTINUED TO BEEXECUTED FOR CUSTOMERS WHO WERE NOT PRE-QUALIFIED INVIOLATION OF THE FIRM'S POLICIES. THE FINDINGS ALSO INCLUDED THATTHE FIRM DID NOT ESTABLISH AN ADEQUATE SUPERVISORY SYSTEM,INCLUDING THE USE OF EXCEPTION REPORTS, TO EFFECTIVELYMONITOR HOLDING PERIODS FOR NON-TRADITIONAL ETFS. A PRIMARYRISK WITH NON-TRADITIONAL ETFS IS THAT THEIR PERFORMANCE OVERLONGER PERIODS OF TIME CAN DIFFER SIGNIFICANTLY FROM THEPERFORMANCE OF THEIR UNDERLYING INDEX OR BENCHMARK,PARTICULARLY IN VOLATILE MARKETS. THE FIRM'S FAILURE TO HAVE ANADEQUATE SUPERVISORY SYSTEM TO MONITOR HOLDING PERIODS FORNON-TRADITIONAL ETFS CONTRIBUTED TO CUSTOMER LOSSES. FINRAFOUND THAT ALTHOUGH THE FIRM'S WSPS PROHIBITED SOLICITATION OFNON-TRADITIONAL ETFS, ITS REPRESENTATIVES NONETHELESSCONTINUED TO OFFER THESE SECURITIES TO RETAIL CUSTOMERS.BEFORE DOING SO, THE FIRM DID NOT PERFORM AN ADEQUATEREASONABLE BASIS SUITABILITY ANALYSIS OF NON-TRADITIONAL ETFSTO UNDERSTAND THE RISKS AND FEATURES ASSOCIATED WITH NON-TRADITIONAL ETFS. THE FIRM REPRESENTATIVES SOLICITED ANDEFFECTED NON-TRADITIONAL ETF PURCHASES THAT WERE UNSUITABLEFOR SPECIFIC CUSTOMERS. CERTAIN OF THE FIRM'S REPRESENTATIVESRECOMMENDED THESE COMPLEX AND SPECULATIVE PRODUCTS TONUMEROUS CUSTOMERS WITH CONSERVATIVE INVESTMENTOBJECTIVES, CERTAIN OF WHOM WERE ELDERLY. MOREOVER, SOME OFTHESE CUSTOMERS HELD NON-TRADITIONAL ETF POSITIONS FOREXTENDED PERIODS OF TIME - OFTEN MONTHS AND SOMETIME YEARS.FOR EXAMPLES, AN 89-YEAR CONSERVATIVE CUSTOMER WITH ANNUALINCOME OF $50,000 HELD 96 SOLICITED NON-TRADITIONAL ETFPOSITIONS FOR AN AVERAGE OF 32 DAYS (AND FOR UP TO 470 DAYS) FORA NET LOSS OF $51,847. ALSO, A 91-YEAR CONSERVATIVE CUSTOMERWITH AN ANNUAL INCOME OF $30,000 HELD 56 SOLICITED NON-TRADITIONAL ETF POSITIONS FOR AN AVERAGE OF 48 DAYS (AND FOR UPTO 706 DAYS) FOR A NET LOSS OF $11,161. (CONTINUE IN COMMENT)47©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:06/07/2016Docket/Case Number:2013038180801Principal Product Type:OtherOther Product Type(s):NON-TRADITIONAL ETFSResolution Date:06/07/2016Resolution:Other Sanctions Ordered:PLUS INTEREST ON RESTITUTIONSanction Details:THE FIRM WAS CENSURED, FINED $2,250,000, AND ORDERED TO PAY$716,831.80, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS.Firm StatementCONTINUE FROM ALLEGATIONS SECTION)- ADDITIONALLY, A 67-YEARCONSERVATIVE CUSTOMER WITH AN ANNUAL INCOME OF $40,000 HELDTWO SOLICITED NON-TRADITIONAL ETF POSITIONS IN HER ACCOUNT FOR729 DAYS FOR A LOSS OF $2,746.Sanctions Ordered:CensureMonetary/Fine $2,250,000.00Disgorgement/RestitutionAcceptance, Waiver & Consent(AWC)Disclosure 10 of 92iReporting Source:FirmAllegations:THE SECURITIES DIVISION OF THE OFFICE OF THE ATTORNEY GENERALFOR SOUTH CAROLINA DETERMINED THAT OPPENHEIMER, WITHOUTADMITTING OR DENYING THE FINDINGS, FAILED TO DETECT AND REPORTTHE ACTIVITIES OF MARK HOTTON (CRD# 2346843), A FORMERREGISTERED REPRESENTATIVE AND ONE OTHER, UNIDENTIFIEDREPRESENTATIVE. THIS RELATES TO A RESIDENT OF SOUTH CAROLINA,AND HOTTON'S RECOMMENDATION THAT THE CLIENT INVEST IN PRIVATEINVESTMENTS FROM NOVEMBER 2005 THROUGH OCTOBER 2008.OPPENHEIMER PAID A FINE OF $150,000 AND REIMBURSED COSTS OF$25,000.Current Status:Final48©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:SOUTH CAROLINA SECURITIES DIVISIONPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:05/04/2016Docket/Case Number:14115 AND 15062Principal Product Type:OtherOther Product Type(s):PRIVATE INVESTMENTSResolution Date:05/04/2016Resolution:Other Sanctions Ordered:Sanction Details:THE SECURITIES DIVISION OF THE OFFICE OF THE ATTORNEY GENERALFOR SOUTH CAROLINA DETERMINED THAT OPPENHEIMER, WITHOUTADMITTING OR DENYING THE FINDINGS, FAILED TO DETECT AND REPORTTHE ACTIVITIES OF MARK HOTTON (CRD# 2346843), A FORMERREGISTERED REPRESENTATIVE AND ONE OTHER, UNIDENTIFIEDREPRESENTATIVE. THIS RELATES TO A RESIDENT OF SOUTH CAROLINA,AND HOTTON'S RECOMMENDATION THAT THE CLIENT INVEST IN PRIVATEINVESTMENTS FROM NOVEMBER 2005 THROUGH OCTOBER 2008.OPPENHEIMER PAID A FINE OF $150,000 AND REIMBURSED COSTS OF$25,000.Sanctions Ordered:Monetary/Fine $150,000.00Stipulation and ConsentDisclosure 11 of 92iReporting Source:RegulatorAllegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT EFFECTEDCUSTOMER TRANSACTIONS IN A MUNICIPAL SECURITY IN AN AMOUNTLOWER THAN THE MINIMUM DENOMINATION OF THE ISSUE WHICH WERENOT SUBJECT TO AN EXCEPTION UNDER THE RULE. THE FINDINGSSTATED THAT THE FIRM FAILED TO DISCLOSE ALL MATERIAL FACTSCONCERNING MUNICIPAL SECURITIES TRANSACTIONS AT OR PRIOR TOTHE TIME OF TRADE. SPECIFICALLY, THE FIRM FAILED TO INFORM ITSCUSTOMER THAT THE MUNICIPAL SECURITIES TRANSACTION WAS IN ANCurrent Status:Final49©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:12/22/2015Docket/Case Number:2014041832801Principal Product Type:Debt - MunicipalOther Product Type(s):AMOUNT BELOW THE MINIMUM DENOMINATION OF THE ISSUE.Resolution Date:12/22/2015Resolution:Other Sanctions Ordered:RESCISSIONSanction Details:THE FIRM WAS CENSURED, FINED $200,000 AND MUST OFFER RESCISSIONTO THE CUSTOMERS WHO PURCHASED SECURITIES AT EITHER THEORIGINAL PURCHASE PRICE OR THE CURRENT FAIR MARKET VALUE,WHICHEVER IS HIGHER. FINE PAID IN FULL JANUARY 8, 2016.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $200,000.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmAllegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT EFFECTEDCUSTOMER TRANSACTIONS IN A MUNICIPAL SECURITY IN AN AMOUNTLOWER THAN THE MINIMUM DENOMINATION OF THE ISSUE WHICH WERENOT SUBJECT TO AN EXCEPTION UNDER THE RULE. THE FINDINGSSTATED THAT THE FIRM FAILED TO DISCLOSE ALL MATERIAL FACTSCONCERNING MUNICIPAL SECURITIES TRANSACTIONS AT OR PRIOR TOTHE TIME OF TRADE. SPECIFICALLY, THE FIRM FAILED TO INFORM ITSCurrent Status:Final50©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:12/22/2015Docket/Case Number:2014041832801Principal Product Type:Debt - MunicipalOther Product Type(s):CUSTOMER THAT THE MUNICIPAL SECURITIES TRANSACTION WAS IN ANAMOUNT BELOW THE MINIMUM DENOMINATION OF THE ISSUE.Resolution Date:12/22/2015Resolution:Other Sanctions Ordered:RESCISSIONSanction Details:THE FIRM WAS CENSURED, FINED $200,000 AND MUST OFFER RESCISSIONTO THE CUSTOMERS WHO PURCHASED SECURITIES AT EITHER THEORIGINAL PURCHASE PRICE OR THE CURRENT FAIR MARKET VALUE,WHICHEVER IS HIGHER.Sanctions Ordered:CensureMonetary/Fine $200,000.00Acceptance, Waiver & Consent(AWC)Disclosure 12 of 92iReporting Source:RegulatorAllegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT FROMJANUARY 2009 THROUGH SEPTEMBER 2014, THE FIRM FAILED TOREASONABLY SUPERVISE AND TO HAVE AN ADEQUATE SUPERVISORYSYSTEM, INCLUDING ADEQUATE WRITTEN SUPERVISORY PROCEDURES(WSPS), TO ADDRESS SHORT POSITIONS IN TAX-EXEMPT MUNICIPALBONDS THAT RESULTED PRIMARILY FROM TRADING ERRORS. THEFINDINGS STATED THAT AS A RESULT OF THESE SUPERVISORY FAILURES,THE FIRM INACCURATELY REPRESENTED TO ITS CUSTOMERS HOLDINGMUNICIPAL BONDS THAT AT LEAST $188,974.38 IN INTEREST THAT THEFIRM PAID TO THOSE CUSTOMERS WAS EXEMPT FROM TAXATION. THEFIRM DID NOT HOLD THE BONDS ON BEHALF OF THE CUSTOMERS ANDCurrent Status:Final51©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceTHE INTEREST THAT THE CUSTOMERS RECEIVED WAS PAID BY THE FIRMAND THUS TAXABLE AS ORDINARY INCOME. THE FIRM FAILED TOCONSIDER, AND ITS DIVIDEND DEPARTMENT THAT WAS RESPONSIBLEFOR DISTRIBUTING AND RECONCILING THE INTEREST OWED TOCUSTOMERS DID NOT TAKE INTO ACCOUNT, WHETHER THE INTERESTPAID TO CUSTOMERS SHOULD BE CODED AS NON-TAXABLE WHEN THEINTEREST WAS PAID BY THE FIRM RATHER THAN THE MUNICIPAL ISSUER.THE FINDINGS ALSO STATED THAT THE FIRM DID NOT PROVIDE ADEQUATEGUIDANCE OR OVERSIGHT ON HOW AND WHEN MUNICIPAL SHORTPOSITIONS SHOULD BE COVERED. AS A RESULT OF THE FIRM'SPROCEDURES, OR LACK THEREOF, REGARDING MUNICIPAL SHORTPOSITIONS IN BRANCH ERROR ACCOUNTS AND FIRM TRADINGACCOUNTS, MANY OF THE SHORT POSITIONS WERE NOT COVERED IN ATIMELY FASHION. THIS DEFICIENCY MAY HAVE BEEN PROLONGED DUE TOTHE DIFFICULTY OF COVERING THESE POSITIONS IN LIGHT OF THECHARACTERISTICS OF MUNICIPAL SECURITIES AS WELL AS THE LIMITEDAMOUNT OUTSTANDING OF A PARTICULAR MUNICIPAL BOND. IN 2013, THEFIRM RECOGNIZED THAT SHORT POSITIONS WERE NOT BEING COVEREDIN A TIMELY FASHION AND SUBSEQUENTLY REVISED ITS PROCEDURES TOREDUCE THE NUMBER OF AGED SHORT POSITIONS. NEVERTHELESS,DURING THE RELEVANT PERIOD, THE FIRM OFTEN DID NOT COVERMUNICIPAL SHORT POSITIONS. THE FIRM HAS ALSO IMPLEMENTEDREVISED PROCEDURES TO MINIMIZE ITS SHORT MUNICIPAL BONDPOSITIONS AND TO PROPERLY REPORT FIRM-PAID INTEREST AS TAXABLE.THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILED TO DISCLOSE TOCUSTOMERS THAT THEY WERE NOT RECEIVING TAX-EXEMPT INTERESTWHEN THE FIRM WAS SHORT MUNICIPAL BONDS. IN ADDITION, THE FIRMSENT INACCURATE FORMS 1099 TO CERTAIN CUSTOMERS WHORECEIVED FIRM-PAID INTEREST FOR 2009 THROUGH 2014 AND ALSO SENTINACCURATE ACCOUNT STATEMENTS TO CERTAIN CUSTOMERS THATINCORRECTLY CLASSIFIED FIRM-PAID INTEREST AS TAX-EXEMPT WHEN ITSHOULD HAVE BEEN CLASSIFIED AS TAXABLE. IN 2013, FINRAEXAMINATION STAFF FOUND THAT THE FIRM HAD INACCURATELYREPORTED FIRM-PAID INTEREST FROM SHORT MUNICIPAL BONDPOSITIONS TO CUSTOMERS ON FORMS 1099 AND ACCOUNT STATEMENTS.THEREAFTER, THE FIRM IMPLEMENTED REVISED PROCEDURES TOMINIMIZE ITS SHORT MUNICIPAL POSITIONS AND PROPERLY REPORTFIRM-PAID INTEREST AS TAXABLE ON THE FORMS 1099 ISSUED TOCUSTOMERS. THE FIRM HAS ALSO AGREED IN PRINCIPAL WITH THE IRS TOMAKE A PAYMENT TO RELIEVE ITS CUSTOMERS OF THE BURDEN OFFILING AMENDED TAX RETURNS AND PAYING ADDITIONAL FEDERALINCOME TAX. FINRA FOUND THAT DURING THE RELEVANT PERIOD, THEFIRM DID NOT MAINTAIN RECORDS IDENTIFYING PARTICULAR CUSTOMERACCOUNTS THAT OFFSET ITS SHORT MUNICIPAL BOND POSITIONS. THEFIRM'S SHORT POSITIONS WERE HELD IN AGGREGATE AND NOT52©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:12/22/2015Docket/Case Number:2013038149001Principal Product Type:Debt - MunicipalOther Product Type(s):ALLOCATED TO SPECIFIED CUSTOMERS. BECAUSE THE FIRM'S SHORTMUNICIPAL BOND POSITIONS WERE NOT OFFSET AGAINST SPECIFICCUSTOMER HOLDINGS, THE FIRM WAS UNABLE TO ACCURATELY REPORTTAXABLE INCOME TO ITS CUSTOMERS WHO WERE RECEIVING FIRM-PAIDINTEREST AS TAXABLE INCOME.Resolution Date:12/22/2015Resolution:Other Sanctions Ordered:Sanction Details:THE FIRM WAS CENSURED AND FINED $225,000. FINE PAID IN FULLJANUARY 11, 2016.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $225,000.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmAllegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT FROMJANUARY 2009 THROUGH SEPTEMBER 2014, THE FIRM FAILED TOREASONABLY SUPERVISE AND TO HAVE AN ADEQUATE SUPERVISORYSYSTEM, INCLUDING ADEQUATE WRITTEN SUPERVISORY PROCEDURES(WSPS), TO ADDRESS SHORT POSITIONS IN TAX-EXEMPT MUNICIPALCurrent Status:Final53©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceBONDS THAT RESULTED PRIMARILY FROM TRADING ERRORS. THEFINDINGS STATED THAT AS A RESULT OF THESE SUPERVISORY FAILURES,THE FIRM INACCURATELY REPRESENTED TO ITS CUSTOMERS HOLDINGMUNICIPAL BONDS THAT AT LEAST $188,974.38 IN INTEREST THAT THEFIRM PAID TO THOSE CUSTOMERS WAS EXEMPT FROM TAXATION. THEFIRM DID NOT HOLD THE BONDS ON BEHALF OF THE CUSTOMERS ANDTHE INTEREST THAT THE CUSTOMERS RECEIVED WAS PAID BY THE FIRMAND THUS TAXABLE AS ORDINARY INCOME. THE FIRM FAILED TOCONSIDER, AND ITS DIVIDEND DEPARTMENT THAT WAS RESPONSIBLEFOR DISTRIBUTING AND RECONCILING THE INTEREST OWED TOCUSTOMERS DID NOT TAKE INTO ACCOUNT, WHETHER THE INTERESTPAID TO CUSTOMERS SHOULD BE CODED AS NON-TAXABLE WHEN THEINTEREST WAS PAID BY THE FIRM RATHER THAN THE MUNICIPAL ISSUER.THE FINDINGS ALSO STATED THAT THE FIRM DID NOT PROVIDE ADEQUATEGUIDANCE OR OVERSIGHT ON HOW AND WHEN MUNICIPAL SHORTPOSITIONS SHOULD BE COVERED. AS A RESULT OF THE FIRM'SPROCEDURES, OR LACK THEREOF, REGARDING MUNICIPAL SHORTPOSITIONS IN BRANCH ERROR ACCOUNTS AND FIRM TRADINGACCOUNTS, MANY OF THE SHORT POSITIONS WERE NOT COVERED IN ATIMELY FASHION. THIS DEFICIENCY MAY HAVE BEEN PROLONGED DUE TOTHE DIFFICULTY OF COVERING THESE POSITIONS IN LIGHT OF THECHARACTERISTICS OF MUNICIPAL SECURITIES AS WELL AS THE LIMITEDAMOUNT OUTSTANDING OF A PARTICULAR MUNICIPAL BOND. IN 2013, THEFIRM RECOGNIZED THAT SHORT POSITIONS WERE NOT BEING COVEREDIN A TIMELY FASHION AND SUBSEQUENTLY REVISED ITS PROCEDURES TOREDUCE THE NUMBER OF AGED SHORT POSITIONS. NEVERTHELESS,DURING THE RELEVANT PERIOD, THE FIRM OFTEN DID NOT COVERMUNICIPAL SHORT POSITIONS. THE FIRM HAS ALSO IMPLEMENTEDREVISED PROCEDURES TO MINIMIZE ITS SHORT MUNICIPAL BONDPOSITIONS AND TO PROPERLY REPORT FIRM-PAID INTEREST AS TAXABLE.THE FINDINGS ALSO INCLUDED THAT THE FIRM FAILED TO DISCLOSE TOCUSTOMERS THAT THEY WERE NOT RECEIVING TAX-EXEMPT INTERESTWHEN THE FIRM WAS SHORT MUNICIPAL BONDS. IN ADDITION, THE FIRMSENT INACCURATE FORMS 1099 TO CERTAIN CUSTOMERS WHORECEIVED FIRM-PAID INTEREST FOR 2009 THROUGH 2014 AND ALSO SENTINACCURATE ACCOUNT STATEMENTS TO CERTAIN CUSTOMERS THATINCORRECTLY CLASSIFIED FIRM-PAID INTEREST AS TAX-EXEMPT WHEN ITSHOULD HAVE BEEN CLASSIFIED AS TAXABLE. IN 2013, FINRAEXAMINATION STAFF FOUND THAT THE FIRM HAD INACCURATELYREPORTED FIRM-PAID INTEREST FROM SHORT MUNICIPAL BONDPOSITIONS TO CUSTOMERS ON FORMS 1099 AND ACCOUNT STATEMENTS.THEREAFTER, THE FIRM IMPLEMENTED REVISED PROCEDURES TOMINIMIZE ITS SHORT MUNICIPAL POSITIONS AND PROPERLY REPORTFIRM-PAID INTEREST AS TAXABLE ON THE FORMS 1099 ISSUED TOCUSTOMERS. THE FIRM HAS ALSO AGREED IN PRINCIPAL WITH THE IRS TO54©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:N/ADate Initiated:12/22/2015Docket/Case Number:2013038149001Principal Product Type:Debt - MunicipalOther Product Type(s):MAKE A PAYMENT TO RELIEVE ITS CUSTOMERS OF THE BURDEN OFFILING AMENDED TAX RETURNS AND PAYING ADDITIONAL FEDERALINCOME TAX. FINRA FOUND THAT DURING THE RELEVANT PERIOD, THEFIRM DID NOT MAINTAIN RECORDS IDENTIFYING PARTICULAR CUSTOMERACCOUNTS THAT OFFSET ITS SHORT MUNICIPAL BOND POSITIONS. THEFIRM'S SHORT POSITIONS WERE HELD IN AGGREGATE AND NOTALLOCATED TO SPECIFIED CUSTOMERS. BECAUSE THE FIRM'S SHORTMUNICIPAL BOND POSITIONS WERE NOT OFFSET AGAINST SPECIFICCUSTOMER HOLDINGS, THE FIRM WAS UNABLE TO ACCURATELY REPORTTAXABLE INCOME TO ITS CUSTOMERS WHO WERE RECEIVING FIRM-PAIDINTEREST AS TAXABLE INCOME.Resolution Date:12/22/2015Resolution:Other Sanctions Ordered:Sanction Details:THE FIRM WAS CENSURED AND FINED $225,000.00Sanctions Ordered:CensureMonetary/Fine $225,000.00Acceptance, Waiver & Consent(AWC)Disclosure 13 of 92iReporting Source:RegulatorAllegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOPROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMER THECALL DATE AND DOLLAR PRICE OF THE CALL IN TRANSACTIONS INMUNICIPAL SECURITIES EXECUTED ON THE BASIS OF A YIELD TO CALL.THE FINDINGS STATED THAT THE FIRM ALSO FAILED TO PROVIDECurrent Status:Final55©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:N/ADate Initiated:11/24/2015Docket/Case Number:2014041053201Principal Product Type:OtherOther Product Type(s):MUNICIPAL SECURITIESWRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMER THE CORRECTNEXT POTENTIAL CALL DATE IN TRANSACTIONS IN CONTINUOUSLYCALLABLE MUNICIPAL SECURITIES EXECUTED ON THE BASIS OF A YIELDTO CALL. THE FINDINGS ALSO STATED THAT THE FIRM PROVIDEDWRITTEN NOTIFICATION IMPROPERLY DISCLOSING TO ITS CUSTOMER AYIELD TO CALL IN TRANSACTIONS IN MUNICIPAL SECURITIES WITH AVARIABLE INTEREST RATE. THE FINDINGS ALSO INCLUDED THAT THE FIRMFAILED TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMER THE CORRECT LOWEST EFFECTIVE YIELD IN A TRANSACTIONIN A MUNICIPAL SECURITY. FINRA FOUND THAT THE FIRM'S SUPERVISORYSYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH RESPECT TO APPLICABLE SECURITIESLAWS AND REGULATIONS, AND MSRB RULES, CONCERNING CUSTOMERCONFIRMATIONS FOR MUNICIPAL SECURITIES TRANSACTIONS.Resolution Date:11/24/2015Resolution:Other Sanctions Ordered:UNDERTAKINGSanction Details:THE FIRM WAS CENSURED, FINED $15,000, AND IS REQUIRED TO REVISEITS WSPS.FINE PAID IN FULL ON FEBRUARY 26, 2016.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $15,000.00Acceptance, Waiver & Consent(AWC)56©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceiReporting Source:FirmInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:N/ADate Initiated:11/24/2015Docket/Case Number:2014041053201Principal Product Type:OtherOther Product Type(s):MUNICIPAL SECURITIESAllegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOPROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMER THECALL DATE AND DOLLAR PRICE OF THE CALL IN TRANSACTIONS INMUNICIPAL SECURITIES EXECUTED ON THE BASIS OF A YIELD TO CALL.THE FINDINGS STATED THAT THE FIRM ALSO FAILED TO PROVIDEWRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMER THE CORRECTNEXT POTENTIAL CALL DATE IN TRANSACTIONS IN CONTINUOUSLYCALLABLE MUNICIPAL SECURITIES EXECUTED ON THE BASIS OF A YIELDTO CALL. THE FINDINGS ALSO STATED THAT THE FIRM PROVIDEDWRITTEN NOTIFICATION IMPROPERLY DISCLOSING TO ITS CUSTOMER AYIELD TO CALL IN TRANSACTIONS IN MUNICIPAL SECURITIES WITH AVARIABLE INTEREST RATE. THE FINDINGS ALSO INCLUDED THAT THE FIRMFAILED TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMER THE CORRECT LOWEST EFFECTIVE YIELD IN A TRANSACTIONIN A MUNICIPAL SECURITY. FINRA FOUND THAT THE FIRM'S SUPERVISORYSYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH RESPECT TO APPLICABLE SECURITIESLAWS AND REGULATIONS, AND MSRB RULES, CONCERNING CUSTOMERCONFIRMATIONS FOR MUNICIPAL SECURITIES TRANSACTIONS.Current Status:FinalResolution Date:11/24/2015Resolution:Other Sanctions Ordered:UNDERTAKINGSanctions Ordered:CensureMonetary/Fine $15,000.00Acceptance, Waiver & Consent(AWC)57©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSanction Details:THE FIRM WAS CENSURED, FINED $15,000, AND IS REQUIRED TO REVISEITS WSPS.Disclosure 14 of 92iReporting Source:FirmInitiated By:UNITED STATES OF AMERICA DEPARTMENT OF THE TREASURY FINANCIALCRIMES ENFORCEMENT NETWORKPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Date Initiated:01/26/2015Docket/Case Number:2015-01Principal Product Type:Penny Stock(s)Other Product Type(s):Allegations:THE UNITED STATES OF AMERICA DEPARTMENT OF THE TREASURYFINANCIAL CRIMES ENFORCEMENT NETWORK ("FINCEN") ALLEGED THATOPPENHEIMER & CO. INC. ("OPPENHEIMER") WILLFULLY VIOLATED THEBANK SECRECY ACT BY (A) FAILING TO IMPLEMENT AND ADEQUATE ANTI-MONEY LAUNDERING PROGRAM, 31 U.S.C.S. 5318(H) AND 31 C.F.R.S.1023.210;(B) FAILED TO IMPLEMENT AN ADEQUATE DUE DILIGENCEPROGRAM FOR A FOREIGN CORRESPONDENT ACCOUNT, 31 U.S.C.S.5318(I)(1) AND 31C.F.R.S. 1023.610; AND (C) FAILED TO COMPLY WITHNOTIFICATION REQUIREMENTS UNDER RULES IMPOSING SPECIALMEASURES UNDER SECTION 311 OF THE USA PATRIOT ACT AGAINSTTHREE FOREIGN FINANCIAL INSTITUTIONS OF PRIMARY MONEYLAUNDERING CONCERN. 31 CFRS. 1010.653, 1010.654, 1010.655.Current Status:FinalResolution Date:01/26/2015Resolution:Other Sanctions Ordered:PROVIDE FINCEN COPIES OF ANY REPORTS OR OTHERRECOMMENDATIONS PREPARED BY AN INDEPENDENT CONSULTANTRETAINED TO REVIEW AND PROVIDE RECOMMENDATIONS FOR CERTAINASPECTS OF ITS COMPLIANCE PROGRAM, INCLUDING ITS AML PROGRAM.Sanction Details:OPPENHEIMER ADMITTED THAT IT VIOLATED THE BANK SECRECY ACT ANDSanctions Ordered:Monetary/Fine $20,000,000.00Consent58©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceCONSENTED TO THE ASSESSMENT OF A CIVIL MONEY PENALTY IN THEAMOUNT OF $20 MILLION, OF WHICH $10 MILLION WAS CONCURRENTWITH THE PENALTY, DISGORGEMENT AND PREJUDGMENT INTERESTIMPOSED BY THE SEC IN CONNECTION WITH IN THE MATTER OFOPPENHEIMER & CO. INC., ADMINISTRATIVE PROCEEDING FILE NO. 3-16361 (JAN. 27, 2015). OPPENHEIMER PAID $5 MILLION OF THE $10 MILLIONPENALTY TO FINCEN ON FEBRUARY 9, 2015 AND THE REMAINING $5MILLION PENALTY IS DUE TO BE PAID TO FINCEN BY JANUARY 27, 2017.Disclosure 15 of 92iReporting Source:RegulatorInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:10/07/2015Docket/Case Number:2012034713201Principal Product Type:OtherOther Product Type(s):UNSPECIFIED SECURITIESAllegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT, INTRANSACTIONS FOR OR WITH A CUSTOMER, THE FIRM FAILED TO USEREASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALERMARKET AND FAILED TO BUY OR SELL IN SUCH MARKET SO THAT THERESULTANT PRICE TO ITS CUSTOMERS WAS AS FAVORABLE AS POSSIBLEUNDER PREVAILING MARKET CONDITIONS. THESE VIOLATIONS RESULTEDIN A TOTAL OF $109.15 IN RESTITUTION, WHICH THE FIRM HAS CONFIRMEDWAS PAID. THE FINDINGS STATED THAT THE FIRM FAILED TO ACCURATELYREPORT THE CORRECT EXECUTION PRICE TO THE OVER-THE-COUNTERREPORTING FACILITY (OTCRF) AND FAILED TO SHOW THE CORRECTORDER RECEIPT TIME AND TIME OF EXECUTION ON THE MEMORANDUMOF BROKERAGE ORDERS. THE FINDINGS ALSO STATED THAT THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TOTHE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND NASD ANDFINRA RULES PERTAINING TO THE FIRM'S BEST EXECUTION OBLIGATIONSIN OTC SECURITIES.Current Status:Final59©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceResolution Date:10/07/2015Resolution:Other Sanctions Ordered:Sanction Details:THE FIRM WAS CENSURED AND FINED $21,000.FINE PAID IN FULL ON NOVEMBER 4, 2015.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $21,000.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmInitiated By:FINRADate Initiated:10/07/2015Docket/Case Number:2012034713201Allegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT, INTRANSACTIONS FOR OR WITH A CUSTOMER, THE FIRM FAILED TO USEREASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALERMARKET AND FAILED TO BUY OR SELL IN SUCH MARKET SO THAT THERESULTANT PRICE TO ITS CUSTOMERS WAS AS FAVORABLE AS POSSIBLEUNDER PREVAILING MARKET CONDITIONS. THESE VIOLATIONS RESULTEDIN A TOTAL OF $109.15 IN RESTITUTION, WHICH THE FIRM HAS CONFIRMEDWAS PAID. THE FINDINGS STATED THAT THE FIRM FAILED TO ACCURATELYREPORT THE CORRECT EXECUTION PRICE TO THE OVER-THE-COUNTERREPORTING FACILITY (OTCRF) AND FAILED TO SHOW THE CORRECTORDER RECEIPT TIME AND TIME OF EXECUTION ON THE MEMORANDUMOF BROKERAGE ORDERS. THE FINDINGS ALSO STATED THAT THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TOTHE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND NASD ANDFINRA RULES PERTAINING TO THE FIRM'S BEST EXECUTION OBLIGATIONSIN OTC SECURITIES.Current Status:Final60©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Principal Product Type:OtherOther Product Type(s):UNSPECIFIED SECURITIESResolution Date:10/07/2015Resolution:Other Sanctions Ordered:Sanction Details:THE FIRM WAS CENSURED AND FINED $21,000.Sanctions Ordered:CensureMonetary/Fine $21,000.00Acceptance, Waiver & Consent(AWC)Disclosure 16 of 92iReporting Source:RegulatorInitiated By:CHICAGO BOARD OPTIONS EXCHANGEPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Date Initiated:07/30/2015Docket/Case Number:15-0079/ 20150462954Principal Product Type:OptionsOther Product Type(s):Allegations:OPPENHEIMER & CO. INC. ("OPPENHEIMER"), AN EXCHANGE TPHORGANIZATION, WAS CENSURED AND FINED $20,000 FOR: (I) FAILING TOREGISTER TWO (2) ASSOCIATED PERSONS AS A PROPRIETARY TRADERPRINCIPAL (TP) WITH THE EXCHANGE IN WEBCRD; (II) FAILING TOREGISTER FIVE (5) ASSOCIATED PERSONS AS A PROPRIETARY TRADER(PT) WITH THE EXCHANGE IN WEBCRD; AND (III) FAILING TO REGISTER ITSCHIEF COMPLIANCE OFFICER AS A PROPRIETARY TRADER COMPLIANCEOFFICER (CT) WITH THE EXCHANGE IN WEBCRD. (EXCHANGE RULE 3.6A -QUALIFICATION AND REGISTRATION OF TRADING PERMIT HOLDERS ANDASSOCIATED PERSONS)Current Status:Final61©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceResolution Date:10/20/2015Resolution:Other Sanctions Ordered:Sanction Details:A $20,000 FINE AND A CENSURE.Sanctions Ordered:CensureMonetary/Fine $20,000.00Decision & Order of Offer of SettlementiReporting Source:FirmInitiated By:CHICAGO BOARD OPTIONS EXCHANGEPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Date Initiated:07/30/2015Docket/Case Number:15-0079/ 20150462954Principal Product Type:OptionsOther Product Type(s):Allegations:IN JULY, 2015 , THE BUSINESS CONDUCT COMMITTEE OF THE CHICAGOBOARD OPTIONS EXCHANGE ISSUED A STATEMENT OF CHARGES, IN THEMATTER OF OPPENHEIMER & CO. INC. STAR NO. 20150462954, ALLEGINGTHAT OPPENHEIMER VIOLATE EXCHANGE RULE 3.6A BY FAILING TO TWOASSOCIATED PERSONS AS PROPRIETARY TRADER PRINCIPALS,5ASSOCIATED PERSONS AS PROPRIETARY TRADERS, AND THE CHIEFCOMPLIANCE OFFICER AS PROPRIETARY TRADER COMPLIANCE OFFICER.Current Status:FinalResolution Date:10/20/2015Resolution:Other Sanctions Ordered:A $20,000 FINE AND A CENSURE.Sanction Details:ON OCTOBER 20, 2015 THE BUSINESS CONDUCT COMMITTEE OF THECHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED UNDER FILE NO.15-0070, STAR NO. 20150462954 ISSUED ITS DECISION ACCEPTING THESanctions Ordered:CensureMonetary/Fine $20,000.00Decision & Order of Offer of Settlement62©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOFFER OF SETTLEMENT IN THE MATTER OF OPPENHEIMER & CO. INC.("THE DECISION"). THE DECISION DETERMINED THAT OPPENHEIMER WASAN EXCHANGE TRADING PERMIT HOLDER APPROVED TO TRANSACTBUSINESS WITH THE PUBLIC. AS A RESULT OF A ROUTINE EXAMINATION ITWAS DETERMINED THAT ON VARIOUS DATES FROM NOVEMBER 5, 2011THROUGH JUNE 9, 2014, OPPENHEIMER FAILED TO REGISTER TWO (2)ASSOCIATED PERSONS AS PROPRIETARY TRADING PRINCIPAL WITHCBOE. DURING THE SAME PERIOD OF TIME OPPENHEIMER FAILED TOREGISTER FICE (5) ASSOCIATED PERSONS AS PROPRIETARY TRADERS,AND FROM MAY 1, 2013 THROUGH SEPTEMBER 17, 2013 OPPENHEIMERFAILED TO REGISTER ITS CHIEF COMPLIANCE OFFICER AS APROPRIETARY TRADING COMPLIANCE OFFICER. OPPENHEIMER WASSANCTIONED, AND ORDERED TO PAY $20,000.00 TO THE CBOE.Disclosure 17 of 92iReporting Source:FirmInitiated By:NEW MEXICO SECURITIES DIVISIONPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:11/20/2014Docket/Case Number:14-03-0028Principal Product Type:OtherOther Product Type(s):BANK BONDSAllegations:IN NOVEMBER, 2014 THE NEW MEXICO SECURITIES DIVISION FILED ANOTICE OF CONTEMPLATED ACTION, IN THE MATTER OF OPPENHEIMERAND ROYCE SIMPSON, NN. 14-03-0028 ('THE NOTICE"). THE NOTICEALLEGED THAT CERTAIN FEDERAL NATIONAL MORTGAGE ASSOCIATIONAND FEDERAL LOAN HOME BANK BONDS, PURCHASED BY BERNALILLOCOUNTY WERE UNSUITABLE, AND THAT CO- RESPONDENT SIMPSON'SACTIVITIES WEREN'T SUPERVISED. THE MATTER HAS NOT BEENSCHEDULED FOR A HEARING.Current Status:FinalResolution Date:10/19/2015Resolution:Sanctions Ordered:Monetary/Fine $215,000.00Stipulation and Consent63©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:Sanction Details:ON OCTOBER 19, 2015 OPPENHEIMER & CO. INC. ("OPPENHEIMER")ENTERED A STIPULATION AND AGREEMENT WITH THE DIRECTOR OF THESECURITIES DIVISION OF THE NEW MEXICO REGULATION AND LICENSINGDEPARTMENT RESOLVING A NOTICE OF CONTEMPLATED ACTION, DATEDNOVEMBER 20, 2014, CAPTIONED IN THE MATTER OF OPPENHEIMER & CO.INC. AND ROYCE SIMPSON, CASE NO. 14-03-0028. THE STIPULATION ANDAGREEMENT DETERMINED THAT THE DIVISION, WHILE REVIEWING THETRADING ACTIVITY FOR BERNALILLO COUNTY FROM 2012 THROUGH 2013,DETERMINED THAT THERE MAY HAVE BEEN CERTAIN SUPERVISORYDEFICIENCIES AT OPPENHEIMER IN ADVISING THE TREASURER'S OFFICEOF BERNALILLO COUNTY DURING THE PERIOD OF TIME IN QUESTIONTHROUGH OPPENHEIMER'S AGENT, ROYCE SIMPSON. OPPENHEIMERDISPUTES THAT CLAIM AS SET FORTH IN THE NOTICE OF CONTEMPLATEDACTION; FURTHER, THE STIPULATION AND AGREEMENT WAS NOTINTENDED TO MODIFY ANY OF OPPENHEIMER'S OBLIGATIONS UNDEREXISTING LAW, AND IN FACT OPPENHEIMER MADE CERTAIN REVISIONS INITS INTERNAL POLICIES INVOLVING THE INVESTMENT OF PUBLIC FUNDS.OPPENHEIMER ALSO AGREED TO REMIT TO THE DIVISION THE AMOUNTOF $215,000.00, TO BE ALLOCATED TO THE INVESTOR EDUCATION FUNDFOR THE BENEFIT OF LICENSEES AND CONSUMERS WITHIN OF NEWMEXICO. OPPENHEIMER MADE THAT PAYMENT ON NOVEMBER 7, 2015.OPPENHEIMER ALSO AGREED TO COMMIT TO A FULL IMPLEMENTATION OFIMPROVED SUPERVISORY PROCEDURES, WHICH IT ALREADY ADOPTED,FOR SERVICING POLITICAL SUBDIVISIONS THROUGHOUT NEW MEXICO. ASA RESULT, THE DIVISION RELEASED AND DISCHARGED OPPENHEIMERFROM MANY AND ALL CLAIMS, AND DISMISSED THE NOTICE OFCONTEMPLATED ACTION WITH PREJUDICE AGAINST OPPENHEIMER.Disclosure 18 of 92iReporting Source:FirmInitiated By:INVESTOR PROTECTION DIRECTOR FOR THE STATE OF DELAWAREDate Initiated:06/25/2015Docket/Case Number:IPU CASE NO. 11-2-4Principal Product Type:OtherAllegations:DELAWARE ALLEGES THAT THE FIRM VIOLATED 6DEL C 7316(A)(10) (2002)BY FAILING TO SUPERVISE AN FA AND FAILING TO COMPLY WITH CERTAINASPECTS OF ITS COMPLIANCE SYSTEM.Current Status:Final64©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:UNDERTAKINGOther Product Type(s):VARIOUS INVESTMENTSResolution Date:06/25/2015Resolution:Other Sanctions Ordered:UNDERTAKINGSSanction Details:WITHOUT ADMITTING OR DENYING ANY WRONGDOING ON THE PART OFOPPENHEIMER OR ANY OF ITS AGENTS OR FORMER AGENTS,OPPENHEIMER AGREED TO PAY $685,000. TO THE DELAWARE INVESTORPROTECTION FUND AND AGREED TO CERTAIN UNDERTAKINGS.OPPENHEIMER PAID THE PENALTY ON OR ABOUT JULY 2, 2015 AND WASORDERED TO REFRAIN FROM COMMITTING ANY FUTURE VIOLATIONS OFTHE ACT.Firm StatementTHE AFOREMENTIONED UNDERTAKINGS AGREED TO ARE AS FOLLOWS:OPPENHEIMER SHALL DEVELOP AND MAINTAIN POLICIES, PROCEDURESAND SYSTEMS THAT REASONABLY SUPERVISE THE ACTIVIITES OF ITSBROKER-DEALER AGENTS, INVESTMENT ADVISORS, AND BRANCH OFFICEMANAGERS, AND ENSURE FULL COMPLIANCE BY ITS OFFICERS, AGENTS,EMPLOYEES, AND REPRESENTATIVES WITH THEIR AND OPPENHEIMERSRESPONSIBILITIES TO THEIR CLIENTS.Sanctions Ordered:Monetary/Fine $685,000.00ConsentDisclosure 19 of 92iReporting Source:RegulatorAllegations:SEC ADMIN RELEASES 33-9836; 34-75230, JUNE 18, 2015: THE SECURITIESAND EXCHANGE COMMISSION DEEMS IT APPROPRIATE AND IN THEPUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESISTPROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINSTOPPENHEIMER & CO. INC. ("RESPONDENT"). RESPONDENT WILLFULLYVIOLATED SECTION 17(A)(2) OF THE SECURITIES ACT. THIS MATTERINVOLVES VIOLATIONS OF AN ANTIFRAUD PROVISION OF THE FEDERALSECURITIES LAWS IN CONNECTION WITH RESPONDENT'S UNDERWRITINGOF CERTAIN MUNICIPAL SECURITIES OFFERINGS. RESPONDENT, AREGISTERED BROKER-DEALER, CONDUCTED INADEQUATE DUEDILIGENCE IN CERTAIN OFFERINGS AND AS A RESULT, FAILED TO FORM ACurrent Status:Final65©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:UNITED STATES SECURITIES AND EXCHANGE COMMISSIONPrincipal Sanction(s)/ReliefSought:Cease and DesistOther Sanction(s)/ReliefSought:Date Initiated:06/18/2015Docket/Case Number:3-16629Principal Product Type:Debt - MunicipalOther Product Type(s):REASONABLE BASIS FOR BELIEVING THE TRUTHFULNESS OF CERTAINMATERIAL REPRESENTATIONS IN OFFICIAL STATEMENTS ISSUED INCONNECTION WITH THOSE OFFERINGS. THIS RESULTED IN RESPONDENTOFFERING AND SELLING MUNICIPAL SECURITIES ON THE BASIS OFMATERIALLY MISLEADING DISCLOSURE DOCUMENTS.THE VIOLATIONS WERE SELF-REPORTED BY RESPONDENT TO THECOMMISSION PURSUANT TO THE DIVISION OF ENFORCEMENT'S (THE "DIVISION") MUNICIPALITIES CONTINUING DISCLOSURE COOPERATION(MCDC) INITIATIVE.Resolution Date:06/18/2015Resolution:Other Sanctions Ordered:UNDERTAKINGSSanction Details:THE RESPONDENT SHALL CEASE AND DESIST FROM COMMITTING ORCAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTION17(A)(2)OF THE SECURITIES ACT, PAY A CIVIL MONEY PENALTY IN THEAMOUNT OF $400,000 AND COMPLY WITH THE UNDERTAKINGSENUMERATED IN THE OFFER OF SETTLEMENT.Regulator StatementIN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS,RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER")WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. SOLELY FOR THEPURPOSE OF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGSDoes the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?YesSanctions Ordered:Monetary/Fine $400,000.00Cease and Desist/InjunctionOrder66©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceBROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THECOMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THEFINDINGS, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT ANDTHE SUBJECT MATTER OF THESE PROCEEDINGS, WHICH ARE ADMITTED,RESPONDENT CONSENTS TO THE ENTRY OF THIS ORDER INSTITUTINGADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TOSECTION 8A OF THE SECURITIES ACT OF 1933 AND SECTION 15(B) OF THESECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSINGREMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER. IN VIEW OF THEFOREGOING, THE COMMISSION DEEMS IT APPROPRIATE AND IN THEPUBLIC INTEREST TO IMPOSE THE SANCTIONS AGREED TO INRESPONDENT'S OFFER. ACCORDINGLY, IT IS HEREBY ORDERED THATRESPONDENT SHALL, CEASE AND DESIST FROM COMMITTING ORCAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF 17(A)(2)OFTHE SECURITIES ACT; WITHIN TEN (10) DAYS OF THE ENTRY OF THISORDER, PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $400,000 TO THESECURITIES AND EXCHANGE COMMISSION; AND RETAIN AN INDEPENDENTCONSULTANT TO CONDUCT A REVIEW OF RESPONDENT'S POLICIES ANDPROCEDURES AS THEY RELATE TO MUNICIPAL SECURITIESUNDERWRITING DUE DILIGENCEiReporting Source:FirmAllegations:SEC ADMIN RELEASES 33-9836; 34-75230, JUNE 18, 2015: THE SECURITIESAND EXCHANGE COMMISSION DEEMS IT APPROPRIATE AND IN THEPUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESISTPROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINSTOPPENHEIMER & CO. INC. ("RESPONDENT"). RESPONDENT WILLFULLYVIOLATED SECTION 17(A)(2) OF THE SECURITIES ACT. THIS MATTERINVOLVES VIOLATIONS OF AN ANTIFRAUD PROVISION OF THE FEDERALSECURITIES LAWS IN CONNECTION WITH RESPONDENT'S UNDERWRITINGOF CERTAIN MUNICIPAL SECURITIES OFFERINGS. RESPONDENT, AREGISTERED BROKER-DEALER, CONDUCTED INADEQUATE DUEDILIGENCE IN CERTAIN OFFERINGS AND AS A RESULT, FAILED TO FORM AREASONABLE BASIS FOR BELIEVING THE TRUTHFULNESS OF CERTAINMATERIAL REPRESENTATIONS IN OFFICIAL STATEMENTS ISSUED INCONNECTION WITH THOSE OFFERINGS. THIS RESULTED IN RESPONDENTOFFERING AND SELLING MUNICIPAL SECURITIES ON THE BASIS OFMATERIALLY MISLEADING DISCLOSURE DOCUMENTS. THE VIOLATIONSWERE SELF-REPORTED BY RESPONDENT TO THE COMMISSIONPURSUANT TO THE DIVISION OF ENFORCEMENT'S (THE "DIVISION")MUNICIPALITIES CONTINUING DISCLOSURE COOPERATION (MCDC)INITIATIVE. OPPENHEIMER UNDERSTANDS THAT ON THE SAME DATE, THECurrent Status:Final67©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:UNITED STATES SECURITIES AND EXCHANGE COMMISSIONPrincipal Sanction(s)/ReliefSought:Cease and DesistOther Sanction(s)/ReliefSought:Date Initiated:06/18/2015Docket/Case Number:3-16629Principal Product Type:Debt - MunicipalOther Product Type(s):SEC ANNOUNCED PUBLIC ADMINISTRATIVE AND CEASE AND DESISTPRECEEDINGS SIMILIAR TO THE ONE DISCLOSED HEREIN AGAINSTTHIRTY FIVE (35) OTHER UNDERWRITER BROKER/DEALERS.Resolution Date:06/18/2015Resolution:Other Sanctions Ordered:UNDERTAKINGSSanction Details:THE RESPONDENT SHALL CEASE AND DESIST FROM COMMITTING ORCAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTION17(A)(2)OF THE SECURITIES ACT, PAY A CIVIL MONEY PENALTY IN THEAMOUNT OF $400,000 AND COMPLY WITH THE UNDERTAKINGSENUMERATED IN THE OFFER OF SETTLEMENT.Firm StatementIN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS,RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER")WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. SOLELY FOR THEPURPOSE OF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGSBROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TO WHICH THECOMMISSION IS A PARTY, AND WITHOUT ADMITTING OR DENYING THEFINDINGS, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT ANDTHE SUBJECT MATTER OF THESE PROCEEDINGS, WHICH ARE ADMITTED,RESPONDENT CONSENTS TO THE ENTRY OF THIS ORDER INSTITUTINGADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TOSECTION 8A OF THE SECURITIES ACT OF 1933 AND SECTION 15(B) OF THESECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSINGREMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER. IN VIEW OF THEFOREGOING, THE COMMISSION DEEMS IT APPROPRIATE AND IN THEPUBLIC INTEREST TO IMPOSE THE SANCTIONS AGREED TO INRESPONDENT'S OFFER. ACCORDINGLY, IT IS HEREBY ORDERED THATSanctions Ordered:Monetary/Fine $400,000.00Cease and Desist/InjunctionOrder68©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceRESPONDENT SHALL, CEASE AND DESIST FROM COMMITTING ORCAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF 17(A)(2)OFTHE SECURITIES ACT; WITHIN TEN (10) DAYS OF THE ENTRY OF THISORDER, PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $400,000 TO THESECURITIES AND EXCHANGE COMMISSION; AND RETAIN AN INDEPENDENTCONSULTANT TO CONDUCT A REVIEW OF RESPONDENT'S POLICIES ANDPROCEDURES AS THEY RELATE TO MUNICIPAL SECURITIESUNDERWRITING DUE DILIGENCEDisclosure 20 of 92iReporting Source:RegulatorAllegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOSUPERVISE ITS REGISTERED REPRESENTATIVE WHO MISAPPROPRIATEDFUNDS FROM HIS CUSTOMERS AND EXCESSIVELY TRADED THEIRACCOUNT. FINRA BARRED THE REPRESENTATIVE FOR, AMONG OTHERTHINGS, STEALING APPROXIMATELY $6 MILLION FROM HIS CUSTOMERSAND EXCESSIVELY TRADING AND CHURNING HIS CUSTOMERS'ACCOUNTS, IN WILLFUL VIOLATION OF SECTION 10(B) OF THE SECURITIESEXCHANGE ACT AND RULE 10B-5 THEREUNDER. THE FINDINGS STATEDTHAT THE FIRM FAILED TO CONDUCT AN ADEQUATE PRE-HIREINVESTIGATION OF THE REPRESENTATIVE AND FAILED TO PLACE HIM ONHEIGHTENED SUPERVISION. THE FIRM FAILED TO INVESTIGATE THECIRCUMSTANCES OF THE TWELVE DISCLOSURES THAT APPEARED IN HISCRD RECORD OR SUBJECT HIM TO HEIGHTENED SUPERVISION. WHENTHE REPRESENTATIVE JOINED THE FIRM, HIS CRD RECORD REPORTABLEEVENTS INCLUDED CRIMINAL CHARGES INVOLVING LARCENY ORPOSSESSION OF STOLEN PROPERTY, A TERMINATION FOR CAUSE, A NEWYORK STOCK EXCHANGE INVESTIGATION, A PERSONAL BANKRUPTCY,AND CUSTOMER COMPLAINTS THAT WITH ALLEGED UNAUTHORIZEDTRADING. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TOSUPERVISE THE REPRESENTATIVE. THE FIRM WAS MADE AWARE THAT HEWAS ENGAGED IN UNDISCLOSED OUTSIDE BUSINESS ACTIVITIES, ANDFAILED TO MONITOR OR IDENTIFY NUMEROUS RED FLAGSDEMONSTRATING THAT HE AND/OR ITS CUSTOMERS WERE WIRINGCUSTOMER FUNDS TO ACCOUNTS HE CONTROLLED. THE FIRM FAILED TOPLACE HIM ON HEIGHTENED SUPERVISION AFTER IT BECAME AWARE OFSERIOUS ALLEGATIONS OF FRAUD AND DECEIT THAT HE SETTLED FOR $3MILLION. THE FIRM FAILED TO TAKE ACTION TO RESTRICT HIS TRADING INCUSTOMER ACCOUNTS AFTER ITS INTERNAL ANALYSIS SHOWED THAT HEWAS TRADING MULTIPLE CUSTOMER ACCOUNTS AT LEVELS CONSIDEREDPRESUMPTIVELY EXCESSIVE. THE FINDINGS ALSO INCLUDED THAT THECurrent Status:Final69©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRADate Initiated:03/26/2015Docket/Case Number:2009017408102Principal Product Type:OtherOther Product Type(s):UNSPECIFIED SECURITYFIRM FAILED TO MAINTAIN POLICIES AND PROCEDURES CAPABLE OFDETECTING AND PREVENTING CERTAIN POTENTIALLY FRAUDULENTTHIRD PARTY WIRES, INCLUDING WIRES BETWEEN ITS CUSTOMERS'ACCOUNTS AND ITS REGISTERED REPRESENTATIVES OR THEIR OUTSIDEBUSINESS ACTIVITIES. FINRA FOUND THAT FOR OVER THREE YEARS THEFIRM'S PROCEDURES RELATED TO EXCESSIVE TRADING WEREUNREASONABLE BECAUSE THEY DID NOT PROVIDE FOR SPECIFIC ACTIONTO BE TAKEN WHEN TRADING ACTIVITY WAS UNSUITABLE FOR ANYCUSTOMER OR WHEN CUSTOMER ACCOUNTS REPEATEDLY TRIGGEREDTHE FIRM'S EXCEPTION REPORTS. THE FIRM'S INADEQUATEPROCEDURES RELATED TO EXCESSIVE TRADING CONTRIBUTED TO ITSFAILURE TO REASONABLY SUPERVISE ITS REPRESENTATIVE. FINRA ALSOFOUND THAT THE FIRM, THROUGH ITS LEGAL DEPARTMENT, FAILED TOTIMELY MAKE 320 REQUIRED UPDATES RELATED TO ARBITRATIONS ANDOTHER LEGAL MATTERS ON FORMS U4 AND U5 FILINGS. AS A RESULT,REGULATORS, THE INVESTING PUBLIC, AND OTHER MEMBER FIRMS WEREUNAWARE OF SERIOUS ALLEGATIONS MADE AGAINST THE FIRM'SCURRENT AND FORMER REGISTERED REPRESENTATIVES, INCLUDINGTHIS PARTICULAR REPRESENTATIVE. MOREOVER, PERSONNEL IN THEFIRM'S LEGAL DEPARTMENT WERE AWARE THAT THE DEPARTMENT WASNOT MAKING TIMELY FILINGS. THE FIRM'S LEGAL DEPARTMENT ALSOCONTINUED TO FAIL TO MAKE CERTAIN REQUIRED FILINGS EVEN AFTER ITWAS PUT ON NOTICE OF THE NECESSITY OF MAKING SPECIFIC FILINGSBY FINRA. THE FIRM FAILED TO MAINTAIN OR IMPLEMENT SUPERVISORYPROCEDURES RELATED TO FILING U4 AND U5 AMENDMENTS. IN ADDITION,FINRA DETERMINED THAT THE FIRM FAILED TO TIMELY RESPOND TOFINRA'S REQUESTS FOR DOCUMENTS AND INFORMATION RELATED TOTHE REPRESENTATIVE AND THE FIRM'S SUPERVISION OF THEREPRESENTATIVE. MOREOVER, FINRA FOUND THAT THE FIRM FAILED TOMAINTAIN IN A READILY ACCESSIBLE FORMAT ITS RECORDS OF ITSSUPERVISORS' REVIEWS OF THE REPRESENTATIVE'S EMAILEDCORRESPONDENCE. AS A RESULT, THE FIRM FAILED TO PRODUCERECORDS REFLECTING THE SUPERVISORY REVIEW OF ITSREPRESENTATIVE'S EMAILS UNTIL MORE THAN TWO YEARS AFTER THEYWERE ORIGINALLY REQUESTED BY FINRA, AND AFTER ORIGINALLYREPRESENTING TO FINRA THAT IT DID NOT MAINTAIN THE RECORDS.70©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:N/AResolution Date:03/26/2015Resolution:Other Sanctions Ordered:UNDERTAKINGS;THE FIRM UNDERSTANDS THAT THIS SETTLEMENT INCLUDES A FINDINGTHAT IT FAILED TO SUPERVISE AN INDIVIDUAL WHO VIOLATED SECTION10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND THAT UNDERARTICLE III, SECTION 4 OF FINRA'S BY-LAWS, THIS MAKES THE FIRMSUBJECT TO A STATUTORY DISQUALIFICATION WITH RESPECT TOMEMBERSHIP.Sanction Details:THE FIRM IS CENSURED, FINED $2,500,000, ORDERED TO PAY $1,251,076.10IN RESTITUTION TO CUSTOMERS AND REQUIRED TO RETAIN ANINDEPENDENT CONSULTANT TO CONDUCT A COMPREHENSIVE REVIEWOF THE ADEQUACY OF THE FIRM'S SUPERVISORY POLICIES, SYSTEMSAND PROCEDURES (WRITTEN AND OTHERWISE) AND TRAINING RELATINGTO WIRE TRANSFERS, FORM U4/U5 REPORTING, AND EXCESSIVETRADING. 04/22/2015 FINE PAID IN FULL.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $2,500,000.00Disgorgement/RestitutionAcceptance, Waiver & Consent(AWC)iReporting Source:FirmAllegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOSUPERVISE ITS REGISTERED REPRESENTATIVE WHO MISAPPROPRIATEDFUNDS FROM HIS CUSTOMERS AND EXCESSIVELY TRADED THEIRACCOUNT. FINRA BARRED THE REPRESENTATIVE FOR, AMONG OTHERTHINGS, STEALING APPROXIMATELY $6 MILLION FROM HIS CUSTOMERSCurrent Status:Final71©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceAND EXCESSIVELY TRADING AND CHURNING HIS CUSTOMERS'ACCOUNTS, IN WILLFUL VIOLATION OF SECTION 10(B) OF THE SECURITIESEXCHANGE ACT AND RULE 10B-5 THEREUNDER. THE FINDINGS STATEDTHAT THE FIRM FAILED TO CONDUCT AN ADEQUATE PRE-HIREINVESTIGATION OF THE REPRESENTATIVE AND FAILED TO PLACE HIM ONHEIGHTENED SUPERVISION. THE FIRM FAILED TO INVESTIGATE THECIRCUMSTANCES OF THE TWELVE DISCLOSURES THAT APPEARED IN HISCRD RECORD OR SUBJECT HIM TO HEIGHTENED SUPERVISION. WHENTHE REPRESENTATIVE JOINED THE FIRM, HIS CRD RECORD REPORTABLEEVENTS INCLUDED CRIMINAL CHARGES INVOLVING LARCENY ORPOSSESSION OF STOLEN PROPERTY, A TERMINATION FOR CAUSE, A NEWYORK STOCK EXCHANGE INVESTIGATION, A PERSONAL BANKRUPTCY,AND CUSTOMER COMPLAINTS THAT WITH ALLEGED UNAUTHORIZEDTRADING. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TOSUPERVISE THE REPRESENTATIVE. THE FIRM WAS MADE AWARE THAT HEWAS ENGAGED IN UNDISCLOSED OUTSIDE BUSINESS ACTIVITIES, ANDFAILED TO MONITOR OR IDENTIFY NUMEROUS RED FLAGSDEMONSTRATING THAT HE AND/OR ITS CUSTOMERS WERE WIRINGCUSTOMER FUNDS TO ACCOUNTS HE CONTROLLED. THE FIRM FAILED TOPLACE HIM ON HEIGHTENED SUPERVISION AFTER IT BECAME AWARE OFSERIOUS ALLEGATIONS OF FRAUD AND DECEIT THAT HE SETTLED FOR $3MILLION. THE FIRM FAILED TO TAKE ACTION TO RESTRICT HIS TRADING INCUSTOMER ACCOUNTS AFTER ITS INTERNAL ANALYSIS SHOWED THAT HEWAS TRADING MULTIPLE CUSTOMER ACCOUNTS AT LEVELS CONSIDEREDPRESUMPTIVELY EXCESSIVE. THE FINDINGS ALSO INCLUDED THAT THEFIRM FAILED TO MAINTAIN POLICIES AND PROCEDURES CAPABLE OFDETECTING AND PREVENTING CERTAIN POTENTIALLY FRAUDULENTTHIRD PARTY WIRES, INCLUDING WIRES BETWEEN ITS CUSTOMERS'ACCOUNTS AND ITS REGISTERED REPRESENTATIVES OR THEIR OUTSIDEBUSINESS ACTIVITIES. FINRA FOUND THAT FOR OVER THREE YEARS THEFIRM'S PROCEDURES RELATED TO EXCESSIVE TRADING WEREUNREASONABLE BECAUSE THEY DID NOT PROVIDE FOR SPECIFIC ACTIONTO BE TAKEN WHEN TRADING ACTIVITY WAS UNSUITABLE FOR ANYCUSTOMER OR WHEN CUSTOMER ACCOUNTS REPEATEDLY TRIGGEREDTHE FIRM'S EXCEPTION REPORTS. THE FIRM'S INADEQUATEPROCEDURES RELATED TO EXCESSIVE TRADING CONTRIBUTED TO ITSFAILURE TO REASONABLY SUPERVISE ITS REPRESENTATIVE. FINRA ALSOFOUND THAT THE FIRM, THROUGH ITS LEGAL DEPARTMENT, FAILED TOTIMELY MAKE 320 REQUIRED UPDATES RELATED TO ARBITRATIONS ANDOTHER LEGAL MATTERS ON FORMS U4 AND U5 FILINGS. AS A RESULT,REGULATORS, THE INVESTING PUBLIC, AND OTHER MEMBER FIRMS WEREUNAWARE OF SERIOUS ALLEGATIONS MADE AGAINST THE FIRM'SCURRENT AND FORMER REGISTERED REPRESENTATIVES, INCLUDINGTHIS PARTICULAR REPRESENTATIVE. MOREOVER, PERSONNEL IN THEFIRM'S LEGAL DEPARTMENT WERE AWARE THAT THE DEPARTMENT WAS72©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:N/ADate Initiated:03/26/2015Docket/Case Number:2009017408102Principal Product Type:OtherOther Product Type(s):UNSPECIFIED SECURITIESNOT MAKING TIMELY FILINGS. THE FIRM'S LEGAL DEPARTMENT ALSOCONTINUED TO FAIL TO MAKE CERTAIN REQUIRED FILINGS EVEN AFTER ITWAS PUT ON NOTICE OF THE NECESSITY OF MAKING SPECIFIC FILINGSBY FINRA. THE FIRM FAILED TO MAINTAIN OR IMPLEMENT SUPERVISORYPROCEDURES RELATED TO FILING U4 AND U5 AMENDMENTS. IN ADDITION,FINRA DETERMINED THAT THE FIRM FAILED TO TIMELY RESPOND TOFINRA'S REQUESTS FOR DOCUMENTS AND INFORMATION RELATED TOTHE REPRESENTATIVE AND THE FIRM'S SUPERVISION OF THEREPRESENTATIVE. MOREOVER, FINRA FOUND THAT THE FIRM FAILED TOMAINTAIN IN A READILY ACCESSIBLE FORMAT ITS RECORDS OF ITSSUPERVISORS' REVIEWS OF THE REPRESENTATIVE'S EMAILEDCORRESPONDENCE. AS A RESULT, THE FIRM FAILED TO PRODUCERECORDS REFLECTING THE SUPERVISORY REVIEW OF ITSREPRESENTATIVE'S EMAILS UNTIL MORE THAN TWO YEARS AFTER THEYWERE ORIGINALLY REQUESTED BY FINRA, AND AFTER ORIGINALLYREPRESENTING TO FINRA THAT IT DID NOT MAINTAIN THE RECORDS.Resolution Date:03/26/2015Resolution:Other Sanctions Ordered:UNDERTAKINGS; THE FIRM UNDERSTANDS THAT THIS SETTLEMENTINCLUDES A FINDING THAT IT FAILED TO SUPERVISE AN INDIVIDUAL WHOVIOLATED SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934AND THAT UNDER ARTICLE III, SECTION 4 OF FINRA'S BY-LAWS, THISMAKES THE FIRM SUBJECT TO A STATUTORY DISQUALIFICATION WITHRESPECT TO MEMBERSHIP.Sanction Details:THE FIRM IS CENSURED, FINED $2,500,000, ORDERED TO PAY $1,251,076.10IN RESTITUTION TO CUSTOMERS AND REQUIRED TO RETAIN ANINDEPENDENT CONSULTANT TO CONDUCT A COMPREHENSIVE REVIEWSanctions Ordered:CensureMonetary/Fine $2,500,000.00Disgorgement/RestitutionAcceptance, Waiver & Consent(AWC)73©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOF THE ADEQUACY OF THE FIRM'S SUPERVISORY POLICIES, SYSTEMSAND PROCEDURES (WRITTEN AND OTHERWISE) AND TRAINING RELATINGTO WIRE TRANSFERS, FORM U4/U5 REPORTING, AND EXCESSIVETRADINGDisclosure 21 of 92iReporting Source:RegulatorInitiated By:NASDAQ STOCK MARKETPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:01/30/2015Docket/Case Number:2012033488501Principal Product Type:Equity Listed (Common & Preferred Stock)Other Product Type(s):Allegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TODISPLAY IMMEDIATELY 31 CUSTOMER LIMIT ORDERS IN NASDAQSECURITIES IN ITS PUBLIC QUOTATION, WHEN EACH SUCH ORDER WAS ATA PRICE THAT WOULD HAVE IMPROVED THE FIRM'S BID OR OFFER INEACH SUCH SECURITY; OR WHEN THE ORDER WAS PRICED EQUAL TOTHE FIRM'S BID OR OFFER AND THE NATIONAL BEST BID OR OFFER FOREACH SUCH SECURITY, AND THE SIZE OF THE ORDER REPRESENTEDMORE THAN A DE MINIMIS CHANGE IN RELATION TO THE SIZE ASSOCIATEDWITH THE FIRM'S BID OR OFFER IN EACH SUCH SECURITY. THE CONDUCTVIOLATED SECURITIES EXCHANGE ACT OF 1934 RULE 604 OF REGULATIONNMS.Current Status:FinalResolution Date:01/30/2015Resolution:Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoAcceptance, Waiver & Consent(AWC)74©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:Sanction Details:THE FIRM WAS CENSURED AND FINED $7,500.Sanctions Ordered:CensureMonetary/Fine $7,500.00iReporting Source:FirmInitiated By:NASDAQ STOCK MARKETPrincipal Sanction(s)/ReliefSought:CensureOther Sanction(s)/ReliefSought:Date Initiated:01/30/2015Docket/Case Number:2012033488501Principal Product Type:Equity Listed (Common & Preferred Stock)Other Product Type(s):Allegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TODISPLAY IMMEDIATELY 31 CUSTOMER LIMIT ORDERS IN NASDAQSECURITIES IN ITS PUBLIC QUOTATION, WHEN EACH SUCH ORDER WAS ATA PRICE THAT WOULD HAVE IMPROVED THE FIRM'S BID OR OFFER INEACH SUCH SECURITY; OR WHEN THE ORDER WAS PRICED EQUAL TOTHE FIRM'S BID OR OFFER AND THE NATIONAL BEST BID OR OFFER FOREACH SUCH SECURITY, AND THE SIZE OF THE ORDER REPRESENTEDMORE THAN A DE MINIMIS CHANGE IN RELATION TO THE SIZE ASSOCIATEDWITH THE FIRM'S BID OR OFFER IN EACH SUCH SECURITY. THE CONDUCTVIOLATED SECURITIES EXCHANGE ACT OF 1934 RULE 604 OF REGULATIONNMS.Current Status:FinalResolution Date:01/30/2015Resolution:Other Sanctions Ordered:Sanction Details:THE FIRM WAS CENSURED AND FINED $7,500.Sanctions Ordered:CensureMonetary/Fine $7,500.00Acceptance, Waiver & Consent(AWC)75©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisclosure 22 of 92iReporting Source:RegulatorAllegations:SEC ADMIN RELEASES 33-9711 AND 34-74141, AND ACCOUNTING ANDAUDITING ENFORCEMENT RELEASE 3621 / JANUARY 27, 2015: THESECURITIES AND EXCHANGE COMMISSION DEEMS IT APPROPRIATE ANDIN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINSTOPPENHEIMER & CO. INC. IN ANTICIPATION OF THE INSTITUTION OFTHESE PROCEEDINGS, OPPENHEIMER HAS SUBMITTED AN OFFER OFSETTLEMENT WHICH THE COMMISSION HAS DETERMINED TO ACCEPT.OPPENHEIMER ADMITS THE COMMISSION'S JURISDICTION OVER IT ANDOVER THE SUBJECT MATTER OF THESE PROCEEDINGS, ADMITS THEFACTS, ACKNOWLEDGES THAT ITS CONDUCT VIOLATED THE FEDERALSECURITIES LAWS, AND CONSENTS TO THE ENTRY OF THIS ORDERINSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGSPURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933 ANDSECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934,MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER. ON THE BASIS OF THIS ORDER AND RESPONDENT'SOFFER, THE COMMISSION FINDS THAT: OPPENHEIMER ENGAGED IN TWOSEPARATE COURSES OF CONDUCT, EACH OF WHICH VIOLATED THEFEDERAL SECURITIES LAWS. OPPENHEIMER I: BETWEEN JULY 2008 ANDMAY 2009, OPPENHEIMER EXECUTED SALES OF BILLIONS OF SHARES OFPENNY STOCKS FOR AN ACCOUNT IN THE NAME OF ITS CUSTOMER, ABROKER-DEALER LICENSED IN THE BAHAMAS. ALTHOUGH THECUSTOMER PURPORTEDLY MAINTAINED A PROPRIETARY ACCOUNT,OPPENHEIMER KNEW THAT THE CUSTOMER WAS ACTUALLY EXECUTINGTRANSACTIONS AND PROVIDING BROKERAGE SERVICES FOR ITSCUSTOMERS, MANY OF WHOM WERE U.S. PERSONS. THROUGH THISCONDUCT, THE CUSTOMER ACTED AS A BROKER IN THE UNITED STATESEVEN THOUGH IT WAS NOT REGISTERED WITH THE COMMISSION ASREQUIRED BY THE FEDERAL SECURITIES LAWS. THE CUSTOMERPROVIDED OPPENHEIMER WITH AN IRS FORM W-8BEN, WHICHPURPORTEDLY EXEMPTED IT FROM U.S. TAX WITHHOLDING BASED ON AFALSE CERTIFICATION THAT IT WAS THE SOLE OWNER OF ALL OF THEINCOME GENERATED IN ITS OPPENHEIMER ACCOUNT. OPPENHEIMER,HOWEVER, KNEW THAT THE CUSTOMER'S CUSTOMERS (AND NOT IT)WERE THE BENEFICIAL OWNERS OF THE SECURITIES DEPOSITED, SOLDAND OR TRANSFERRED. AS A RESULT OPPENHEIMER KNEW OR SHOULDHAVE KNOWN THAT THE CUSTOMER'S IRS WITHHOLDING FORM WASFALSE AND COULD NOT BE RELIED ON. THUS, OPPENHEIMER FAILED TOCurrent Status:Final76©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:UNITED STATES SECURITIES AND EXCHANGE COMMISSIONPrincipal Sanction(s)/ReliefSought:Cease and DesistOther Sanction(s)/ReliefSought:Date Initiated:01/27/2015Docket/Case Number:3-16361Principal Product Type:Penny Stock(s)Other Product Type(s):UNREGISTERED DISTRIBUTION OF THE SECURITIESPROPERLY WITHHOLD AND REMIT TAXES TO THE IRS, AND THEREFOREBECAME LIABLE FOR TAXES IT WAS OBLIGATED TO WITHHOLD.OPPENHEIMER, HOWEVER, FAILED TO RECORD THIS LIABILITY ANDRESULTING EXPENSES, WHICH CAUSED ITS BOOKS AND RECORDS TOBECOME INACCURATE. OPPENHEIMER'S RECORDS WERE ALSOINACCURATE BECAUSE THEY REFLECTED THE ACCOUNT IN WHICH THECUSTOMER'S CUSTOMERS' SHARES WERE DEPOSITED, SOLD ANDTRANSFERRED AS A PROPRIETARY ACCOUNT OF THE CUSTOMER,RATHER THAN AN ACCOUNT FOR THE CUSTOMER'S CUSTOMERS. ININSTANCES WHEN SUSPICIOUS ACTIVITY OCCURRED IN THE CUSTOMER'SACCOUNT, OPPENHEIMER FAILED TO FILE THE REQUISITE SUSPICIOUSACTIVITY REPORTS. BY THESE CONDUCTS OPPENHEIMER WILLFULLYAIDED AND ABETTED AND WAS A CAUSE OF THE CUSTOMER'S VIOLATIONOF SECTION 15(A) OF THE EXCHANGE ACT; VIOLATED SECTION 17(A) OFTHE EXCHANGE ACT AND RULES 17A-3(A)(2), 17A-3(A)(9); AND WILLFULLYVIOLATED SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-8. (CONT.IN COMMENT SECTION)Resolution Date:01/27/2015Resolution:Other Sanctions Ordered:PREJUDGMENT INTEREST AND UNDERTAKINGSDoes the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?YesSanctions Ordered:CensureMonetary/Fine $5,078,129.00Disgorgement/RestitutionCease and Desist/InjunctionOrder77©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSanction Details:THE FIRM SHALL CEASE AND DESIST FROM COMMITTING OR CAUSINGANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 15(A) AND17(A) OF THE EXCHANGE ACT AND RULES 17A-3 AND 17A-8 THEREUNDERAND OF SECTION 5 OF THE SECURITIES ACT; IS CENSURED; SHALL PAY TOTHE COMMISSION $4,168,400 IN DISGORGEMENT; $753,471 INPREJUDGMENT INTEREST; AND $5,078,129 IN CIVIL PENALTIES. THE FIRMSHALL COMPLY WITH THE UNDERTAKINGS ENUMERATED IN THE OFFER.Regulator Statement(CONT. FROM ALLEGATIONS SECTION) OPPENHEIMER II: FROM OCTOBER6, 2009 THROUGH DECEMBER 10, 2010, OPPENHEIMER, THROUGH AREGISTERED REPRESENTATIVE THEN ASSOCIATED WITH OPPENHEIMERAND HIS IMMEDIATE SUPERVISOR, WILLFULLY VIOLATED SECTIONS 5(A)AND (C) OF THE SECURITIES ACT WHEN IT ENGAGED IN THEUNREGISTERED DISTRIBUTION OF THE SECURITIES ON BEHALF OF ACUSTOMER. THE OVER 2.5 BILLION CUMULATIVE SHARES SOLD THROUGHTHE CUSTOMER'S ACCOUNT GENERATED APPROXIMATELY $12,000,000 INPROCEEDS OF WHICH OPPENHEIMER WAS PAID $588,400 INCOMMISSIONS. NO REGISTRATION STATEMENT WAS ON FILE OR INEFFECT AS TO THE CUSTOMER'S OFFERS AND SALES OF SECURITIES ASREQUIRED BY SECTION 5 OF THE SECURITIES ACT. THE CUSTOMER'SOFFERS AND RE-SALES DID NOT COMPLY WITH RULE 144 OR QUALIFYFOR SECTION 4(A)(1) OR ANY OTHER EXEMPTION UNDER THE FEDERALSECURITIES LAWS. AS A CONSEQUENCE, OPPENHEIMER WILLFULLYVIOLATED SECTIONS 5(A) AND (C) OF THE SECURITIES ACT. IN FAILING TOESTABLISH AND IMPLEMENT POLICIES AND PROCEDURES REASONABLYDESIGNED TO PREVENT AND DETECT OPPENHEIMER PERSONNEL'SVIOLATIONS OF SECTION 5, OPPENHEIMER ALSO FAILED REASONABLY TOSUPERVISE. IN VIEW OF THE FOREGOING, THE COMMISSION DEEMS ITAPPROPRIATE TO IMPOSE THE SANCTIONS AGREED TO INOPPENHEIMER'S OFFER. ACCORDINGLY, IT IS HEREBY ORDERED THATOPPENHEIMER: CEASE AND DESIST FROM COMMITTING OR CAUSING ANYVIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 15(A) AND 17(A)OF THE EXCHANGE ACT AND RULES 17A-3 AND 17A-8 THEREUNDER ANDOF SECTION 5 OF THE SECURITIES ACT; IS CENSURED; SHALL PAY TO THECOMMISSION $10 MILLION COMPRISED OF $4,168,400 IN DISGORGEMENT;$753,471 IN PREJUDGMENT INTEREST; AND $5,078,129 IN CIVIL PENALTIES.THE FIRM SHALL COMPLY WITH THE UNDERTAKINGS ENUMERATED IN THEOFFER.A PENALTY AMOUNT THAT INCLUDES AN ADDITIONAL $10 MILLION ISAPPROPRIATE FOR THE CONDUCT AT ISSUE HEREIN, HOWEVER, IN LIGHTOF THE CIVIL MONEY PENALTY PAID BY OPPENHEIMER TO THE U.S.TREASURY DEPARTMENT'S FINANCIAL CRIMES ENFORCEMENT NETWORK(FINCEN) IN IN THE MATTER OF OPPENHEIMER & CO. INC., NUMBER 2015-01, NO ADDITIONAL PENALTY IS BEING ORDERED AT THIS TIME.OPPENHEIMER'S TOTAL OBLIGATION TO PAY IN THIS PROCEEDING WOULD78©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceBE $20 MILLION IN THE EVENT IT FAILS TO PAY ITS $10 MILLION OF A CIVILMONEY PENALTY TO FINCEN. PAYMENT OF DISGORGEMENT,PREJUDGMENT INTEREST, AND $78,129 IN CIVIL PENALTIES WILL BE DUETEN (10) DAYS AFTER INSTITUTION OF THIS ORDER, WITH THE REMAINING$5,000,000 IN CIVIL PENALTIES, AND INTEREST ACCRUED PURSUANT TO 31U.S.C. 3717, DUE NO LATER THAN THE SECOND ANNIVERSARY OF THEINSTITUTION OF THIS ORDER. THE COMMISSION ACKNOWLEDGES THATOPPENHEIMER HAS PLACED CERTAIN ASSETS IN ESCROW WHICHOPPENHEIMER BELIEVES WILL SATISFY THE PAYMENT REQUIRED TO BEMADE BY THE SECOND ANNIVERSARY OF THE INSTITUTION OF THISORDER; HOWEVER, OPPENHEIMER RETAINS ITS PAYMENT OBLIGATIONIRRESPECTIVE OF ANY AMOUNTS REALIZED BY PAYMENT FROM, SALE OF,OR REDEMPTION OF, ANY ESCROWED ASSETS.iReporting Source:FirmAllegations:SEC ADMIN RELEASES 33-9711 AND 34-74141, AND ACCOUNTING ANDAUDITING ENFORCEMENT RELEASE 3621 / JANUARY 27, 2015: THESECURITIES AND EXCHANGE COMMISSION DEEMS IT APPROPRIATE ANDIN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE, INSTITUTED AGAINSTOPPENHEIMER & CO. INC. IN ANTICIPATION OF THE INSTITUTION OFTHESE PROCEEDINGS, OPPENHEIMER HAS SUBMITTED AN OFFER OFSETTLEMENT WHICH THE COMMISSION HAS DETERMINED TO ACCEPT.OPPENHEIMER ADMITS THE COMMISSION'S JURISDICTION OVER IT ANDOVER THE SUBJECT MATTER OF THESE PROCEEDINGS, ADMITS THEFACTS, ACKNOWLEDGES THAT ITS CONDUCT VIOLATED THE FEDERALSECURITIES LAWS, AND CONSENTS TO THE ENTRY OF THIS ORDERINSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGSPURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933 ANDSECTIONS 15(B) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934,MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER. ON THE BASIS OF THIS ORDER AND RESPONDENT'SOFFER, THE COMMISSION FINDS THAT: OPPENHEIMER ENGAGED IN TWOSEPARATE COURSES OF CONDUCT, EACH OF WHICH VIOLATED THEFEDERAL SECURITIES LAWS. OPPENHEIMER I: BETWEEN JULY 2008 ANDMAY 2009, OPPENHEIMER EXECUTED SALES OF BILLIONS OF SHARES OFPENNY STOCKS FOR AN ACCOUNT IN THE NAME OF ITS CUSTOMER, ABROKER-DEALER LICENSED IN THE BAHAMAS. ALTHOUGH THECUSTOMER PURPORTEDLY MAINTAINED A PROPRIETARY ACCOUNT,OPPENHEIMER KNEW THAT THE CUSTOMER WAS ACTUALLY EXECUTINGTRANSACTIONS AND PROVIDING BROKERAGE SERVICES FOR ITSCUSTOMERS, MANY OF WHOM WERE U.S. PERSONS. THROUGH THISCurrent Status:Final79©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:SECURITIES AND EXCHANGE COMMISSIONPrincipal Sanction(s)/ReliefSought:Cease and DesistOther Sanction(s)/ReliefSought:Date Initiated:01/27/2015Docket/Case Number:3-16361Principal Product Type:Penny Stock(s)Other Product Type(s):UNREGISTERED DISTRIBUTION OF THE SECURITIESCONDUCT, THE CUSTOMER ACTED AS A BROKER IN THE UNITED STATESEVEN THOUGH IT WAS NOT REGISTERED WITH THE COMMISSION ASREQUIRED BY THE FEDERAL SECURITIES LAWS. THE CUSTOMERPROVIDED OPPENHEIMER WITH AN IRS FORM W-8BEN, WHICHPURPORTEDLY EXEMPTED IT FROM U.S. TAX WITHHOLDING BASED ON AFALSE CERTIFICATION THAT IT WAS THE SOLE OWNER OF ALL OF THEINCOME GENERATED IN ITS OPPENHEIMER ACCOUNT. OPPENHEIMER,HOWEVER, KNEW THAT THE CUSTOMER'S CUSTOMERS (AND NOT IT)WERE THE BENEFICIAL OWNERS OF THE SECURITIES DEPOSITED, SOLDAND OR TRANSFERRED. AS A RESULT OPPENHEIMER KNEW OR SHOULDHAVE KNOWN THAT THE CUSTOMER'S IRS WITHHOLDING FORM WASFALSE AND COULD NOT BE RELIED ON. THUS, OPPENHEIMER FAILED TOPROPERLY WITHHOLD AND REMIT TAXES TO THE IRS, AND THEREFOREBECAME LIABLE FOR TAXES IT WAS OBLIGATED TO WITHHOLD.OPPENHEIMER, HOWEVER, FAILED TO RECORD THIS LIABILITY ANDRESULTING EXPENSES, WHICH CAUSED ITS BOOKS AND RECORDS TOBECOME INACCURATE. OPPENHEIMER'S RECORDS WERE ALSOINACCURATE BECAUSE THEY REFLECTED THE ACCOUNT IN WHICH THECUSTOMER'S CUSTOMERS' SHARES WERE DEPOSITED, SOLD ANDTRANSFERRED AS A PROPRIETARY ACCOUNT OF THE CUSTOMER,RATHER THAN AN ACCOUNT FOR THE CUSTOMER'S CUSTOMERS. ININSTANCES WHEN SUSPICIOUS ACTIVITY OCCURRED IN THE CUSTOMER'SACCOUNT, OPPENHEIMER FAILED TO FILE THE REQUISITE SUSPICIOUSACTIVITY REPORTS. BY THESE CONDUCTS OPPENHEIMER WILLFULLYAIDED AND ABETTED AND WAS A CAUSE OF THE CUSTOMER'S VIOLATIONOF SECTION 15(A) OF THE EXCHANGE ACT; VIOLATED SECTION 17(A) OFTHE EXCHANGE ACT AND RULES 17A-3(A)(2), 17A-3(A)(9); AND WILLFULLYVIOLATED SECTION 17(A) OF THE EXCHANGE ACT AND RULE 17A-8. (CONT.IN COMMENT SECTION)8.Resolution:Order80©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceResolution Date:01/27/2015Other Sanctions Ordered:PREJUDGMENT INTEREST AND UNDERTAKINGSSanction Details:THE FIRM SHALL CEASE AND DESIST FROM COMMITTING OR CAUSINGANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 15(A) AND17(A) OF THE EXCHANGE ACT AND RULES 17A-3 AND 17A-8 THEREUNDERAND OF SECTION 5 OF THE SECURITIES ACT; IS CENSURED; SHALL PAY TOTHE COMMISSION $4,168,400 IN DISGORGEMENT; $753,471 INPREJUDGMENT INTEREST; AND $5,078,129 IN CIVIL PENALTIES. THE FIRMSHALL COMPLY WITH THE UNDERTAKINGS ENUMERATED IN THE OFFER.Firm Statement(CONT. FROM ALLEGATIONS SECTION) OPPENHEIMER II: FROM OCTOBER6, 2009 THROUGH DECEMBER 10, 2010, OPPENHEIMER, THROUGH AREGISTERED REPRESENTATIVE THEN ASSOCIATED WITH OPPENHEIMERAND HIS IMMEDIATE SUPERVISOR, WILLFULLY VIOLATED SECTIONS 5(A)AND (C) OF THE SECURITIES ACT WHEN IT ENGAGED IN THEUNREGISTERED DISTRIBUTION OF THE SECURITIES ON BEHALF OF ACUSTOMER. THE OVER 2.5 BILLION CUMULATIVE SHARES SOLD THROUGHTHE CUSTOMER'S ACCOUNT GENERATED APPROXIMATELY $12,000,000 INPROCEEDS OF WHICH OPPENHEIMER WAS PAID $588,400 INCOMMISSIONS. NO REGISTRATION STATEMENT WAS ON FILE OR INEFFECT AS TO THE CUSTOMER'S OFFERS AND SALES OF SECURITIES ASREQUIRED BY SECTION 5 OF THE SECURITIES ACT. THE CUSTOMER'SOFFERS AND RE-SALES DID NOT COMPLY WITH RULE 144 OR QUALIFYFOR SECTION 4(A)(1) OR ANY OTHER EXEMPTION UNDER THE FEDERALSECURITIES LAWS. AS A CONSEQUENCE, OPPENHEIMER WILLFULLYVIOLATED SECTIONS 5(A) AND (C) OF THE SECURITIES ACT. IN FAILING TOESTABLISH AND IMPLEMENT POLICIES AND PROCEDURES REASONABLYDESIGNED TO PREVENT AND DETECT OPPENHEIMER PERSONNEL'SVIOLATIONS OF SECTION 5, OPPENHEIMER ALSO FAILED REASONABLY TOSUPERVISE. IN VIEW OF THE FOREGOING, THE COMMISSION DEEMS ITAPPROPRIATE TO IMPOSE THE SANCTIONS AGREED TO INOPPENHEIMER'S OFFER. ACCORDINGLY, IT IS HEREBY ORDERED THATOPPENHEIMER: CEASE AND DESIST FROM COMMITTING OR CAUSING ANYVIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 15(A) AND 17(A)OF THE EXCHANGE ACT AND RULES 17A-3 AND 17A-8 THEREUNDER ANDOF SECTION 5 OF THE SECURITIES ACT; IS CENSURED; SHALL PAY TO THECOMMISSION $10 MILLION COMPRISED OF $4,168,400 IN DISGORGEMENT;$753,471 IN PREJUDGMENT INTEREST; AND $5,078,129 IN CIVIL PENALTIES.THE FIRM SHALL COMPLY WITH THE UNDERTAKINGS ENUMERATED IN THEOFFER. A PENALTY AMOUNT THAT INCLUDES AN ADDITIONAL $10 MILLIONSanctions Ordered:CensureMonetary/Fine $5,078,129.00Disgorgement/RestitutionCease and Desist/Injunction81©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceIS APPROPRIATE FOR THE CONDUCT AT ISSUE HEREIN, HOWEVER, INLIGHT OF THE CIVIL MONEY PENALTY PAID BY OPPENHEIMER TO THE U.S.TREASURY DEPARTMENT'S FINANCIAL CRIMES ENFORCEMENT NETWORK(FINCEN) IN IN THE MATTER OF OPPENHEIMER & CO. INC., NUMBER 2015-01, NO ADDITIONAL PENALTY IS BEING ORDERED AT THIS TIME.OPPENHEIMER'S TOTAL OBLIGATION TO PAY IN THIS PROCEEDING WOULDBE $20 MILLION IN THE EVENT IT FAILS TO PAY ITS $10 MILLION OF A CIVILMONEY PENALTY TO FINCEN. PAYMENT OF DISGORGEMENT,PREJUDGMENT INTEREST, AND $78,129 IN CIVIL PENALTIES WILL BE DUETEN (10) DAYS AFTER INSTITUTION OF THIS ORDER, WITH THE REMAINING$5,000,000 IN CIVIL PENALTIES, AND INTEREST ACCRUED PURSUANT TO 31U.S.C. 3717, DUE NO LATER THAN THE SECOND ANNIVERSARY OF THEINSTITUTION OF THIS ORDER. THE COMMISSION ACKNOWLEDGES THATOPPENHEIMER HAS PLACED CERTAIN ASSETS IN ESCROW WHICHOPPENHEIMER BELIEVES WILL SATISFY THE PAYMENT REQUIRED TO BEMADE BY THE SECOND ANNIVERSARY OF THE INSTITUTION OF THISORDER; HOWEVER, OPPENHEIMER RETAINS ITS PAYMENT OBLIGATIONIRRESPECTIVE OF ANY AMOUNTS REALIZED BY PAYMENT FROM, SALE OF,OR REDEMPTION OF, ANY ESCROWED ASSETS.Disclosure 23 of 92iReporting Source:RegulatorInitiated By:FINRADate Initiated:01/06/2015Docket/Case Number:2011025957001Allegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOESTABLISH AND MAINTAIN AN ADEQUATE SYSTEM TO MONITOR,SUPERVISE, AND CONTROL ITS EXTENSION OF MARGIN LOANS FORFOREIGN SOVEREIGN DEBT. THE FINDINGS STATED THAT THE FIRM'SWRITTEN SUPERVISORY PROCEDURES (WSPS) DID NOT ADDRESS HOWTO ASSESS THE RISKS OF EXTENDING MARGIN CREDIT FOR FOREIGNSOVEREIGN BONDS. THE FIRM FAILED TO DEDICATE SUFFICIENTSUPERVISORY RESOURCES TO MONITORING THE RISK OF HOLDINGBELOW-INVESTMENT-GRADE FOREIGN SOVEREIGN BONDS AND FAILEDTO TAKE SUFFICIENT STEPS TO ASSESS WHETHER A READY MARKETEXISTED FOR BELOW-INVESTMENT-GRADE FOREIGN SOVEREIGN BONDS.THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO REASONABLYSUPERVISE THE TRANSFER OF ASSETS SECURING A MARGIN LOAN FROMONE PARTY TO ANOTHER.Current Status:Final82©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:N/APrincipal Product Type:No ProductOther Product Type(s):Resolution Date:01/06/2015Resolution:Other Sanctions Ordered:Sanction Details:THE FIRM IS CENSURED AND FINED $250,000.FINE PAID IN FULL ON JANUARY 23, 2015.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $250,000.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmAllegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOESTABLISH AND MAINTAIN AN ADEQUATE SYSTEM TO MONITOR,SUPERVISE, AND CONTROL ITS EXTENSION OF MARGIN LOANS FORFOREIGN SOVEREIGN DEBT. THE FINDINGS STATED THAT THE FIRM'SWRITTEN SUPERVISORY PROCEDURES (WSPS) DID NOT ADDRESS HOWTO ASSESS THE RISKS OF EXTENDING MARGIN CREDIT FOR FOREIGNSOVEREIGN BONDS. THE FIRM FAILED TO DEDICATE SUFFICIENTSUPERVISORY RESOURCES TO MONITORING THE RISK OF HOLDINGBELOW-INVESTMENT-GRADE FOREIGN SOVEREIGN BONDS AND FAILEDTO TAKE SUFFICIENT STEPS TO ASSESS WHETHER A READY MARKETEXISTED FOR BELOW-INVESTMENT-GRADE FOREIGN SOVEREIGN BONDS.THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO REASONABLYSUPERVISE THE TRANSFER OF ASSETS SECURING A MARGIN LOAN FROMONE PARTY TO ANOTHER.Current Status:Final83©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:N/ADate Initiated:01/06/2015Docket/Case Number:2011025957001Principal Product Type:No ProductOther Product Type(s):Resolution Date:01/06/2015Resolution:Other Sanctions Ordered:Sanction Details:THE FIRM IS CENSURED AND FINED $250,000.Sanctions Ordered:CensureMonetary/Fine $250,000.00Acceptance, Waiver & Consent(AWC)Disclosure 24 of 92iReporting Source:RegulatorAllegations:SEC ADMIN RELEASE 34-73509, NOVEMBER 3, 2014: THE SECURITIES ANDEXCHANGE COMMISSION DEEMS IT APPROPRIATE AND IN THE PUBLICINTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESISTPROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TOSECTIONS 15(B), 15B(C)(2) AND 21C OF THE SECURITIES EXCHANGE ACTOF 1934 AGAINST OPPENHEIMER & CO., INC. ("OPPENHEIMER" OR "RESPONDENT"). IN ANTICIPATION OF THE INSTITUTION OF THESEPROCEEDINGS, RESPONDENT HAS SUBMITTED AN OFFER OFSETTLEMENT WHICH THE COMMISSION HAS DETERMINED TO ACCEPT.SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS AND ANY OTHERPROCEEDINGS BROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TOWHICH THE COMMISSION IS A PARTY, AND WITHOUT ADMITTING ORDENYING THE FINDINGS HEREIN, EXCEPT AS TO THE COMMISSION'SJURISDICTION OVER IT AND THE SUBJECT MATTER OF THESEPROCEEDINGS, WHICH ARE ADMITTED, RESPONDENT CONSENTS TO THEENTRY OF THIS ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTIONS 15(B), 15B(C)(2) AND 21CCurrent Status:Final84©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:UNITED STATES SECURITIES AND EXCHANGE COMMISSIONPrincipal Sanction(s)/ReliefSought:Cease and DesistOther Sanction(s)/ReliefSought:Date Initiated:11/03/2014Docket/Case Number:3-16243Principal Product Type:OtherOther Product Type(s):NON-INVESTMENT GRADE OR "JUNK" BONDSOF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, ANDIMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER. ONTHE BASIS OF THIS ORDER AND RESPONDENT'S OFFER, THECOMMISSION FINDS THAT: THESE PROCEEDINGS INVOLVE THE SALE OFNON-INVESTMENT GRADE OR "JUNK" BONDS ISSUED BY THECOMMONWEALTH OF PUERTO RICO ("PUERTO RICO") BY OPPENHEIMER, AREGISTERED BROKER-DEALER AND MUNICIPAL SECURITIES DEALER, TOCUSTOMERS IN AMOUNTS BELOW THE MINIMUM DENOMINATION OF THEISSUE. RULE G-15(F) PROMULGATED BY THE MUNICIPAL SECURITIESRULEMAKING BOARD ("MSRB") PROHIBITS DEALERS FROM EFFECTINGCUSTOMER TRANSACTIONS IN MUNICIPAL SECURITIES IN AMOUNTSBELOW THE MINIMUM DENOMINATIONS OF THE ISSUES. MINIMUMDENOMINATIONS ARE GENERALLY INTENDED TO LIMIT SALES OFMUNICIPAL SECURITIES TO RETAIL CUSTOMERS FOR WHOM SUCH BONDSMAY NOT BE SUITABLE, BUT THE PROSCRIPTIONS OF RULE G-15(F) APPLYTO ALL TRANSACTIONS WITH CUSTOMERS, REGARDLESS OF WHETHERTHE SECURITIES ARE SUITABLE FOR THE CUSTOMER. IN MARCH 2014,OPPENHEIMER VIOLATED MSRB RULE G-15(F) BY EXECUTING THREEUNSOLICITED SALES TRANSACTIONS IN THE PUERTO RICO BONDS WITHCUSTOMERS IN AMOUNTS BELOW THE $100,000 MINIMUM DENOMINATIONOF THE ISSUE ESTABLISHED BY THE ISSUER, PUERTO RICO, ANDSPECIFIED IN THE OFFICIAL STATEMENT. THE LIMITED EXCEPTIONSPROVIDED UNDER MSRB RULE G-15(F) FOR CUSTOMER TRANSACTIONS INMUNICIPAL SECURITIES BELOW THE MINIMUM DENOMINATION OF ANISSUE DID NOT APPLY TO THESE TRANSACTIONS. RESPONDENT DID NOTHAVE ANY POLICIES OR PROCEDURES CONCERNING MSRB RULE G-15(F).AS A RESULT OF THE CONDUCT, RESPONDENT WILLFULLY VIOLATEDMSRB RULE G-15(F). AS A RESULT OF RESPONDENT'S WILLFULVIOLATIONS OF MSRB RULE G-15(F), RESPONDENT WILLFULLY VIOLATEDSECTION 15B(C)(1) OF THE EXCHANGE ACT.Resolution:Order85©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceResolution Date:11/03/2014Other Sanctions Ordered:Sanction Details:ACCORDINGLY, IT IS HEREBY ORDERED THAT: RESPONDENT CEASE-AND-DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANYFUTURE VIOLATIONS OF SECTION 15B(C)(1) OF THE EXCHANGE ACT ANDMSRB RULE G-15(F) . RESPONDENT IS CENSURED. RESPONDENT SHALL,WITHIN SEVEN (7) DAYS OF THE ENTRY OF THIS ORDER, PAY A CIVILMONEY PENALTY IN THE AMOUNT OF $61,200. RESPONDENT WILLFULLYVIOLATED MSRB RULE G-15(F). AS A RESULT OF RESPONDENT'S WILLFULVIOLATIONS OF MSRB RULE G-15(F), RESPONDENT WILLFULLY VIOLATEDSECTION 15B(C)(1) OF THE EXCHANGE ACT.Regulator StatementIN DETERMINING TO ACCEPT THE OFFER, THE COMMISSION CONSIDEREDREMEDIAL ACTS PROMPTLY UNDERTAKEN BY RESPONDENT. AFTER ITWAS MADE AWARE THAT IT HAD EFFECTED CUSTOMER TRANSACTIONS INTHE 2014 BONDS BELOW THE MINIMUM DENOMINATION OF THE ISSUE,RESPONDENT CANCELLED THE TRANSACTIONS. RESPONDENT WILLUNDERTAKE TO REVIEW THE ADEQUACY OF ITS EXISTING POLICIES ANDPROCEDURES RELATING TO COMPLIANCE WITH MSRB RULE G-15(F).AFTER THAT REVIEW, RESPONDENT WILL MAKE SUCH CHANGES AS ARENECESSARY TO EFFECT COMPLIANCE WITH MSRB RULE G-15(F),INCLUDING ADOPTING NEW POLICIES AND PROCEDURES ORSUPPLEMENTING EXISTING POLICIES AND PROCEDURES. RESPONDENTWILL IMPLEMENT THESE POLICIES AND PROCEDURES, AND CONDUCTTRAINING AS TO THE POLICIES AND PROCEDURES AND COMPLIANCEWITH MSRB RULE G-15(F). RESPONDENT WILL INFORM COMMISSIONSTAFF NO LATER THAN SIX (6) MONTHS AFTER THE ENTRY OF THISORDER THAT IT HAS COMPLIED WITH THE ABOVE UNDERTAKINGS.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $61,200.00Cease and Desist/InjunctioniReporting Source:FirmAllegations:SEC ADMIN RELEASE 34-73509, NOVEMBER 3, 2014: THE SECURITIES ANDCurrent Status:Final86©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceEXCHANGE COMMISSION DEEMS IT APPROPRIATE AND IN THE PUBLICINTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESISTPROCEEDINGS BE, AND HEREBY ARE, INSTITUTED PURSUANT TOSECTIONS 15(B), 15B(C)(2) AND 21C OF THE SECURITIES EXCHANGE ACTOF 1934 AGAINST OPPENHEIMER & CO., INC. ("OPPENHEIMER" OR "RESPONDENT"). IN ANTICIPATION OF THE INSTITUTION OF THESEPROCEEDINGS, RESPONDENT HAS SUBMITTED AN OFFER OFSETTLEMENT WHICH THE COMMISSION HAS DETERMINED TO ACCEPT.SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS AND ANY OTHERPROCEEDINGS BROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TOWHICH THE COMMISSION IS A PARTY, AND WITHOUT ADMITTING ORDENYING THE FINDINGS HEREIN, EXCEPT AS TO THE COMMISSION'SJURISDICTION OVER IT AND THE SUBJECT MATTER OF THESEPROCEEDINGS, WHICH ARE ADMITTED, RESPONDENT CONSENTS TO THEENTRY OF THIS ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTIONS 15(B), 15B(C)(2) AND 21COF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, ANDIMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER. ONTHE BASIS OF THIS ORDER AND RESPONDENT'S OFFER, THECOMMISSION FINDS THAT: THESE PROCEEDINGS INVOLVE THE SALE OFNON-INVESTMENT GRADE OR "JUNK" BONDS ISSUED BY THECOMMONWEALTH OF PUERTO RICO ("PUERTO RICO") BY OPPENHEIMER, AREGISTERED BROKER-DEALER AND MUNICIPAL SECURITIES DEALER, TOCUSTOMERS IN AMOUNTS BELOW THE MINIMUM DENOMINATION OF THEISSUE. RULE G-15(F) PROMULGATED BY THE MUNICIPAL SECURITIESRULEMAKING BOARD ("MSRB") PROHIBITS DEALERS FROM EFFECTINGCUSTOMER TRANSACTIONS IN MUNICIPAL SECURITIES IN AMOUNTSBELOW THE MINIMUM DENOMINATIONS OF THE ISSUES. MINIMUMDENOMINATIONS ARE GENERALLY INTENDED TO LIMIT SALES OFMUNICIPAL SECURITIES TO RETAIL CUSTOMERS FOR WHOM SUCH BONDSMAY NOT BE SUITABLE, BUT THE PROSCRIPTIONS OF RULE G-15(F) APPLYTO ALL TRANSACTIONS WITH CUSTOMERS, REGARDLESS OF WHETHERTHE SECURITIES ARE SUITABLE FOR THE CUSTOMER. IN MARCH 2014,OPPENHEIMER VIOLATED MSRB RULE G-15(F) BY EXECUTING THREEUNSOLICITED SALES TRANSACTIONS IN THE PUERTO RICO BONDS WITHCUSTOMERS IN AMOUNTS BELOW THE $100,000 MINIMUM DENOMINATIONOF THE ISSUE ESTABLISHED BY THE ISSUER, PUERTO RICO, ANDSPECIFIED IN THE OFFICIAL STATEMENT. THE LIMITED EXCEPTIONSPROVIDED UNDER MSRB RULE G-15(F) FOR CUSTOMER TRANSACTIONS INMUNICIPAL SECURITIES BELOW THE MINIMUM DENOMINATION OF ANISSUE DID NOT APPLY TO THESE TRANSACTIONS. RESPONDENT DID NOTHAVE ANY POLICIES OR PROCEDURES CONCERNING MSRB RULE G-15(F).AS A RESULT OF THE CONDUCT, RESPONDENT WILLFULLY VIOLATEDMSRB RULE G-15(F). AS A RESULT OF RESPONDENT'S WILLFULVIOLATIONS OF MSRB RULE G-15(F), RESPONDENT WILLFULLY VIOLATED87©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:UNITED STATES SECURITIES AND EXCHANGE COMMISSIONPrincipal Sanction(s)/ReliefSought:Cease and DesistOther Sanction(s)/ReliefSought:Date Initiated:11/03/2014Docket/Case Number:3-16243Principal Product Type:OtherOther Product Type(s):NON-INVESTMENT GRADE OR "JUNK" BONDSSECTION 15B(C)(1) OF THE EXCHANGE ACT.Resolution Date:11/03/2014Resolution:Other Sanctions Ordered:Sanction Details:ACCORDINGLY, IT IS HEREBY ORDERED THAT: RESPONDENT CEASE-AND-DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANYFUTURE VIOLATIONS OF SECTION 15B(C)(1) OF THE EXCHANGE ACT ANDMSRB RULE G-15(F) . RESPONDENT IS CENSURED. RESPONDENT SHALL,WITHIN SEVEN (7) DAYS OF THE ENTRY OF THIS ORDER, PAY A CIVILMONEY PENALTY IN THE AMOUNT OF $61,200. RESPONDENT WILLFULLYVIOLATED MSRB RULE G-15(F). AS A RESULT OF RESPONDENT'S WILLFULVIOLATIONS OF MSRB RULE G-15(F), RESPONDENT WILLFULLY VIOLATEDSECTION 15B(C)(1) OF THE EXCHANGE ACT.Firm StatementIN DETERMINING TO ACCEPT THE OFFER, THE COMMISSION CONSIDEREDREMEDIAL ACTS PROMPTLY UNDERTAKEN BY RESPONDENT. AFTER ITWAS MADE AWARE THAT IT HAD EFFECTED CUSTOMER TRANSACTIONS INTHE 2014 BONDS BELOW THE MINIMUM DENOMINATION OF THE ISSUE,RESPONDENT CANCELLED THE TRANSACTIONS. RESPONDENT WILLUNDERTAKE TO REVIEW THE ADEQUACY OF ITS EXISTING POLICIES ANDPROCEDURES RELATING TO COMPLIANCE WITH MSRB RULE G-15(F).AFTER THAT REVIEW, RESPONDENT WILL MAKE SUCH CHANGES AS ARENECESSARY TO EFFECT COMPLIANCE WITH MSRB RULE G-15(F),INCLUDING ADOPTING NEW POLICIES AND PROCEDURES ORSUPPLEMENTING EXISTING POLICIES AND PROCEDURES. RESPONDENTWILL IMPLEMENT THESE POLICIES AND PROCEDURES, AND CONDUCTTRAINING AS TO THE POLICIES AND PROCEDURES AND COMPLIANCESanctions Ordered:CensureMonetary/Fine $61,200.00Cease and Desist/InjunctionOrder88©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceWITH MSRB RULE G-15(F). RESPONDENT WILL INFORM COMMISSIONSTAFF NO LATER THAN SIX (6) MONTHS AFTER THE ENTRY OF THISORDER THAT IT HAS COMPLIED WITH THE ABOVE UNDERTAKINGS.Disclosure 25 of 92iReporting Source:RegulatorInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:10/29/2014Docket/Case Number:2013037792401Principal Product Type:OtherOther Product Type(s):SECURITIZED PRODUCTSAllegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREPORT THE CORRECT TIME OF TRADE EXECUTIONS FORTRANSACTIONS IN TRADE REPORTING AND COMPLIANCE ENGINE(TRACE)-ELIGIBLE SECURITIZED PRODUCTS AND FAILED TO SHOW THECORRECT TIME OF EXECUTION ON THE MEMORANDA OF BROKERAGEORDERS.Current Status:FinalResolution Date:10/29/2014Resolution:Other Sanctions Ordered:Sanction Details:THE FIRM WAS CENSURED AND FINED $10,000.FINE PAID IN FULL ON NOVEMBER 12, 2014.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $10,000.00Acceptance, Waiver & Consent(AWC)89©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceiReporting Source:FirmInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:10/29/2014Docket/Case Number:2013037792401Principal Product Type:OtherOther Product Type(s):SECURITIZED PRODUCTSAllegations:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT IT FAILED TOREPORT THE CORRECT TIME OF TRADE EXECUTIONS FORTRANSACTIONS IN TRADE REPORTING AND COMPLIANCE ENGINE(TRACE)-ELIGIBLE SECURITIZED PRODUCTS AND FAILED TO SHOW THECORRECT TIME OF EXECUTION ON THE MEMORANDA OF BROKERAGEORDERS.Current Status:FinalResolution Date:10/29/2014Resolution:Other Sanctions Ordered:Sanction Details:THE FIRM WAS CENSURED AND FINED $10,000Sanctions Ordered:CensureMonetary/Fine $10,000.00Acceptance, Waiver & Consent(AWC)Disclosure 26 of 92iReporting Source:RegulatorAllegations:SEC RULES 10B-10, 17A-3, 605 FINRA RULES 2010, 6182, 6380A, 7450, NASDRULES 3010, 3110: THE FIRM SUBMITTED TO THE FINRA/NASDAQ TRADEREPORTING FACILITY (TRF) TRANSACTIONS WITH INACCURATE MARKETCENTER CODES. THE FIRM SUBMITTED TRANSACTIONS FOR WHICH ITFAILED TO SUBSTANTIATE USAGE OF THE QUALIFIED CONTINGENT TRADECurrent Status:Final90©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:02/19/2014Docket/Case Number:2011026125001Principal Product Type:No ProductOther Product Type(s):MODIFIER. THE FIRM REPORTED INACCURATE INFORMATION ONCUSTOMER CONFIRMATIONS CONSISTING OF THE FOLLOWING:DISCLOSED AN INACCURATE CAPACITY; DISCLOSED AN INACCURATEEXECUTION PRICE; FAILED TO DISCLOSE THAT THESE WERE AVERAGEPRICE TRANSACTIONS; INACCURATELY DISCLOSED THE COMPENSATIONTYPE AS "COMMISSION EQUIVALENT" FOR AGENCY TRADES; FAILED TODISCLOSE THE FIRM WAS A MARKET MAKER IN A SECURITY;INACCURATELY DISCLOSED THE COMPENSATION TYPE AS "COMMISSION"FOR PRINCIPAL TRADES; AND DISCLOSED AN INACCURATE EXECUTIONPRICE. THE FIRM TRANSMITTED TO THE ORDER AUDIT TRAIL SYSTEM(OATS) REPORTS THAT CONTAINED INACCURATE, INCORRECT,INCOMPLETE OR IMPROPERLY FORMATTED DATA. SPECIFICALLY, THEFIRM SUBMITTED ORDERS WITH AN INACCURATE CUSTOMERDESIGNATION, AND FAILED TO SUBMIT INFORMATION FOR ROUTESASSOCIATED WITH AN ORDER. THE FIRM MARKED ITS INTERNAL LEDGERWITH AN INACCURATE SHORT DESIGNATION FOR A LONG POSITION ANDINCORRECTLY REPORTED A LONG SALE TO THE FINRA/NASDAQ TRF WITHA SHORT SALE MODIFIER. THE FIRM FAILED TO PROPERLY CLASSIFYCUSTOMER ORDERS FOR PURPOSES OF SEC RULE 605 ORDEREXECUTION DISCLOSURE AND FOR A MONTH MADE AVAILABLE A REPORTON THE COVERED ORDERS IN NATIONAL MARKET SYSTEM SECURITIESTHAT IT RECEIVED, WHICH FAILED TO CONTAIN ACCURATE STATISTICSFOR MARKETABLE LIMIT ORDERS IT RECEIVED BETWEEN 500 AND 1,999SHARES IN ONE SECURITY. THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RESPECT TO CERTAIN APPLICABLE FEDERALSECURITIES LAWS AND REGULATIONS, AND/OR THE RULES OFNASD/FINRA AND FAILED TO PROVIDE FOR MINIMAL REQUIREMENTS FORADEQUATE WRITTEN SUPERVISORY PROCEDURES REGARDING TRADEREPORTING (TIMELY AND ACCURATE REPORTING TO THE TRF) AND OATS(ACCURACY OF OATS DATA).Resolution:Acceptance, Waiver & Consent(AWC)91©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceResolution Date:02/19/2014Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS CENSURED AND FINED $45,000. FINE PAID IN FULL ON03/20/14.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $45,000.00iReporting Source:FirmAllegations:SEC RULES 10B-10, 17A-3, 605 FINRA RULES 2010, 6182, 6380A, 7450, NASDRULES 3010, 3110: THE FIRM SUBMITTED TO THE FINRA/NASDAQ TRADEREPORTING FACILITY (TRF) TRANSACTIONS WITH INACCURATE MARKETCENTER CODES. THE FIRM SUBMITTED TRANSACTIONS FOR WHICH ITFAILED TO SUBSTANTIATE USAGE OF THE QUALIFIED CONTINGENT TRADEMODIFIER. THE FIRM REPORTED INACCURATE INFORMATION ONCUSTOMER CONFIRMATIONS CONSISTING OF THE FOLLOWING:DISCLOSED AN INACCURATE CAPACITY; DISCLOSED AN INACCURATEEXECUTION PRICE; FAILED TO DISCLOSE THAT THESE WERE AVERAGEPRICE TRANSACTIONS; INACCURATELY DISCLOSED THE COMPENSATIONTYPE AS "COMMISSION EQUIVALENT" FOR AGENCY TRADES; FAILED TODISCLOSE THE FIRM WAS A MARKET MAKER IN A SECURITY;INACCURATELY DISCLOSED THE COMPENSATION TYPE AS "COMMISSION"FOR PRINCIPAL TRADES; AND DISCLOSED AN INACCURATE EXECUTIONPRICE. THE FIRM TRANSMITTED TO THE ORDER AUDIT TRAIL SYSTEM(OATS) REPORTS THAT CONTAINED INACCURATE, INCORRECT,INCOMPLETE OR IMPROPERLY FORMATTED DATA. SPECIFICALLY, THEFIRM SUBMITTED ORDERS WITH AN INACCURATE CUSTOMERDESIGNATION, AND FAILED TO SUBMIT INFORMATION FOR ROUTESASSOCIATED WITH AN ORDER. THE FIRM MARKED ITS INTERNAL LEDGERWITH AN INACCURATE SHORT DESIGNATION FOR A LONG POSITION ANDINCORRECTLY REPORTED A LONG SALE TO THE FINRA/NASDAQ TRF WITHA SHORT SALE MODIFIER. THE FIRM FAILED TO PROPERLY CLASSIFYCurrent Status:Final92©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:02/19/2014Docket/Case Number:2011026125001Principal Product Type:No ProductOther Product Type(s):CUSTOMER ORDERS FOR PURPOSES OF SEC RULE 605 ORDEREXECUTION DISCLOSURE AND FOR A MONTH MADE AVAILABLE A REPORTON THE COVERED ORDERS IN NATIONAL MARKET SYSTEM SECURITIESTHAT IT RECEIVED, WHICH FAILED TO CONTAIN ACCURATE STATISTICSFOR MARKETABLE LIMIT ORDERS IT RECEIVED BETWEEN 500 AND 1,999SHARES IN ONE SECURITY. THE FIRM'S SUPERVISORY SYSTEM DID NOTPROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RESPECT TO CERTAIN APPLICABLE FEDERALSECURITIES LAWS AND REGULATIONS, AND/OR THE RULES OFNASD/FINRA AND FAILED TO PROVIDE FOR MINIMAL REQUIREMENTS FORADEQUATE WRITTEN SUPERVISORY PROCEDURES REGARDING TRADEREPORTING (TIMELY AND ACCURATE REPORTING TO THE TRF) AND OATS(ACCURACY OF OATS DATA).Resolution Date:02/19/2014Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS CENSURED AND FINED $45,000.Sanctions Ordered:CensureMonetary/Fine $45,000.00Acceptance, Waiver & Consent(AWC)Disclosure 27 of 92iReporting Source:RegulatorAllegations:MSRB RULES G-17, G-27, G-30(A) - OPPENHEIMER & CO., INC. CHARGED ANUNFAIR AND UNREASONABLE PRICE IN MUNICIPALCurrent Status:Final93©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSECURITIES TRANSACTIONS WITH ITS CUSTOMERS AND LACKED ANADEQUATE SUPERVISORY SYSTEM. ONE TRADER PURCHASED MUNICIPALSECURITIES FROM A BROKER-DEALER ON BEHALF OF THE FIRM, HELDTHE BONDS IN INVENTORY FOR AT LEAST OVERNIGHT, AND THEN MADETHE BONDS AVAILABLE FOR RESALE AT AN EXCESSIVE MARKUP TO FIRMCUSTOMERS. THE TRADER WAS RESPONSIBLE FOR DETERMINING THEPRICES PAID BY CUSTOMERS AND THE MARKUPS RANGED FROM 5.01%TO 15.57%. IN SOME OF THE TRANSACTIONS, THE MARKUPS EXCEEDED9.4%. THE MARKUPS WERE NEVER DISCLOSED TO FIRM CUSTOMERS. THEFIRM FAILED TO DETECT THE EXCESSIVE MARKUPS CHARGED BECAUSEITS SUPERVISORY SYSTEM WAS DEFICIENT. THE FIRM GENERATEDEXCEPTION REPORTS THAT IDENTIFIED MARKUPS IN CONNECTION WITHMUNICIPAL SECURITIES TRANSACTIONS ABOVE 3% (THE "3% MARKUPSREPORT"). THE 3% MARKUPS REPORT ONLY CAPTURED PAIRED INTRA-DAY TRADES,WHICH ARE THOSE INSTANCES WHEN THE FIRM BUYS A BOND IN THEINTER-DEALER MARKET AND SELLS THE BOND TO A FIRM CUSTOMERTHAT SAME DAY. TRADES THAT OCCURRED INTER-DAY, WHEN THEFIRM BUYS A BOND AND SELLS THE BOND TO A CUSTOMER THE NEXT DAYOR THEREAFTER, WERE NOT IDENTIFIED BY THE 3% MARKUPS REPORTOR ANY OTHER SURVEILLANCE REPORT AND THEREFORE NOTREVIEWED BY THE FIRM'S COMPLIANCE DEPARTMENT. BY HOLDING THEBONDS OVERNIGHT BEFORE MAKING THEM AVAILABLE FOR RESALE, THEFIRM'S SUPERVISORY SYSTEM, WHICH ONLY REVIEWEDINTRA-DAY TRANSACTIONS FOR THE FAIRNESS OFMARKUPS/MARKDOWNS IN MUNICIPAL SECURITIES TRANSACTIONS, DIDNOT CAPTURE THESE TRANSACTIONS. THE FIRM SOLD MUNICIPALSECURITIES FOR ITS OWN ACCOUNT TO A CUSTOMER AT AN AGGREGATEPRICE (INCLUDING ANY MARKUP OR MARKDOWN) THAT WAS NOT FAIRAND REASONABLE, TAKING INTO CONSIDERATION ALL RELEVANTFACTORS, INCLUDING THE BEST JUDGMENT OF THE BROKER, DEALER ORMUNICIPAL SECURITIES DEALER AS TO THE FAIR MARKET VALUE OF THESECURITIES AT THE TIME OF THE TRANSACTION AND OF ANYSECURITIES EXCHANGED OR TRADED IN CONNECTION WITH THETRANSACTION, THE EXPENSE INVOLVED IN EFFECTING THETRANSACTION, THE FACT THAT THE BROKER, DEALER, OR MUNICIPALSECURITIES DEALER IS ENTITLED TO A PROFIT, AND THE TOTAL DOLLARAMOUNT OF THE TRANSACTION. THE MUNICIPAL SECURITIESTRANSACTIONS WERE PRICED FROM 5.01% TO 15.57% ABOVE THEFIRM'S CONTEMPORANEOUS COST. THE TRADER WAS ABLE TO CHARGETHESE EXCESSIVE MARKUPS BECAUSE OF A SIGNIFICANTDEFICIENCY IN THE FIRM'S SUPERVISORY SYSTEM. THE FIRM'SSUPERVISORY PERSONNEL RELIED EXCLUSIVELY ON THE 3% MARKUPSREPORT WHICH ONLY CAPTURED INTRA-DAY TRANSACTIONS TO REVIEWTHE FAIRNESS OF MARKUPS/MARKDOWNS IN MUNICIPAL SECURITIES94©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:12/06/2013Docket/Case Number:2009018102501Principal Product Type:Debt - MunicipalOther Product Type(s):TRANSACTIONS. FOR ABOUT FOUR YEARS, IF A FIRM TRADERPURCHASED SECURITIES AND HELD THOSE SECURITIES IN INVENTORYFOR A DAY OR LONGER, THE SUBSEQUENT SALES TO CUSTOMERSWOULD NOT POPULATE THE 3% MARKUPS REPORT OR BE SUBJECTED TOA FAIR PRICING REVIEW.Resolution Date:12/06/2013Resolution:Other Sanctions Ordered:UNDERTAKING: THE FIRM SHALL PROVIDE THREE REPORTS, WRITTENAND ORAL, TO FINRA ON DATES THAT ARE NO MORE THAN SIX MONTHS,12 MONTHS, AND 18 MONTHS AFTER THE DATE OF THENOTICE OF ACCEPTANCE OF THIS AWC, REGARDING THE EFFECTIVENESSOF THE FIRM'S WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TOTHE PRICING OF MUNICIPAL SECURITIESTRANSACTIONS WITH CUSTOMERS. THE WRITTEN REPORTS SHALL BECERTIFIED BY A FIRM OFFICER AND SHALL ADDRESS, AT A MINIMUM, THEEFFICACY OF THE FIRM'S WRITTENSUPERVISORY PROCEDURES, THE STEPS TAKEN BY SUPERVISORYPERSONNEL TO REVIEW FOR COMPLIANCE WITH THE FIRM'S FAIRPRICING OBLIGATIONS PURSUANT TO MSRB RULES G-17 AND G-30 INCONNECTION WITH MUNICIPAL SECURITIES TRANSACTIONS WITH ACUSTOMER,AND THE RESULTS OF SUCH SUPERVISORY REVIEWS.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $675,000.00Disgorgement/RestitutionAcceptance, Waiver & Consent(AWC)95©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $675,000 FOR MSRB RULEVIOLATIONS, AND ORDERED TO PAY $246,974, PLUS INTEREST, INRESTITUTION. A REGISTERED FIRM PRINCIPAL SHALL SUBMITSATISFACTORY PROOF OF PAYMENT OF RESTITUTION, OR OFREASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECTRESTITUTION TO FINRA NO LATER THAN 120 DAYS AFTER ACCEPTANCEOF THIS AWC. ANY UNDISTRIBUTED RESTITUTION AND INTEREST SHALLBE FORWARDED TO THE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTYOR ABANDONED PROPERTY FUND FOR THE STATE IN WHICH THECUSTOMER LAST RESIDED. FINE PAID IN FULL ON JANUARY 2, 2014.iReporting Source:FirmAllegations:MSRB RULES G-17, G-27, G-30(A) - OPPENHEIMER & CO., INC. CHARGED ANUNFAIR AND UNREASONABLE PRICE IN MUNICIPAL SECURITIESTRANSACTIONS WITH ITS CUSTOMERS AND LACKED AN ADEQUATESUPERVISORY SYSTEM. ONE TRADER PURCHASED MUNICIPALSECURITIES FROM A BROKER-DEALER ON BEHALF OF THE FIRM, HELDTHE BONDS IN INVENTORY FOR AT LEAST OVERNIGHT, AND THEN MADETHE BONDS AVAILABLE FOR RESALE AT AN EXCESSIVE MARKUP TO FIRMCUSTOMERS. THE TRADER WAS RESPONSIBLE FOR DETERMINING THEPRICES PAID BY CUSTOMERS AND THE MARKUPS RANGED FROM 5.01%TO 15.57%. IN SOME OF THE TRANSACTIONS, THE MARKUPS EXCEEDED9.4%. THE MARKUPS WERE NEVER DISCLOSED TO FIRM CUSTOMERS. THEFIRM FAILED TO DETECT THE EXCESSIVE MARKUPS CHARGED BECAUSEITS SUPERVISORY SYSTEM WAS DEFICIENT. THE FIRM GENERATEDEXCEPTION REPORTS THAT IDENTIFIED MARKUPS IN CONNECTION WITHMUNICIPAL SECURITIES TRANSACTIONS ABOVE 3% (THE "3% MARKUPSREPORT"). THE 3% MARKUPS REPORT ONLY CAPTURED PAIRED INTRA-DAY TRADES, WHICH ARE THOSE INSTANCES WHEN THE FIRM BUYS ABOND IN THE INTER-DEALER MARKET AND SELLS THE BOND TO A FIRMCUSTOMER THAT SAME DAY. TRADES THAT OCCURRED INTER-DAY, WHENTHE FIRM BUYS A BOND AND SELLS THE BOND TO A CUSTOMER THE NEXTDAY OR THEREAFTER, WERE NOT IDENTIFIED BY THE 3% MARKUPSREPORT OR ANY OTHER SURVEILLANCE REPORT AND THEREFORE NOTREVIEWED BY THE FIRM'S COMPLIANCE DEPARTMENT. BY HOLDING THEBONDS OVERNIGHT BEFORE MAKING THEM AVAILABLE FOR RESALE, THEFIRM'S SUPERVISORY SYSTEM, WHICH ONLY REVIEWED INTRA-DAYTRANSACTIONS FOR THE FAIRNESS OF MARKUPS/MARKDOWNS INMUNICIPAL SECURITIES TRANSACTIONS, DID NOT CAPTURE THESETRANSACTIONS. THE FIRM SOLD MUNICIPAL SECURITIES FOR ITS OWNCurrent Status:Final96©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:12/06/2013Docket/Case Number:2009018102501Principal Product Type:Debt - MunicipalOther Product Type(s):ACCOUNT TO A CUSTOMER AT AN AGGREGATE PRICE (INCLUDING ANYMARKUP OR MARKDOWN) THAT WAS NOT FAIR AND REASONABLE, TAKINGINTO CONSIDERATION ALL RELEVANT FACTORS, INCLUDING THE BESTJUDGMENT OF THE BROKER, DEALER OR MUNICIPAL SECURITIES DEALERAS TO THE FAIR MARKET VALUE OF THE SECURITIES AT THE TIME OF THETRANSACTION AND OF ANY SECURITIES EXCHANGED OR TRADED INCONNECTION WITH THE TRANSACTION, THE EXPENSE INVOLVED INEFFECTING THE TRANSACTION, THE FACT THAT THE BROKER, DEALER,OR MUNICIPAL SECURITIES DEALER IS ENTITLED TO A PROFIT, AND THETOTAL DOLLAR AMOUNT OF THE TRANSACTION. THE MUNICIPALSECURITIES TRANSACTIONS WERE PRICED FROM 5.01% TO 15.57%ABOVE THE FIRM'S CONTEMPORANEOUS COST. THE TRADER WAS ABLETO CHARGE THESE EXCESSIVE MARKUPS BECAUSE OF A SIGNIFICANTDEFICIENCY IN THE FIRM'S SUPERVISORY SYSTEM. THE FIRM'SSUPERVISORY PERSONNEL RELIED EXCLUSIVELY ON THE 3% MARKUPSREPORT WHICH ONLY CAPTURED INTRA-DAY TRANSACTIONS TO REVIEWTHE FAIRNESS OF MARKUPS/MARKDOWNS IN MUNICIPAL SECURITIESTRANSACTIONS. FOR ABOUT FOUR YEARS, IF A FIRM TRADERPURCHASED SECURITIES AND HELD THOSE SECURITIES IN INVENTORYFOR A DAY OR LONGER, THE SUBSEQUENT SALES TO CUSTOMERSWOULD NOT POPULATE THE 3% MARKUPS REPORT OR BE SUBJECTED TOA FAIR PRICING REVIEW.Resolution Date:12/06/2013Resolution:Other Sanctions Ordered:UNDERTAKING: THE FIRM SHALL PROVIDE THREE REPORTS, WRITTENAND ORAL, TO FINRA ON DATES THAT ARE NO MORE THAN SIX MONTHS,12 MONTHS, AND 18 MONTHS AFTER THE DATE OF THE NOTICE OFSanctions Ordered:CensureMonetary/Fine $675,000.00Disgorgement/RestitutionAcceptance, Waiver & Consent(AWC)97©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceACCEPTANCE OF THIS AWC, REGARDING THE EFFECTIVENESS OF THEFIRM'S WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TO THEPRICING OF MUNICIPAL SECURITIES TRANSACTIONS WITH CUSTOMERS.THE WRITTEN REPORTS SHALL BE CERTIFIED BY A FIRM OFFICER ANDSHALL ADDRESS, AT A MINIMUM, THE EFFICACY OF THE FIRM'S WRITTENSUPERVISORY PROCEDURES, THE STEPS TAKEN BY SUPERVISORYPERSONNEL TO REVIEW FOR COMPLIANCE WITH THE FIRM'S FAIRPRICING OBLIGATIONS PURSUANT TO MSRB RULES G-17 AND G-30 INCONNECTION WITH MUNICIPAL SECURITIES TRANSACTIONS WITH ACUSTOMER,AND THE RESULTS OF SUCH SUPERVISORY REVIEWS.Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $675,000 FOR MSRB RULEVIOLATIONS, AND ORDERED TO PAY $246,974, PLUS INTEREST, INRESTITUTION. A REGISTERED FIRM PRINCIPAL SHALL SUBMITSATISFACTORY PROOF OF PAYMENT OF RESTITUTION, OR OFREASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECTRESTITUTION TO FINRA NO LATER THAN 120 DAYS AFTER ACCEPTANCEOF THIS AWC. ANY UNDISTRIBUTED RESTITUTION AND INTEREST SHALLBE FORWARDED TO THE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTYOR ABANDONED PROPERTY FUND FOR THE STATE IN WHICH THECUSTOMER LAST RESIDED.Disclosure 28 of 92iReporting Source:RegulatorInitiated By:FINRADate Initiated:07/15/2013Docket/Case Number:2009018261301Principal Product Type:Equity Listed (Common & Preferred Stock)Other Product Type(s):Allegations:SEC RULES 200(G) AND 204T(A)(1) OF REGULATION SHO - OPPENHEIMER &CO. INC. EXECUTED ORDERS FOR SALES PURSUANT TO SEC RULE 144AND FAILED TO MARK EACH AS A SHORT SALE. THE FIRM HAD A FEW FAIL-TO-DELIVER POSITIONS AT A REGISTERED CLEARING AGENCY IN ANEQUITY SECURITY THAT RESULTED FROM LONG SALE TRANSACTIONS,AND FAILED TO TIMELY CLOSE OUT THE FAIL-TO-DELIVER POSITIONS BYPURCHASING SECURITIES OF LIKE KIND.Current Status:Final98©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Resolution Date:07/15/2013Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $17,500. FINE PAID ONAUGUST 15, 2013.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $17,500.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Date Initiated:07/15/2013Docket/Case Number:2009018261301Principal Product Type:Equity Listed (Common & Preferred Stock)Other Product Type(s):Allegations:SEC RULES 200(G) AND 204T(A)(1) OF REGULATION SHO - OPPENHEIMER &CO. INC. EXECUTED ORDERS FOR SALES PURSUANT TO SEC RULE 144AND FAILED TO MARK EACH AS A SHORT SALE. THE FIRM HAD A FEW FAIL-TO-DELIVER POSITIONS AT A REGISTERED CLEARING AGENCY IN ANEQUITY SECURITY THAT RESULTED FROM LONG SALE TRANSACTIONS,AND FAILED TO TIMELY CLOSE OUT THE FAIL-TO-DELIVER POSITIONS BYPURCHASING SECURITIES OF LIKE KIND.Current Status:Final99©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanction(s)/ReliefSought:Resolution Date:07/15/2013Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $17,500.Sanctions Ordered:CensureMonetary/Fine $17,500.00Acceptance, Waiver & Consent(AWC)Disclosure 29 of 92iReporting Source:RegulatorInitiated By:CHICAGO BOARD OPTIONS EXCHANGEPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Date Initiated:12/21/2012Docket/Case Number:12-0121Principal Product Type:OptionsOther Product Type(s):Allegations:OPPENHEIMER & CO., INC. ("OPPENHEIMER"), AN EXCHANGE TPHORGANIZATION, WAS CENSURED AND FINED $5,000 FOR THE FOLLOWINGCONDUCT: OPPENHEIMER FAILED TO REGISTER THE MINIMUM NUMBEROF INDIVIDUALS REQUIRED TO REGISTER AS A PROPRIETARY TRADERPRINCIPAL ("TP") IN WEBCRD BY NOVEMBER 5, 2011. ADDITIONALLY, IT ISNOTED THAT OPPENHEIMER UPDATED ITS WRITTEN SUPERVISORYPROCEDURES RELATED TO REGISTRATION AND QUALIFICATION OFASSOCIATED PERSONS ON FEBRUARY 15, 2013. (EXCHANGE RULE 3.6A -QUALIFICATION AND REGISTRATION OF TRADING PERMIT HOLDERS ANDASSOCIATED PERSONS)Current Status:FinalResolution:Decision & Order of Offer of Settlement100©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceResolution Date:03/18/2013Other Sanctions Ordered:Sanction Details:A $5,000 FINE AND A CENSURE.Sanctions Ordered:CensureMonetary/Fine $5,000.00iReporting Source:FirmInitiated By:CBOEPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:CENSUREDate Initiated:03/18/2013Docket/Case Number:FILE NO. 12 -0121Principal Product Type:No ProductOther Product Type(s):Allegations:OPPENHEIMER & CO. INC. FAILED TO REGISTER THE MINIMUM NUMBEROF INDIVIDUALS REQUIRED TO REGISTER AS A PROPRIETARY TRADERPRINCIPAL (TP)ON WEB CRD BY NOVEMBER 5, 2011, IN ACCORDANCEWITH CBOE EXCHANGE RULE 3.6A.Current Status:FinalResolution Date:03/18/2013Resolution:Other Sanctions Ordered:Sanction Details:OPPENHEIMER & CO. INC. SETTLED THIS MATTER AND SUBMITTED THEREGISTRATIONS OF ITS PROPRIETARY TRADING PRINCIPALS ON WEBCRD.Sanctions Ordered:CensureMonetary/Fine $5,000.00Decision & Order of Offer of SettlementDisclosure 30 of 92iReporting Source:Regulator101©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAAllegations:SECTION 5 OF THE SECURITIES ACT OF 1933, FINRA RULES 2010, 3310(A),3310(B), NASD RULES 2110, 3010, 3011(A), 3011(B): THE FIRM SOLDUNREGISTERED SECURITIES IN THAT NO REGISTRATION STATEMENT WASIN EFFECT FOR THE SALES OF PENNY STOCKS. THROUGH THE USE OFMAILS, TELEPHONE AND OTHER INTERSTATE COMMUNICATIONS, THEFIRM USED THE MEANS OR INSTRUMENTS OF TRANSPORTATION ORCOMMUNICATIONS IN INTERSTATE COMMERCE TO EFFECT THE SALES OFSECURITIES.THE FIRM FAILED TO IMPLEMENT A SUPERVISORY SYSTEM REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH SECTION 5 IN THE SALE OFPENNY STOCKS. THE FIRM HAD NO SYSTEM OR PROCEDURE TODETERMINE WHETHER STOCKS WERE RESTRICTED OR FREELYTRADABLE AND FAILED TO CONDUCT AN APPROPRIATE REVIEW FORCOMPLIANCE WITH SECTION 5. THE FIRM'S SURVEILLANCE STAFF ANDBRANCH ADMINISTRATION STAFF KNEW OR SHOULD HAVE KNOWN ABOUTRED FLAGS, YET FAILED TO FOLLOW UP TO DETERMINE WHETHER THESTOCKS WERE IN FACT FREE TO TRADE.THE FIRM FAILED TO ESTABLISH AND IMPLEMENT POLICIES ANDPROCEDURES THAT CAN BE REASONABLY EXPECTED TO DETECT ANDCAUSE THE REPORTING OF TRANSACTIONS REQUIRED UNDER 31 U.S.C.5318(G), AND FAILED TO ESTABLISH AND IMPLEMENT POLICIES,PROCEDURES, AND INTERNAL CONTROLS REASONABLY DESIGNED TOACHIEVE COMPLIANCE WITH THE BANK SECRECY ACT AND THEIMPLEMENTING REGULATIONS THEREUNDER. THE FIRM'S ANTI-MONEYLAUNDERING PROCEDURES FAILED TO ADEQUATELY ADDRESS THEDETECTION, MONITORING, ANALYZING, INVESTIGATING, AND REPORTINGOF SUSPICIOUS ACTIVITY IN THE CONTEXT OF PATTERNS OF SUSPICIOUSACTIVITY IN PENNY STOCK TRADES, OR RED FLAGS RELATING TO PENNYSTOCK TRANSACTIONS IDENTIFIED BY THE FIRM'S SURVEILLANCE ORCOMPLIANCE PERSONNEL. AS A RESULT, THE FIRM FAILED TOINVESTIGATE THE SUSPICIOUS ACTIVITY. THE FIRM'S POLICIES REQUIREDENHANCED DUE DILIGENCE FOR CORRESPONDENT ACCOUNTS ANDRESTRICTED A NEW FOREIGN FINANCIAL INSTITUTION ACCOUNT TOPROPRIETARY BUSINESS FOR THE ENTITY THAT OPENED IT.NOTWITHSTANDING THE FIRM'S PROCEDURES, THE FIRM FAILED TOINVESTIGATE OR RESPOND TO THE PATTERN OF SUSPICIOUS ACTIVITY INA CUSTOMER'S ACCOUNT AND IGNORED RED FLAGS THAT CUSTOMERWAS TRADING FOR ITS OWN UNDERLYING CLIENTS. THE FIRM'SPROCEDURES AND INTERNAL CONTROLS FOR MONITORING SUSPICIOUSACTIVITY WERE INADEQUATE AND NOT REASONABLY DESIGNED TOMONITOR AND ACHIEVE COMPLIANCE WITH THE REQUIREMENTS OF THEBANK SECRECY ACT RELATING TO FOREIGN FINANCIAL INSTITUTIONS.Current Status:Final102©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:N/ADate Initiated:05/06/2013Docket/Case Number:2009018668801Principal Product Type:Penny Stock(s)Other Product Type(s):Resolution Date:08/05/2013Resolution:Other Sanctions Ordered:UNDERTAKINGSanction Details:WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE IT IS CENSURED, FINED $1,425,000 ANDUNDERTAKES TO: RETAIN, WITHIN 60 DAYS OF THE DATE OF THE ORDERACCEPTING OFFER OF SETTLEMENT, AN INDEPENDENT CONSULTANT, TOCONDUCT A COMPREHENSIVE REVIEW OF THE ADEQUACY OF THE FIRM'SPOLICIES, SYSTEMS AND PROCEDURES (WRITTEN AND OTHERWISE) ANDTRAINING RELATING TO: THE RECEIPT OR PURCHASE AND SUBSEQUENTJOURNAL OR SALE OF PENNY STOCK; THE SUPERVISION OF FOREIGNFINANCIAL INSTITUTIONS, INCLUDING THE FIRM'S "KNOW YOURCUSTOMER" OBLIGATIONS; AND THE FIRM'S ANTI-MONEY LAUNDERINGPROCEDURES, INCLUDING FOREIGN FINANCIAL INSTITUTIONS ANDHANDLING THE MOVEMENT OF SECURITIES. AT THE CONCLUSION OF THEREVIEW, WHICH SHALL BE NO MORE THAN 120 DAYS AFTER THE DATE OFTHE ORDER ACCEPTING OFFER OF SETTLEMENT, REQUIRE THEINDEPENDENT CONSULTANT TO SUBMIT TO THE FIRM AND FINRA STAFF AWRITTEN REPORT. WITHIN 60 DAYS AFTER DELIVERY OF THE WRITTENREPORT, THE FIRM SHALL ADOPT AND IMPLEMENT THERECOMMENDATIONS OF THE INDEPENDENT CONSULTANT OR, IF ITDETERMINES THAT A RECOMMENDATION IS UNDULY BURDENSOME ORDoes the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $1,425,000.00Decision & Order of Offer of Settlement103©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceIMPRACTICAL, PROPOSE AN ALTERNATIVE PROCEDURE TO THEINDEPENDENT CONSULTANT DESIGNED TO ACHIEVE THE SAMEOBJECTIVE. THE FIRM WILL ABIDE BY THE INDEPENDENT CONSULTANT'SULTIMATE DETERMINATION WITH RESPECT TO ANY PROPOSEDALTERNATIVE PROCEDURE AND MUST ADOPT AND IMPLEMENT ALLRECOMMENDATIONS DEEMED APPROPRIATE BY THE INDEPENDENTCONSULTANT. WITHIN 30 DAYS AFTER THE ISSUANCE OF THE LATER OFTHE INDEPENDENT CONSULTANT'S WRITTEN REPORT OR WRITTENDETERMINATION REGARDING ALTERNATIVE PROCEDURES (IF ANY), THEFIRM SHALL PROVIDE FINRA STAFF WITH A WRITTEN IMPLEMENTATIONREPORT, CERTIFIED BY AN OFFICER OF THE FIRM, ATTESTING TO,CONTAINING DOCUMENTATION OF, AND SETTING FORTH THE DETAILS OFTHE FIRM'S IMPLEMENTATION OF THE INDEPENDENT CONSULTANT'SRECOMMENDATIONS. FINE PAID IN FULL ON NOVEMBER 1, 2013.iReporting Source:FirmAllegations:SECTION 5 OF THE SECURITIES ACT OF 1933, FINRA RULES 2010, 3310(A)AND (B), NASD RULES 2110, 3110, 3110(A) AND (B): THE FIRM SOLDUNREGISTERED SECURITIES IN THAT NO REGISTRATION STATEMENT WASIN EFFECT FOR THE SALES OF PENNY STOCKS. THROUGH THE USE OFMAILS, TELEPHONE AND OTHER INTERSTATE COMMUNICATIONS, THEFIRM USED THE MEANS OR INSTRUMENTS OF TRANSPORTATION ORCOMMUNICATIONS IN INTERSTATE COMMERCE TO EFFECT THE SALES OFSECURITIES. THE FIRM FAILED TO IMPLEMENT A SUPERVISORY SYSTEMREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH SECTION 5 INTHE SALE OF PENNY STOCKS. THE FIRM HAD NO SYSTEM ORPROCEDURE TO DETERMINE WHETHER STOCKS WERE RESTRICTED ORFREELY TRADABLE AND FAILED TO CONDUCT AN APPROPRIATE REVIEWFOR COMPLIANCE WITH SECTION 5. THE FIRM'S SURVEILLANCE STAFFAND BRANCH ADMINISTRATION STAFF KNEW OR SHOULD HAVE KNOWNABOUT RED FLAGS, YET FAILED TO FOLLOW UP TO DETERMINE WHETHERTHE STOCKS WERE IN FACT FREE TO TRADE. THE FIRM FAILED TOESTABLISH AND IMPLEMENT POLICIES AND PROCEDURES THAT CAN BEREASONABLY EXPECTED TO DETECT AND CAUSE THE REPORTING OFTRANSACTIONS REQUIRED UNDER 31 U.S.C. 5318(G), AND FAILED TOESTABLISH AND IMPLEMENT POLICIES, PROCEDURES, AND INTERNALCONTROLS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEBANK SECRECY ACT AND THE IMPLEMENTING REGULATIONSTHEREUNDER. THE FIRM'S ANTI-MONEY LAUNDERING PROCEDURESFAILED TO ADEQUATELY ADDRESS THE DETECTION, MONITORING,ANALYZING, INVESTIGATING, AND REPORTING OF SUSPICIOUS ACTIVITYIN THE CONTEXT OF PATTERNS OF SUSPICIOUS ACTIVITY IN PENNYCurrent Status:Final104©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:N/ADate Initiated:05/06/2013Docket/Case Number:2009018668801Principal Product Type:Penny Stock(s)Other Product Type(s):STOCK TRADES, OR RED FLAGS RELATING TO PENNY STOCKTRANSACTIONS IDENTIFIED BY THE FIRM'S SURVEILLANCE ORCOMPLIANCE PERSONNEL. AS A RESULT, THE FIRM FAILED TOINVESTIGATE THE SUSPICIOUS ACTIVITY. THE FIRM'S POLICIES REQUIREDENHANCED DUE DILIGENCE FOR CORRESPONDENT ACCOUNTS ANDRESTRICTED A NEW FOREIGN FINANCIAL INSTITUTION ACCOUNT TOPROPRIETARY BUSINESS FOR THE ENTITY THAT OPENED IT.NOTWITHSTANDING THE FIRM'S PROCEDURES, THE FIRM FAILED TOINVESTIGATE OR RESPOND TO THE PATTERN OF SUSPICIOUS ACTIVITY INA CUSTOMER'S ACCOUNT AND IGNORED RED FLAGS THAT CUSTOMERWAS TRADING FOR ITS OWN UNDERLYING CLIENTS. THE FIRM'SPROCEDURES AND INTERNAL CONTROLS FOR MONITORING SUSPICIOUSACTIVITY WERE INADEQUATE AND NOT REASONABLY DESIGNED TOMONITOR AND ACHIEVE COMPLIANCE WITH THE REQUIREMENTS OF THEBANK SECRECY ACT RELATING TO FOREIGN FINANCIAL INSTITUTIONS.Resolution Date:08/05/2013Resolution:Other Sanctions Ordered:UNDERTAKINGSanction Details:WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE IT IS CENSURED, FINED $1,425,000 ANDUNDERTAKES TO: RETAIN, WITHIN 60 DAYS OF THE DATE OF THE ORDERACCEPTING OFFER OF SETTLEMENT, AN INDEPENDENT CONSULTANT, TOCONDUCT A COMPREHENSIVE REVIEW OF THE ADEQUACY OF THE FIRM'SPOLICIES, SYSTEMS AND PROCEDURES (WRITTEN AND OTHERWISE) ANDTRAINING RELATING TO: THE RECEIPT OR PURCHASE AND SUBSEQUENTJOURNAL OR SALE OF PENNY STOCK; THE SUPERVISION OF FOREIGNSanctions Ordered:CensureMonetary/Fine $1,425,000.00Decision & Order of Offer of Settlement105©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceFINANCIAL INSTITUTIONS, INCLUDING THE FIRM'S "KNOW YOURCUSTOMER" OBLIGATIONS; AND THE FIRM'S ANTI-MONEY LAUNDERINGPROCEDURES, INCLUDING FOREIGN FINANCIAL INSTITUTIONS ANDHANDLING THE MOVEMENT OF SECURITIES. AT THE CONCLUSION OF THEREVIEW, WHICH SHALL BE NO MORE THAN 120 DAYS AFTER THE DATE OFTHE ORDER ACCEPTING OFFER OF SETTLEMENT, REQUIRE THEINDEPENDENT CONSULTANT TO SUBMIT TO THE FIRM AND FINRA STAFF AWRITTEN REPORT. WITHIN 60 DAYS AFTER DELIVERY OF THE WRITTENREPORT, THE FIRM SHALL ADOPT AND IMPLEMENT THERECOMMENDATIONS OF THE INDEPENDENT CONSULTANT OR, IF ITDETERMINES THAT A RECOMMENDATION IS UNDULY BURDENSOME ORIMPRACTICAL, PROPOSE AN ALTERNATIVE PROCEDURE TO THEINDEPENDENT CONSULTANT DESIGNED TO ACHIEVE THE SAMEOBJECTIVE. THE FIRM WILL ABIDE BY THE INDEPENDENT CONSULTANT'SULTIMATE DETERMINATION WITH RESPECT TO ANY PROPOSEDALTERNATIVE PROCEDURE AND MUST ADOPT AND IMPLEMENT ALLRECOMMENDATIONS DEEMED APPROPRIATE BY THE INDEPENDENTCONSULTANT. WITHIN 30 DAYS AFTER THE ISSUANCE OF THE LATER OFTHE INDEPENDENT CONSULTANT'S WRITTEN REPORT OR WRITTENDETERMINATION REGARDING ALTERNATIVE PROCEDURES (IF ANY), THEFIRM SHALL PROVIDE FINRA STAFF WITH A WRITTEN IMPLEMENTATIONREPORT, CERTIFIED BY AN OFFICER OF THE FIRM, ATTESTING TO,CONTAINING DOCUMENTATION OF, AND SETTING FORTH THE DETAILS OFTHE FIRM'S IMPLEMENTATION OF THE INDEPENDENT CONSULTANT'SRECOMMENDATIONS.Disclosure 31 of 92iReporting Source:RegulatorAllegations:SEC RULES 17A-3, 17A-4, NASD RULES 2110, 2320, 3110, 4632(C)(5) -OPPENHEIMER & CO., INC. IN TRANSACTIONS FOR OR WITH CUSTOMERS,FAILED TO USE REASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALER MARKET AND FAILED TO BUY OR SELL IN SUCH MARKET SO THATTHE RESULTANT PRICE TO ITS CUSTOMERS WAS AS FAVORABLE ASPOSSIBLE UNDER PREVAILING MARKET CONDITIONS. THE FIRM FAILED TOSHOW ONE OR MORE OF THE FOLLOWING ON BROKERAGE ORDERMEMORANDA: THE CORRECT EXECUTION TIME; THE TIME OF ENTRY; THECORRECT ENTRY TIME; THE ORDER SIZE; THE ORDER TYPE; AND/OR THETERMS AND CONDITIONS. THE FIRM FAILED TO PRESERVE FOR A PERIODOF NOT LESS THAN THREE YEARS, THE FIRST TWO IN AN ACCESSIBLEPLACE, THE MEMORANDA OF THREE BROKERAGE ORDERS. THE FIRMFAILED TO REPORT THE CORRECT EXECUTION TIME TO THEFINRA/NASDAQ TRADE REPORTING FACILITY IN SOME LAST SALECurrent Status:Final106©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:04/02/2013Docket/Case Number:2009018701501Principal Product Type:OtherOther Product Type(s):DESIGNATED SECURITIESREPORTS OF TRANSACTIONS IN DESIGNATED SECURITIES.Resolution Date:04/02/2013Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $22,500 AND ORDERED TOPAY $1,290.58, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS. AREGISTERED FIRM PRINCIPAL SHALL SUBMIT SATISFACTORY PROOF OFPAYMENT OF RESTITUTION, OR OF REASONABLE AND DOCUMENTEDEFFORTS UNDERTAKEN TO EFFECT RESTITUTION TO FINRA NO LATERTHAN 120 DAYS AFTER ACCEPTANCE OF THIS AWC. ANY UNDISTRIBUTEDRESTITUTION AND INTEREST SHALL BE FORWARDED TO THEAPPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONEDPROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER LASTRESIDED. FINE PAID IN FULL ON APRIL 29, 2013Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $22,500.00Disgorgement/RestitutionAcceptance, Waiver & Consent(AWC)iReporting Source:Firm107©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:CensureOther Sanction(s)/ReliefSought:MONETARY FINE, DISGORGEMENT/RESTITUTIONDate Initiated:04/02/2013Docket/Case Number:2009018701501Principal Product Type:OtherOther Product Type(s):DESIGNATED SECURITIESAllegations:SEC RULES 17A-3, 17A-4, NASD RULES 2110, 2320, 3110, 4632(C)(5) -OPPENHEIMER & CO., INC. IN TRANSACTIONS FOR OR WITH CUSTOMERS,FAILED TO USE REASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALER MARKET AND FAILED TO BUY OR SELL IN SUCH MARKET SO THATTHE RESULTANT PRICE TO ITS CUSTOMERS WAS AS FAVORABLE ASPOSSIBLE UNDER PREVAILING MARKET CONDITIONS. THE FIRM FAILED TOSHOW ONE OR MORE OF THE FOLLOWING ON BROKERAGE ORDERMEMORANDA: THE CORRECT EXECUTION TIME; THE TIME OF ENTRY; THECORRECT ENTRY TIME; THE ORDER SIZE; THE ORDER TYPE; AND/OR THETERMS AND CONDITIONS. THE FIRM FAILED TO PRESERVE FOR A PERIODOF NOT LESS THAN THREE YEARS, THE FIRST TWO IN AN ACCESSIBLEPLACE, THE MEMORANDA OF THREE BROKERAGE ORDERS. THE FIRMFAILED TO REPORT THE CORRECT EXECUTION TIME TO THEFINRA/NASDAQ TRADE REPORTING FACILITY IN SOME LAST SALEREPORTS OF TRANSACTIONS IN DESIGNATED SECURITIES.Current Status:FinalResolution Date:04/02/2013Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $22,500 AND ORDERED TOPAY $1,290.58, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS. AREGISTERED FIRM PRINCIPAL SHALL SUBMIT SATISFACTORY PROOF OFPAYMENT OF RESTITUTION, OR OF REASONABLE AND DOCUMENTEDEFFORTS UNDERTAKEN TO EFFECT RESTITUTION TO FINRA NO LATERSanctions Ordered:CensureMonetary/Fine $22,500.00Disgorgement/RestitutionAcceptance, Waiver & Consent(AWC)108©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceTHAN 120 DAYS AFTER ACCEPTANCE OF THIS AWC. ANY UNDISTRIBUTEDRESTITUTION AND INTEREST SHALL BE FORWARDED TO THEAPPROPRIATE ESCHEAT, UNCLAIMED PROPERTY OR ABANDONEDPROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER LASTRESIDED.Disclosure 32 of 92iReporting Source:RegulatorInitiated By:INTERNATIONAL SECURITIES EXCHANGEPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:CENSUREDate Initiated:07/27/2012Docket/Case Number:2010-087 & 2010-140Principal Product Type:OptionsOther Product Type(s):Allegations:DURING THE FIRST QUARTER OF 2010, THE FIRM SUBMITTED 192 ENTRIESTO THEIR LARGE OPTIONS POSITION REPORT ("LOPR") IN WHICH SOCIALSECURITY NUMBERS OR TAX IDENTIFICATIONS HAD NOT BEENCORRECTLY ASSIGNED.DURING THE THIRD QUARTER OF 2010, THE FIRM SUBMITTED 356ENTRIES TO THEIR LOPR IN WHICH SOCIAL SECURITY NUMBERS OR TAXIDENTIFICATIONS HAD NOT BEEN CORRECTLY ASSIGNED.THE CONDUCT DESCRIBED ABOVE, CONSTITUTES SEPERATE VIOLATIONSOF ISE RULE 415 (A)Current Status:FinalResolution Date:07/27/2012Resolution:Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureAcceptance, Waiver & Consent(AWC)109©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:Sanction Details:FIRM FINED $60000Monetary/Fine $60,000.00iReporting Source:FirmInitiated By:INTERNATIONAL SECURITIES EXCHANGEPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:CENSUREDate Initiated:07/27/2012Docket/Case Number:2010-087 & 2010-140Principal Product Type:OptionsOther Product Type(s):Allegations:ON DECEMBER 21, 2012, THE INTERNATIONAL SECURITIES EXCHANGE LLCISSUED A LETTER OF ACCEPTANCE, WAIVER AND CONSENT TOOPPENHEIMER & CO. INC. (CRD #249) FILE NO. 2010-087-140),IN WHICHOPPENHEIMER ACCEPTED AND CONSENTED TO THE ENTRY OF FINDINGS,WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, AS FOLLOWS:DURING THE FIRST QUARTER IN 2010, OPPENHEIMER SUBMITTED 192ENTRIES TO THE LARGE OPTIONS POSITION REPORT ("LOPR")IN WHICHACCOUNTS WITH THE SAME SOCIAL SECURITY NUMBER OR TAXIDENTIFICATION NUMBER HAD NOT BEEN ASSIGNED AN IN-CONCERTNUMBER, AND IN CONCERT FIRM IDENTIFICATION. FURTHER, DURING THETHIRD QUARTER IN 2010, OPPENHEIMER SUBMITTED 256 ENTRIES TO THELOPR IN WHICH ACCOUNTS WITH THE SAME SOCIAL SECURITY NUMBEROR TAX IDENTIFICATION NUMBER HAD NOT BEEN ASSIGNED AN IN-CONCERT NUMBER, AND IN-CONCERT FIRM IDENTIFICATION. THISCONDUCT VIOLATED ISE RULE 415 (A). OPPENHEIMER CONSENTED TO ACENSURE AND AGREED TO PAY $60,000 FINE.Current Status:FinalResolution Date:12/21/2012Resolution:Sanctions Ordered:CensureMonetary/Fine $60,000.00Acceptance, Waiver & Consent(AWC)110©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:Sanction Details:FIRM CENSURED AND FINED $60,000Disclosure 33 of 92iReporting Source:RegulatorInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:01/02/2013Docket/Case Number:2010021596901Principal Product Type:No ProductOther Product Type(s):Allegations:SEC RULE 10B-10, FINRA RULES 6380A, 7450 - OPPENHEIMER & CO INC.'SCUSTOMER CONFIRMATIONS WERE INACCURATE OR INCOMPLETE INTHAT THE FIRM FAILED TO DISCLOSE THE CORRECT TYPE OFREMUNERATION AND FAILED TO DISCLOSE THAT THE PRICE RECEIVED BYTHE CUSTOMER WAS AN AVERAGE PRICE; FAILED TO DISCLOSE THAT THEPRICE RECEIVED BY THE CUSTOMER WAS AN AVERAGE PRICE; FAILED TODISCLOSE THE CORRECT TYPE OF REMUNERATION ON CUSTOMERCONFIRMATIONS; AND FAILED ON ONE OCCASION, TO DISCLOSE THECORRECT TYPE OF REMUNERATION AND FAILED TO DISCLOSE THECORRECT CAPACITY IN WHICH IT ACTED. THE FIRM TRANSMITTEDREPORTS TO THE ORDER AUDIT TRAIL SYSTEM (OATS) THAT CONTAINEDINCORRECT CUSTOMER INSTRUCTION FLAGS OR INCORRECT ROUTEREPORTS. THE FIRM TRANSMITTED REPORTS TO THE FINRA/NASDAQTRADE REPORTING FACILITY THAT CONTAINED INACCURATE DATA.Current Status:FinalResolution Date:01/02/2013Resolution:Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoAcceptance, Waiver & Consent(AWC)111©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $20,000. FINE PAID INFULL ON 1/22/2013.Sanctions Ordered:CensureMonetary/Fine $20,000.00iReporting Source:FirmInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:01/02/2013Docket/Case Number:2010021596901Principal Product Type:No ProductOther Product Type(s):Allegations:SEC RULE 10B-10, FINRA RULES 6380A, 7450 -THAT CERTAIN OFOPPENHEIMER & CO INC.'S CUSTOMER CONFIRMATIONS WEREINACCURATE OR INCOMPLETE IN THAT THE FIRM FAILED TO DISCLOSETHE CORRECT TYPE OF REMUNERATION AND FAILED TO DISCLOSE THATTHE PRICE RECEIVED BY THE CUSTOMER WAS AN AVERAGE PRICE;FAILED TO DISCLOSE THAT THE PRICE RECEIVED BY THE CUSTOMER WASAN AVERAGE PRICE; AND FAILED ON ONE OCCASION, TO DISCLOSE THECORRECT TYPE OF REMUNERATION AND FAILED TO DISCLOSE THECORRECT CAPACITY IN WHICH IT ACTED. THE FIRM ON OCCASIONTRANSMITTED REPORTS TO THE ORDER AUDIT TRAIL SYSTEM (OATS)THAT CONTAINED INCORRECT CUSTOMER INSTRUCTION FLAGS ORINCORRECT ROUTE REPORTS. THE FIRM ON OCCASION TRANSMITTEDREPORTS TO THE FINRA/NASDAQ TRADE REPORTING FACILITY THATCONTAINED INACCURATE DATACurrent Status:FinalResolution Date:01/02/2013Resolution:Sanctions Ordered:CensureAcceptance, Waiver & Consent(AWC)112©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:Sanction Details:THE FIRM IS CENSURED AND FINED $20,000.Firm StatementWITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $20,000.Monetary/Fine $20,000.00Disclosure 34 of 92iReporting Source:RegulatorInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:03/29/2012Docket/Case Number:2009018428701Principal Product Type:Equity - OTCOther Product Type(s):DESIGNATED SECURITIESAllegations:FINRA RULES 2010, 6622(A), 6622(C)(5), 6622(E) - OPPENHEIMER & CO. INC.FAILED, WITHIN 90 SECONDS AFTER EXECUTION, TO TRANSMIT TO THEOTC REPORTING FACILITY LAST SALE REPORTS OF TRANSMISSIONS INOTC EQUITY SECURITIES AND FAILED TO DESIGNATE SOME OF THE LASTSALE REPORTS AS LATE. THIS CONDUCT CONSTITUTES SEPARATE ANDDISTINCT VIOLATIONS OF FINRA RULE 6622(A) AND A PATTERN ORPRACTICE OF LATE REPORTING WITHOUT EXCEPTIONALCIRCUMSTANCES IN VIOLATION OF FINRA RULE 2010. THE FIRMREPORTED SOME LAST SALE REPORTS OF TRANSACTIONS IN OTCEQUITY SECURITIES IT WAS NOT REQUIRED TO REPORT AND FAILED TOREPORT THE CORRECT EXECUTION TIME TO THE OTC REPORTINGFACILITY IN SOME LAST SALE REPORTS OF TRANSACTIONS INDESIGNATED SECURITIES.Current Status:FinalResolution Date:03/29/2012Resolution:Acceptance, Waiver & Consent(AWC)113©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $18,000.FINE PAID IN FULL APRIL 18, 2012.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $18,000.00iReporting Source:FirmInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:03/29/2012Docket/Case Number:2009018428701Principal Product Type:Equity - OTCOther Product Type(s):DESIGNATED SECURITIESAllegations:FINRA RULES 2010, 6622(A), 6622(C)(5), 6622(E) - OPPENHEIMER & CO. INC.FAILED, WITHIN 90 SECONDS AFTER EXECUTION, TO TRANSMIT TO THEOTC REPORTING FACILITY LAST SALE REPORTS OF TRANSMISSIONS INOTC EQUITY SECURITIES AND FAILED TO DESIGNATE SOME OF THE LASTSALE REPORTS AS LATE. THIS CONDUCT CONSTITUTES SEPARATE ANDDISTINCT VIOLATIONS OF FINRA RULE 6622(A) AND A PATTERN ORPRACTICE OF LATE REPORTING WITHOUT EXCEPTIONALCIRCUMSTANCES IN VIOLATION OF FINRA RULE 2010. THE FIRMREPORTED SOME LAST SALE REPORTS OF TRANSACTIONS IN OTCEQUITY SECURITIES IT WAS NOT REQUIRED TO REPORT AND FAILED TOREPORT THE CORRECT EXECUTION TIME TO THE OTC REPORTINGFACILITY IN SOME LAST SALE REPORTS OF TRANSACTIONS INDESIGNATED SECURITIES.Current Status:Final114©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceResolution Date:03/29/2012Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $18,000.Firm StatementOPPENHEIMER & CO. INC., WITHOUT ADMITTING OR DENYING THEFINDINGS IN THE SUBJECT MATTERS, CONSENTED TO A CENSURE ANDPAYMENT OF A FINE OF $18,000 IN CONNECTION WITH CERTAIN LAST SALEREPORTS IN 2009 AND CERTAIN REPORTED EXECUTION TIMES IN 2010 INOTC SECURITIES.Sanctions Ordered:Monetary/Fine $18,000.00Acceptance, Waiver & Consent(AWC)Disclosure 35 of 92iReporting Source:RegulatorInitiated By:NEW HAMPSHIREPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:RESCISSIONDate Initiated:06/09/2011Docket/Case Number:I-2010-0000017URL for Regulatory Action:Principal Product Type:Penny Stock(s)Other Product Type(s):Allegations:UNREGISTERED SECURITIES, MISMARKING ORDER ENTRY TICKETS,FAILURE TO SUPERVISE AND UNSUITABILITY.Current Status:FinalResolution Date:02/01/2012Resolution:Consent115©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:RESCISSION. RECOVERY OF COSTS: $30,000.00. COMPLIANCE REVIEWCONDUCTED BY AN INDEPENDENT THIRD PARTY.Sanction Details:FINE: $125,000.00. COST RECOVERY: $30,000.00. ALL FINES AND COSTSLEVIED AGAINST OPPENHEIMER & CO. INC.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:Monetary/Fine $125,000.00iReporting Source:FirmInitiated By:STATE OF NEW HAMPSHIRE BUREAU OF SECURITIES REGULATIONPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:UNDERTAKINGDate Initiated:06/09/2011Docket/Case Number:1-2010-0000017Principal Product Type:Penny Stock(s)Other Product Type(s):Allegations:NEW HAMPSHIRE ALLEGED THAT BROKERS IN THE PORTSMOUTH, NEWHAMPSHIRE BRANCH PURCHASED THE SAME STOCK FOR SEVERALCUSTOMERS. THE STOCK WAS NOT REGISTERED OR EXEMPT FROMREGISTRATION AT THE TIME OF PURCHASE. SOME TRADE TICKETS FORTHE PURCHASE OF THIS STOCK WERE MISMARKED AS UNSOLICITEDWHEN IN FACT THEY WERE SOLICITED TRADES.Current Status:FinalResolution Date:01/31/2012Resolution:Other Sanctions Ordered:$30,000 COSTS, UNDERTAKING.Sanction Details:OPPENHEIMER WAS ORDERED TO PAY A FINE OF $125,000. AND $30,000 INCOSTS (PAID 2/8/12.)Sanctions Ordered:Monetary/Fine $125,000.00Consent116©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceFirm StatementOPPENHEIMER WAS ORDERED TO PAY A FINE OF $125,000. AND $30,000 INCOSTS (PAID 2/8/12.) OPPENHEIMER FURTHER AGREED TO ANUNDERTAKING, IN WHICH AN OUTSIDE CONSULTANT WOULD BE RETAINEDTO REVIEW AND REPORT ON ACTIVITIES IN THE PORTSMOUTH BRANCHOFFICE FOR THE RELEVANT PERIOD OF TIME. OPPENHEIMER FURTHERAGREED TO OFFER RESCISSION TO THE PURCHASES OF THREEADDITIONAL PENNY STOCKS (RESCISSION OFFER LETTERS WERE MAILED2/3/12.)Disclosure 36 of 92iReporting Source:RegulatorInitiated By:FLORIDA OFFICE OF FINANCIAL REGULATION ("OFFICE")Principal Sanction(s)/ReliefSought:Cease and DesistOther Sanction(s)/ReliefSought:Date Initiated:08/20/2009Docket/Case Number:0442A-S-07/09URL for Regulatory Action:Principal Product Type:No ProductOther Product Type(s):Allegations:ON 8/20/2009, THE OFFICE EXECUTED A STIPULATION AND CONSENTAGREEMENT IN THE MATTER OF OPPENHEIMER & CO. INC. WHO NEITHERADMITTED NOR DENIED THE FINDINGS BUT CONSENTED TO THE ENTRYOF FINDINGS BY THE OFFICE THAT THEY FAILED TO MAINTAIN ADEQUATEWRITTEN SUPERVISORY PROCEDURES BY NOT HAVING ANYSUPERVISORY PROCEDURES ADDRESSING THE BORROWING OF MONEYFROM CLIENTS.Current Status:FinalResolution Date:08/21/2009Resolution:Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoOrder117©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:Sanction Details:ON 8/21/2009, THE OFFICE ENTERED A FINAL ORDER ADOPTING THESTIPULATION AND CONSENT AGREEMENT WHEREBY OPPENHEIMERNEITHER ADMITTED NOR DENIED THE OFFICE'S FINDINGS BUT AGREEDTO CEASE AND DESIST FROM FUTURE VIOLATIONS OF CHAPTER 517, F.S.OPPENHEIMER PAID THE ADMINISTRATIVE FINE OF $5,000.00 AT THE TIMEOF THE EXECUTION OF THE STIPULATION AND CONSENT AGREEMENT ON8/20/2009.Regulator StatementPER THE OFFICE'S STIUPLATIOPN AND CONSENT AGREEMENT DATED8/20/2009, THE OFFICE RECEIVED INFORMATION THAT OPPENHEIMER HADTERMINATED AN EMPLOYEE FROM ITS BRANCH OFFICE LOCATED AT 100N.E. 3RD AVENUE, FT. LAUDERDALE, FLORIDA FOR BORROWING MONEYFROM A CLIENT. THE OFFICE SUBSEQUENTLY CONDUCTED ANEXAMINATION INTO THE CIRCUMSTANCES.Sanctions Ordered:Monetary/Fine $5,000.00Cease and Desist/InjunctioniReporting Source:FirmInitiated By:FLORIDA OFFICE OF FINANCIAL REGULATIONPrincipal Sanction(s)/ReliefSought:Cease and DesistOther Sanction(s)/ReliefSought:Date Initiated:08/20/2009Docket/Case Number:0442A-S-07/09Principal Product Type:No ProductOther Product Type(s):Allegations:ON 8/20/2009, THE OFFICE EXECUTED A STIPULATION AND CONSENTAGREEMENT IN THE MATTER OF OPPENHEIMER & CO. INC. WHO NEITHERADMITTED NOR DENIED THE FINDINGS BUT CONSENTED TO THE ENTRYOF FINDINGS BY THE OFFICE THAT THE FIRM FAILED TO MAINTAINADEQUATE WRITTEN SUPERVISORY PROCEDURES BY NOT HAVING ANYSUPERVISORY PROCEDURES ADDRESSING THE BORROWING OF MONEYFROM CLIENTS.Current Status:FinalResolution:Order118©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceResolution Date:08/21/2009Other Sanctions Ordered:Sanction Details:ON 8/21/2009, THE OFFICE ENTERED A FINAL ORDER ADOPTING THESTIPULATION AND CONSENT AGREEMENT WHEREBY OPPENHEIMERNEITHER ADMITTED NOR DENIED THE OFFICE'S FINDINGS BUT AGREEDTO CEASE AND DESIST FROM FUTURE VIOLATIONS OF CHAPTER 517, F.S.OPPENHEIMER PAID THE ADMINISTRATIVE FINE OF $5,000.00 AT THE TIMEOF THE EXECUTION OF THE STIPULATION AND CONSENT AGREEMENT ON8/20/2009.Firm StatementPER THE OFFICE'S STIPULATION AND CONSENT AGREEMENT DATED8/20/2009, THE OFFICE RECEIVED INFORMATION THAT OPPENHEIMER HADTERMINATED AN EMPLOYEE FROM ITS BRANCH OFFICE LOCATED AT 100N.E. 3RD AVENUE, FT. LAUDERDALE, FLORIDA FOR BORROWING MONEYFROM A CLIENT. THE OFFICE SUBSEQUENTLY CONDUCTED ANEXAMINATION INTO THE CIRCUMSTANCES.Sanctions Ordered:Monetary/Fine $5,000.00Cease and Desist/InjunctionDisclosure 37 of 92iReporting Source:RegulatorAllegations:MSRB RULES G-8, G-17, G-27, G-32: THE FIRM FAILED TO DELIVER OFFICIALSTATEMENTS BY SETTLEMENT DATE TO NUMEROUS CUSTOMERS WHOPURCHASED NEW ISSUE MUNICIPAL SECURITIES DURING THE PRIMARYOFFERING DISCLOSURE PERIOD. IN ALL OF THESE TRANSACTIONS, THEFIRM WAS NEITHER AN UNDERWRITER NOR PART OF THE UNDERWRITINGSYNDICATE. HOWEVER, THE FIRM WAS REQUIRED TO DELIVER ANOFFICIAL STATEMENT TO EACH CUSTOMER BY SETTLEMENT DATE, ASREQUIRED BY MSRB RULE G-32. THE FIRM FAILED TO KEEP A RECORD OFDELIVERIES OF OFFICIAL STATEMENTS TO PURCHASERS OF NEW ISSUEMUNICIPAL SECURITIES, AS REQUIRED BY MSRB RULE G-8(A)(XIII), WHICHREQUIRES BROKER-DEALERS TO KEEP A RECORD OF ALL DELIVERIES OFOFFICIAL STATEMENTS TO PURCHASERS OF NEW ISSUE MUNICIPALSECURITIES REQUIRED TO BE PROVIDED UNDER MSRB RULE G-32. THEFIRM FAILED TO ENFORCE ITS WRITTEN SUPERVISORY PROCEDURESPERTAINING TO: (1) THE FIRM'S OFFICIAL STATEMENT DELIVERYREQUIREMENTS TO CUSTOMERS WHO PURCHASED NEW ISSUEMUNICIPAL SECURITIES FOR SECONDARY MARKET TRANSACTIONS THATOCCURRED DURING THE PRIMARY OFFERING DISCLOSURE PERIOD,INCLUDING THOSE TRANSACTIONS IN WHICH THE FIRM WAS NOT ANUNDERWRITER NOR PART OF THE UNDERWRITING SYNDICATE, ASCurrent Status:Final119©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:N/ADate Initiated:05/10/2011Docket/Case Number:2009018400501Principal Product Type:Debt - MunicipalOther Product Type(s):REQUIRED BY MSRB RULE G-32; AND (2) THE FIRM'S REQUIREMENTS TOMAINTAIN VARIOUS RECORDS PERTAINING TO ITS OBLIGATIONS TODELIVER OFFICIAL STATEMENTS TO CUSTOMERS WHO PURCHASED NEWISSUE MUNICIPAL SECURITIES, INCLUDING THOSE TRANSACTIONS INWHICH THE FIRM WAS NOT AN UNDERWRITER NOR PART OF THEUNDERWRITING SYNDICATE, AS REQUIRED BY MSRB RULE G-8.Resolution Date:05/10/2011Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS CENSURED AND FINED $100,000.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $100,000.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmAllegations:MSRB RULES G-8, G-17, G-27, G-32: THE FIRM FAILED TO DELIVER OFFICIALSTATEMENTS BY SETTLEMENT DATE TO NUMEROUS CUSTOMERS WHOPURCHASED NEW ISSUE MUNICIPAL SECURITIES DURING THE PRIMARYOFFERING DISCLOSURE PERIOD. IN ALL OF THESE TRANSACTIONS, THECurrent Status:Final120©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:Date Initiated:05/10/2011Docket/Case Number:2009018400501Principal Product Type:Debt - MunicipalOther Product Type(s):FIRM WAS NEITHER AN UNDERWRITER NOR PART OF THE UNDERWRITINGSYNDICATE. HOWEVER, THE FIRM WAS REQUIRED TO DELIVER ANOFFICIAL STATEMENT TO EACH CUSTOMER BY SETTLEMENT DATE, ASREQUIRED BY MSRB RULE G-32. THE FIRM FAILED TO KEEP A RECORD OFDELIVERIES OF OFFICIAL STATEMENTS TO PURCHASERS OF NEW ISSUEMUNICIPAL SECURITIES, AS REQUIRED BY MSRB RULE G-8(A)(XIII), WHICHREQUIRES BROKER-DEALERS TO KEEP A RECORD OF ALL DELIVERIES OFOFFICIAL STATEMENTS TO PURCHASERS OF NEW ISSUE MUNICIPALSECURITIES REQUIRED TO BE PROVIDED UNDER MSRB RULE G-32. THEFIRM FAILED TO ENFORCE ITS WRITTEN SUPERVISORY PROCEDURESPERTAINING TO: (1) THE FIRM'S OFFICIAL STATEMENT DELIVERYREQUIREMENTS TO CUSTOMERS WHO PURCHASED NEW ISSUEMUNICIPAL SECURITIES FOR SECONDARY MARKET TRANSACTIONS THATOCCURRED DURING THE PRIMARY OFFERING DISCLOSURE PERIOD,INCLUDING THOSE TRANSACTIONS IN WHICH THE FIRM WAS NOT ANUNDERWRITER NOR PART OF THE UNDERWRITING SYNDICATE, ASREQUIRED BY MSRB RULE G-32; AND (2) THE FIRM'S REQUIREMENTS TOMAINTAIN VARIOUS RECORDS PERTAINING TO ITS OBLIGATIONS TODELIVER OFFICIAL STATEMENTS TO CUSTOMERS WHO PURCHASED NEWISSUE MUNICIPAL SECURITIES, INCLUDING THOSE TRANSACTIONS INWHICH THE FIRM WAS NOT AN UNDERWRITER NOR PART OF THEUNDERWRITING SYNDICATE, AS REQUIRED BY MSRB RULE G-8.Resolution Date:05/10/2011Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;Sanctions Ordered:CensureMonetary/Fine $100,000.00Acceptance, Waiver & Consent(AWC)121©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceTHEREFORE IT IS CENSURED AND FINED $100,000.Disclosure 38 of 92iReporting Source:RegulatorAllegations:SEC RULE 10B-10, FINRA RULES 2010, 7450, NASD RULE 3010, MSRBRULES G-17, G-30(A): IN SEVEN TRANSACTIONS, THE FIRM PURCHASEDMUNICIPAL SECURITIES FOR ITS OWN ACCOUNT FROM A CUSTOMERAND/OR SOLD MUNICIPAL SECURITIES FOR ITS OWN ACCOUNT TO ACUSTOMER AT AN AGGREGATE PRICE (INCLUDING ANY MARK-DOWN ORMARK-UP) THAT WAS NOT FAIR AND REASONABLE, TAKING INTOCONSIDERATION ALL RELEVANT FACTORS, INCLUDING THE BESTJUDGMENT OF THE BROKER, DEALER OR MUNICIPAL SECURITIES DEALERAS TO THE FAIR MARKET VALUE OF THE SECURITIES AT THE TIME OF THETRANSACTIONS AND OF ANY SECURITIES EXCHANGED OR TRADED INCONNECTION WITH THE TRANSACTION, THE EXPENSE INVOLVED INEFFECTING THE TRANSACTION, THE FACT THAT THE BROKER, DEALER ORMUNICIPAL SECURITIES DEALER IS ENTITLED TO A PROFIT, AND THETOTAL DOLLAR AMOUNT OF THE TRANSACTIONS. THE FIRM FAILED ON SIXOCCASIONS TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMER ITS CORRECT CAPACITY IN THE TRANSACTION; FAILED ON 12OCCASIONS TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMER ITS CORRECT CAPACITY IN THE TRANSACTION, AND THAT THECOMMISSION WAS A MARKUP/MARKDOWN OR COMMISSION EQUIVALENT;FAILED ON TWO OCCASIONS TO PROVIDE WRITTEN NOTIFICATIONDISCLOSING TO ITS CUSTOMER ITS CORRECT CAPACITY IN THETRANSACTION AND THAT WHEN ACTING AS A PRINCIPAL FOR ITS OWNACCOUNT THAT IT WAS A MARKET MAKER IN EACH SECURITY; AND FAILEDON THREE OCCASIONS TO PROVIDE WRITTEN NOTIFICATION DISCLOSINGTO ITS CUSTOMER THAT WHEN ACTING AS A PRINCIPAL FOR ITS OWNACCOUNT THAT IT WAS A MARKET MAKER IN EACH SECURITY. THE FIRMTRANSMITTED TO THE ORDER AUDIT TRAIL SYSTEM (OATS) TEN REPORTSTHAT CONTAINED INACCURATE, INCOMPLETE, OR IMPROPERLYFORMATTED DATA. SPECIFICALLY, THE REPORTS CONTAINEDINACCURATE ORDER ROUTE REPORTS, MISSING ROUTE REPORTS, ORINCORRECT SHARE QUANTITIES. THE FIRM'S SUPERVISORY SYSTEM DIDNOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RESPECT TO CERTAIN APPLICABLE SECURITIES LAWSAND REGULATIONS, AND/OR THE RULES OF FINRA. AT A MINIMUM,ADEQUATE WRITTEN SUPERVISORY PROCEDURES ADDRESSING QUALITYOF MARKETS TOPICS SHOULD DESCRIBE THE FOLLOWING: SPECIFICIDENTIFICATION OF THE INDIVIDUAL(S) RESPONSIBLE FOR SUPERVISION;THE SUPERVISORY STEPS AND REVIEWS TO BE TAKEN BY THECurrent Status:Final122©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:N/ADate Initiated:10/12/2010Docket/Case Number:2008013630001Principal Product Type:Debt - MunicipalOther Product Type(s):APPROPRIATE SUPERVISOR; THE FREQUENCY OF SUCH REVIEWS; ANDHOW SUCH REVIEWS SHALL BE DOCUMENTED. THE FIRM'S WRITTENSUPERVISORY PROCEDURES FAILED TO PROVIDE FOR ONE OR MORE OFTHE FOUR ABOVE-CITED MINIMUM REQUIREMENTS FOR ADEQUATEWRITTEN SUPERVISORY PROCEDURES, IN THE FOLLOWING SUBJECTAREAS: BEST EXECUTION: RISKLESS PRINCIPAL ORDERS; TRADEREPORTING: GENERAL TRADE REPORTING; RISKLESS PRINCIPALTRANSACTIONS; SALES TRANSACTIONS: SEC RULE 204; SEC RULE 10B-21;AND SHORT SALE INDICATOR REPORTING.Resolution Date:10/12/2010Resolution:Other Sanctions Ordered:UNDERTAKINGSanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, OPPENHEIMER & CO,INC. CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE IT IS CENSURED, FINED $57,500, UNDERTAKES TOREVISE THE FIRM'S WRITTEN SUPERVISORY PROCEDURES WITHRESPECT TO BEST EXECUTION: RISKLESS PRINCIPAL ORDERS; TRADEREPORTING: GENERAL TRADE REPORTING, RISKLESS PRINCIPALTRANSACTIONS; SALES TRANSACTIONS: SEC RULE 204, SEC RULE 10B-21,AND SHORT SALE INDICATOR REPORTING; AND IS REQUIRED TO PAYDoes the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $57,500.00Disgorgement/RestitutionAcceptance, Waiver & Consent(AWC)123©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceRESTITUTION IN THE AMOUNT OF $17,879.51, PLUS INTEREST. WITHIN 30BUSINESS DAYS OF THE ACCEPTANCE OF THE AWC BY THE NAC, AREGISTERED PRINCIPAL OF THE FIRM SHALL SUBMIT TO FINRA A SIGNED,DATED LETTER, OR AN E-MAIL FROM A WORK-RELATED ACCOUNT OF THEREGISTERED PRINCIPAL, PROVIDING THE FOLLOWING INFORMATION: AREFERENCE TO THIS MATTER, A REPRESENTATION THAT THE FIRM HASREVISED ITS WRITTEN SUPERVISORY PROCEDURES TO ADDRESS THEDEFICIENCIES DESCRIBED ABOVE, AND THE DATE THE REVISEDPROCEDURES WERE IMPLEMENTED. NO LATER THAN 120 DAYS AFTERACCEPTANCE OF THE AWC, A REGISTERED PRINCIPAL OF THE FIRM SHALLSUBMIT SATISFACTORY PROOF OF PAYMENT OF THE RESTITUTION, OR OFTHE REASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECTRESTITUTION, TO FINRA. IF FOR ANY REASON, RESPONDENT CANNOTLOCATE ANY CUSTOMER AFTER REASONABLE AND DOCUMENTEDEFFORTS WITHIN SUCH PERIOD, OR SUCH ADDITIONAL PERIOD AGREEDTO BY FINRA, RESPONDENT SHALL FORWARD ANY UNDISTRIBUTEDRESTITUTION AND INTEREST TO THE APPROPRIATE ESCHEAT,UNCLAIMED-PROPERTY OR ABANDONED-PROPERTY FUND FOR THESTATE IN WHICH THE CUSTOMER IS KNOWN TO HAVE LAST RESIDED.iReporting Source:FirmAllegations:SEC RULE 10B-10, FINRA RULES 2010, 7450, NASD RULE 3010, MSRBRULES G-17, G-30(A): IN SEVEN TRANSACTIONS, THE FIRM PURCHASEDMUNICIPAL SECURITIES FOR ITS OWN ACCOUNT FROM A CUSTOMERAND/OR SOLD MUNICIPAL SECURITIES FOR ITS OWN ACCOUNT TO ACUSTOMER AT AN AGGREGATE PRICE (INCLUDING ANY MARK-DOWN ORMARK-UP) THAT WAS NOT FAIR AND REASONABLE, TAKING INTOCONSIDERATION ALL RELEVANT FACTORS, INCLUDING THE BESTJUDGMENT OF THE BROKER, DEALER OR MUNICIPAL SECURITIES DEALERAS TO THE FAIR MARKET VALUE OF THE SECURITIES AT THE TIME OF THETRANSACTIONS AND OF ANY SECURITIES EXCHANGED OR TRADED INCONNECTION WITH THE TRANSACTION, THE EXPENSE INVOLVED INEFFECTING THE TRANSACTION, THE FACT THAT THE BROKER, DEALER ORMUNICIPAL SECURITIES DEALER IS ENTITLED TO A PROFIT, AND THETOTAL DOLLAR AMOUNT OF THE TRANSACTIONS. THE FIRM FAILED ON SIXOCCASIONS TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMER ITS CORRECT CAPACITY IN THE TRANSACTION; FAILED ON 12OCCASIONS TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMER ITS CORRECT CAPACITY IN THE TRANSACTION, AND THAT THECOMMISSION WAS A MARKUP/MARKDOWN OR COMMISSION EQUIVALENT;FAILED ON TWO OCCASIONS TO PROVIDE WRITTEN NOTIFICATIONDISCLOSING TO ITS CUSTOMER ITS CORRECT CAPACITY IN THECurrent Status:Final124©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:DEBT-MUNICIPALDate Initiated:10/12/2010Docket/Case Number:2008013630001Principal Product Type:Debt - MunicipalOther Product Type(s):TRANSACTION AND THAT WHEN ACTING AS A PRINCIPAL FOR ITS OWNACCOUNT THAT IT WAS A MARKET MAKER IN EACH SECURITY; AND FAILEDON THREE OCCASIONS TO PROVIDE WRITTEN NOTIFICATION DISCLOSINGTO ITS CUSTOMER THAT WHEN ACTING AS A PRINCIPAL FOR ITS OWNACCOUNT THAT IT WAS A MARKET MAKER IN EACH SECURITY. THE FIRMTRANSMITTED TO THE ORDER AUDIT TRAIL SYSTEM (OATS) TEN REPORTSTHAT CONTAINED INACCURATE, INCOMPLETE, OR IMPROPERLYFORMATTED DATA. SPECIFICALLY, THE REPORTS CONTAINEDINACCURATE ORDER ROUTE REPORTS, MISSING ROUTE REPORTS, ORINCORRECT SHARE QUANTITIES. THE FIRM'S SUPERVISORY SYSTEM DIDNOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH RESPECT TO CERTAIN APPLICABLE SECURITIES LAWSAND REGULATIONS, AND/OR THE RULES OF FINRA. AT A MINIMUM,ADEQUATE WRITTEN SUPERVISORY PROCEDURES ADDRESSING QUALITYOF MARKETS TOPICS SHOULD DESCRIBE THE FOLLOWING: SPECIFICIDENTIFICATION OF THE INDIVIDUAL(S) RESPONSIBLE FOR SUPERVISION;THE SUPERVISORY STEPS AND REVIEWS TO BE TAKEN BY THEAPPROPRIATE SUPERVISOR; THE FREQUENCY OF SUCH REVIEWS; ANDHOW SUCH REVIEWS SHALL BE DOCUMENTED. THE FIRM'S WRITTENSUPERVISORY PROCEDURES FAILED TO PROVIDE FOR ONE OR MORE OFTHE FOUR ABOVE-CITED MINIMUM REQUIREMENTS FOR ADEQUATEWRITTEN SUPERVISORY PROCEDURES, IN THE FOLLOWING SUBJECTAREAS: BEST EXECUTION: RISKLESS PRINCIPAL ORDERS; TRADEREPORTING: GENERAL TRADE REPORTING; RISKLESS PRINCIPALTRANSACTIONS; SALES TRANSACTIONS: SEC RULE 204; SEC RULE 10B-21;AND SHORT SALE INDICATOR REPORTING.Resolution Date:10/12/2010Resolution:Sanctions Ordered:CensureMonetary/Fine $57,500.00Disgorgement/RestitutionAcceptance, Waiver & Consent(AWC)125©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:UNDERTAKINGSanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, OPPENHEIMER & CO,INC. CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE IT IS CENSURED, FINED $57,500, UNDERTAKES TOREVISE THE FIRM'S WRITTEN SUPERVISORY PROCEDURES WITHRESPECT TO BEST EXECUTION: RISKLESS PRINCIPAL ORDERS; TRADEREPORTING: GENERAL TRADE REPORTING, RISKLESS PRINCIPALTRANSACTIONS; SALES TRANSACTIONS: SEC RULE 204, SEC RULE 10B-21,AND SHORT SALE INDICATOR REPORTING; AND IS REQUIRED TO PAYRESTITUTION IN THE AMOUNT OF $17,879.51, PLUS INTEREST. WITHIN 30BUSINESS DAYS OF THE ACCEPTANCE OF THE AWC BY THE NAC, AREGISTERED PRINCIPAL OF THE FIRM SHALL SUBMIT TO FINRA A SIGNED,DATED LETTER, OR AN E-MAIL FROM A WORK-RELATED ACCOUNT OF THEREGISTERED PRINCIPAL, PROVIDING THE FOLLOWING INFORMATION: AREFERENCE TO THIS MATTER, A REPRESENTATION THAT THE FIRM HASREVISED ITS WRITTEN SUPERVISORY PROCEDURES TO ADDRESS THEDEFICIENCIES DESCRIBED ABOVE, AND THE DATE THE REVISEDPROCEDURES WERE IMPLEMENTED. NO LATER THAN 120 DAYS AFTERACCEPTANCE OF THE AWC, A REGISTERED PRINCIPAL OF THE FIRM SHALLSUBMIT SATISFACTORY PROOF OF PAYMENT OF THE RESTITUTION, OR OFTHE REASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECTRESTITUTION, TO FINRA. IF FOR ANY REASON, RESPONDENT CANNOTLOCATE ANY CUSTOMER AFTER REASONABLE AND DOCUMENTEDEFFORTS WITHIN SUCH PERIOD, OR SUCH ADDITIONAL PERIOD AGREEDTO BY FINRA, RESPONDENT SHALL FORWARD ANY UNDISTRIBUTEDRESTITUTION AND INTEREST TO THE APPROPRIATE ESCHEAT,UNCLAIMED-PROPERTY OR ABANDONED-PROPERTY FUND FOR THESTATE IN WHICH THE CUSTOMER IS KNOWN TO HAVE LAST RESIDED.Disclosure 39 of 92iReporting Source:RegulatorInitiated By:MASSACHUSETTS SECURITIES DIVISIONDate Initiated:11/18/2008Allegations:OPPENHEIMER IMPROPERLY CONDUCTED ITS AUCTION RATE SECURITIES("ARS"). OPPENHEIMER SIGNIFICANTLY MISREPRESENTED THE NATUREOF ARS AND THE OVERALL STABILITY AND HEALTH OF THE ARS MARKETWHEN MARKETING THE PRODUCT TO CLIENTS. OPPENHEIMEREXECUTIVES AND ARS DEPARTMENT PERSONNEL SOLD THEIR OWN ARSAS THEY LEARNED THAT THE MARKET WAS IN DANGER OF IMPLODINGAND FAILED TO DISCLOSE THIS INFORMATION TO INVESTORS.Current Status:Final126©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:AN ORDER REQUIRING OPPENHEIMER TO PERMANENTLY CEASE ANDDESIST FROM FURTHER VIOLATIONS OF THE ACT AND REGULATIONS, TOOFFER RESCISSION OF SALES OF ARS AT PAR, TO MAKE FULLRESTITUTION TO INVESTORS, CENSURING OPPENHEIMER, REVOKINGALBERT LOWENTHAL'S MASSACHUSETTS REGISTRATION AS A BROKER-DEALER AGENT, REQUIRING OPPENHEIMER, ALBERT LOWENTHAL,ROBERT LOWENTHAL AND GREG WHITE TO PAY AN ADMINISTRATIVE FINEAND TO TAKE ANY OTHER ACTION THAT A HEARING OFFICER MAY DEEMAPPROPRIATE.Docket/Case Number:E-2008-0080URL for Regulatory Action:Principal Product Type:OtherOther Product Type(s):AUCTION RATE SECURITIESResolution Date:02/26/2010Resolution:Other Sanctions Ordered:OPPENHEIMER SHALL BUY BACK ILLIQUID AUCTION RATE SECURITIESFROM INVESTORS ACCORDING TO A THREE STEP REDEMPTION PROCESSOVER THE COURSE OF A 12 MONTH PERIOD, AS OUTLINED IN THECONSENT ORDER. OPPENHEIMER SHALL ALSO PAY THE DIVISION'SINVESTIGATIVE AND ADMINISTRATIVE HEARING COSTS IN AN AMOUNTTOTALING $250,000.00 TO THE SECRETARY OF THE COMMONWEALTH OFMASSACHUSETTS.Sanction Details:OPPENHEIMER SHALL PROVIDE RELIEF FOR AUCTION RATE SECURITIESINVESTORS VIA A THREE STEP REDEMPTION PROCESS OVER THECOURSE OF A 12 MONTH PERIOD, CONSISTENT WITH THE TERMS OF THECONSENT ORDER.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?YesSanctions Ordered:Disgorgement/RestitutionCease and Desist/InjunctionOrderiReporting Source:Firm127©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:SECRETARY OF THE COMMONWEALTH, MASSACHUSETTS SECURITIESDIVISION (MSD)Principal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:11/18/2008Docket/Case Number:E-2008-0080Principal Product Type:OtherOther Product Type(s):AUCTION RATE SECURITIESAllegations:MSD ALLEGES THAT OPPENHEIMER AND ALBERT LOWENTHAL VIOLATED,INTER ALIA, SECS.101 AND 204(A)(2)(B),AND 204(A)(2)(G) OF THE UNIFORMSECURITIES ACT. THE VIOLATIONS ARE ALLEGED TO HAVE ARISEN FROMOPPENHEIMER'S MARKETING AND SALES OF CERTAIN AUCTION RATESECURITIES. THE MSD CHARACTERIZES THE ALLEGED CONDUCTASSOCIATED WITH THESE ACTIONS AS DISHONEST, FRAUDULENT ANDUNETHICAL.Current Status:FinalResolution Date:02/26/2010Resolution:Other Sanctions Ordered:Sanction Details:OPPENHEIMER SHALL BUY BACK ILLIQUID AUCTION RATE SECURITIESFROM INVESTORS ACCORDING TO A THREE STEP REDEMPTION PROCESSOVER THE COURSE OF A 12 MONTH PERIOD, AS OUTLINED IN THECONSENT ORDER. OPPENHEIMER SHALL ALSO PAY THE DIVISION'SINVESTIGATIVE AND ADMINISTRATIVE HEARING COSTS IN AN AMOUNTTOTALING $250,000.00 TO THE SECRETARY OF THE COMMONWEALTH OFMASSACHUSETTS.Firm StatementOPPENHEIMER SHALL PROVIDE RELIEF FOR AUCTION RATE SECURITIESINVESTORS VIA A THREE STEP REDEMPTION PROCESS OVER THECOURSE OF A 12 MONTH PERIOD, CONSISTENT WITH THE TERMS OF THECONSENT ORDER. ALBERT G. LOWENTHAL WAS DISMISSED FROM THISACTION.Sanctions Ordered:Disgorgement/RestitutionCease and Desist/InjunctionOrderi128©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisclosure 40 of 92Reporting Source:RegulatorInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:06/30/2009Docket/Case Number:2008014261101Principal Product Type:OtherOther Product Type(s):CONSOLIDATED QUOTATION SERVICE SECURITIESAllegations:NASD RULES 2110, 4632(A) - OPPENHEIMER & CO., INC. FAILED, WITHIN 90SECONDS AFTER EXECUTION, TO TRANSMIT TO THE FINRA/NASDAQTRADE REPORTING FACILITY LAST SALE REPORTS OF TRANSACTIONS INCONSOLIDATED QUOTATION SERVICE (CQS)SECURITIES THAT THE FIRMWAS REQUIRED TO REPORT. THIS CONDUCT CONSTITUTES A PATTERN ORPRACTICE OF LATE REPORTING WITHOUT EXCEPTIONALCIRCUMSTANCES IN VIOLATION OF NASD RULES 2110 AND 4632(A).Current Status:FinalResolution Date:06/30/2009Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $7,500.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $7,500.00Acceptance, Waiver & Consent(AWC)iReporting Source:Firm129©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:06/30/2009Docket/Case Number:2008014261101Principal Product Type:OtherOther Product Type(s):CONSOLIDATED QUOTATION SERVICE SECURITIESAllegations:NASD RULES 2110, 4632(A) - OPPENHEIMER & CO., INC. FAILED, WITHIN 90SECONDS AFTER EXECUTION, TO TRANSMIT TO THE FINRA/NASDAQTRADE REPORTING FACILITY LAST SALE REPORTS OF TRANSACTIONS INCONSOLIDATED QUOTATION SERVICE (CQS)SECURITIES THAT THE FIRMWAS REQUIRED TO REPORT. THIS CONDUCT CONSTITUTES A PATTERN ORPRACTICE OF LATE REPORTING WITHOUT EXCEPTIONALCIRCUMSTANCES IN VIOLATION OF NASD RULES 2110 AND 4632(A).Current Status:FinalResolution Date:06/30/2009Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $7,500.Sanctions Ordered:CensureMonetary/Fine $7,500.00Acceptance, Waiver & Consent(AWC)Disclosure 41 of 92iReporting Source:RegulatorAllegations:SEC ADMINISTRATIVE RELEASE 34-59438, FEBRUARY 24, 2009: THESECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMS ITAPPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLICADMINISTRATIVE PROCEEDINGS BE, AND HEREBY ARE, INSTITUTEDPURSUANT TO SECTION 15(B) OF THE SECURITIES EXCHANGE ACT OF1934 AGAINST OPPENHEIMER & CO. INC. ("OPCO") BASED ON ITS FAILURECurrent Status:Final130©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:UNITED STATES SECURITIES AND EXCHANGE COMMISSIONPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:02/24/2009Docket/Case Number:3-13378Principal Product Type:OtherOther Product Type(s):UNSPECIFIED TYPE OF SECURITIESTO SUPERVISE AN EMPLOYEE, WITHIN THE MEANING OF SECTION 15(B)(4)OF THE EXCHANGE ACT, WITH A VIEW TO PREVENTING AND DETECTINGTHE EMPLOYEE'S VIOLATIONS OF THE FEDERAL SECURITIES LAWS. THECOMMISSION ALLEGES THAT OPCO'S EMPLOYEE PROVIDED A TRADER ATANOTHER BROKER-DEALER WITH SECRET GRATUITIES ANDENTERTAINMENT IN EXCHANGE FOR AN INCREASE IN ORDER FLOW FROMTHE OTHER BROKER-DEALER TO OPCO FOR EXECUTION AT PRICES THATWERE FAVORABLE TO OPCO AND DETRIMENTAL TO OTHER BROKER-DEALER'S CUSTOMERS. THE TWO INDIVIDUALS EXCHANGED SEVERALEMAILS, WHICH PRESENTED RED FLAGS, BUT BECAUSE OF A DEFICIENCYIN OPCO'S EMAIL REVIEW PROCEDURES, NONE OF ITS EMPLOYEE'SEMAILS WERE REVIEWED BY OPCO STAFF AS REQUIRED BY OPCO'SELECTRONIC COMMUNICATIONS POLICY. HAD OPCO MONITORED THEEMPLOYEE'S EMAILS, OPCO SUPERVISORS LIKELY WOULD HAVE SEENTHE MESSAGES AND COULD HAVE PREVENTED THE EMPLOYEE'SMISCONDUCT OR DETECTED IT AT AN EARLIER TIME.Resolution Date:02/24/2009Resolution:Other Sanctions Ordered:UNDERTAKING: OPCO HAS UNDERTAKEN TO REVIEW ITS POLICIES,PROCEDURES AND SYSTEMS REGARDING THE CAPTURE AND REVIEWINGOF ELECTRONIC COMMUNICATIONS BY ITS EMPLOYEES. WITHIN 90 DAYSOF THE ISSUANCE OF THIS ORDER, UNLESS OTHERWISE EXTENDED BYDoes the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $850,000.00Order131©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceTHE STAFF OF THE COMMISSION FOR GOOD CAUSE SHOWN, OPCO SHALLSUBMIT A REPORT TO THE COMMISSION DESCRIBING THE REVIEWPERFORMED AND THE CONCLUSIONS AND CHANGES MADE AS A RESULTOF THE REVIEW. FURTHER, AT THE TIME OPCO SUBMITS THE REPORTS,OPCO SHALL CERTIFY TO THE COMMISSION IN WRITING THAT IT HASESTABLISHED PROCEDURES, AND A SYSTEM FOR APPLYING SUCHPROCEDURES, WHICH ARE REASONABLY EXPECTED TO PREVENT ANDDETECT, INSOFAR AS PRACTICABLE, THE VIOLATIONS DESCRIBED IN THISORDER.Sanction Details:RESPONDENT OPCO HAS SUBMITTED AN OFFER OF SETTLEMENT (THE "OFFER") WHICH THE COMMISSION HAS DETERMINED TO ACCEPT.SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS AND ANY OTHERPROCEEDINGS BROUGHT BY OR ON BEHALF OF THE COMMISSION, OR TOWHICH THE COMMISSION IS A PARTY, AND WITHOUT ADMITTING ORDENYING THE FINDINGS, EXCEPT AS TO THE COMMISSION'SJURISDICTION OVER OPCO AND THE SUBJECT MATTER OF THESEPROCEEDINGS, WHICH ARE ADMITTED, OPCO CONSENTS TO THE ENTRYOF THIS ORDER INSTITUTING ADMINISTRATIVE PROCEEDINGS, MAKINGFINDINGS, AND IMPOSING REMEDIAL SANCTIONS PURSUANT TO SECTION15(B) OF THE SECURITIES EXCHANGE ACT OF 1934 ("ORDER").ACCORDINGLY, PURSUANT TO SECTION 15(B) OF THE EXCHANGE ACT,OPCO IS CENSURED AND FINED $850,000. OPCO HAS UNDERTAKEN TOREVIEW ITS POLICIES, PROCEDURES AND SYSTEMS REGARDING THECAPTURE AND REVIEWING OF ELECTRONIC COMMUNICATIONS BY ITSEMPLOYEES.iReporting Source:FirmAllegations:ON FEBRUARY 24, 2009: THE SECURITIES AND EXCHANGE COMMISSION("COMMISSION") INSTITUTED ADMINISTRATIVE PROCEEDINGS BE,AGAINST OPPENHEIMER & CO. INC. ("OPCO") BASED ON ITS FAILURE TOSUPERVISE AN EMPLOYEE, WITH A VIEW TO PREVENTING AND DETECTINGTHE EMPLOYEE'S VIOLATIONS OF THE FEDERAL SECURITIES LAWS. THECOMMISSION ALLEGED THAT OPCO'S EMPLOYEE PROVIDED A TRADER ATANOTHER BROKER-DEALER WITH SECRET GRATUITIES ANDENTERTAINMENT IN EXCHANGE FOR AN INCREASE IN ORDER FLOW FROMTHE OTHER BROKER-DEALER TO OPCO FOR EXECUTION AT PRICES THATWERE FAVORABLE TO OPCO AND DETRIMENTAL TO OTHER BROKER-DEALER'S CUSTOMERS. THE TWO INDIVIDUALS EXCHANGED SEVERALEMAILS, BUT BECAUSE OF A DEFICIENCY IN OPCO'S EMAIL REVIEWPROCEDURES, NONE OF ITS EMPLOYEE'S EMAILS WERE REVIEWED BYOPCO STAFF AS REQUIRED BY OPCO'S ELECTRONIC COMMUNICATIONSCurrent Status:Final132©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:SECURITIES AND EXCHANGE COMMISSIONPrincipal Sanction(s)/ReliefSought:CensureOther Sanction(s)/ReliefSought:FINEDate Initiated:02/24/2009Docket/Case Number:3-13378Principal Product Type:No ProductOther Product Type(s):POLICY.Resolution Date:02/24/2009Resolution:Other Sanctions Ordered:UNDERTAKING: WITHOUT ADMITTING OR DENYING THESE ALLEGATIONSOPCO HAS UNDERTAKEN TO REVIEW ITS POLICIES, PROCEDURES ANDSYSTEMS REGARDING THE CAPTURE AND REVIEWING OF ELECTRONICCOMMUNICATIONS BY ITS EMPLOYEES AND SHALL SUBMIT A REPORT TOTHE COMMISSION.Sanction Details:OPCO CONSENTED TO THE ENTRY OF AN ORDER INSTITUTINGADMINISTRATIVE PROCEEDINGS, MAKING FINDINGS, AND IMPOSINGREMEDIAL SANCTIONS PURSUANT TO SECTION 15(B) OF THE SECURITIESEXCHANGE ACT OF 1934 ("ORDER"). OPCO WAS CENSURED AND FINED$850,000. OPCO HAS UNDERTAKEN TO REVIEW ITS POLICIES,PROCEDURES AND SYSTEMS REGARDING THE CAPTURE AND REVIEWINGOF ELECTRONIC COMMUNICATIONS BY ITS EMPLOYEES.Sanctions Ordered:CensureMonetary/Fine $850,000.00SettledDisclosure 42 of 92iReporting Source:RegulatorAllegations:SEC RULES 10B-10, 605 OF REGULATION NMS, NASD RULE 6955(A) -OPPENHEIMER & CO., INC. FAILED TO PROVIDE WRITTEN NOTIFICATIONDISCLOSING TO ITS CUSTOMERS ITS CORRECT CAPACITY INTRANSACTIONS. THE FIRM TRANSMITTED TO THE ORDER AUDIT TRAILSYSTEM (OATS) REPORTS THAT CONTAINED INACCURATE, INCOMPLETEOR IMPROPERLY FORMATTED DATA - THE FIRM REPORTED RISKLESSCurrent Status:Final133©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:09/24/2008Docket/Case Number:2006005739601Principal Product Type:OtherOther Product Type(s):UNKNOWN TYPES OF SECURITIESPRINCIPAL ORDERS TO OATS WITHOUT USING THE CORRECT REPORTINGEXCEPTION CODE. THE FIRM MADE AVAILABLE A REPORT ON THECOVERED ORDERS IN NATIONAL MARKET SYSTEM SECURITIES THAT ITRECEIVED FOR EXECUTION FROM ANY PERSON THAT INCLUDEDINCORRECT ORDER INFORMATION FOR ORDERS ENTERED.Resolution Date:09/24/2008Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $12,500.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $12,500.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmAllegations:SEC RULES 10B-10, 605 OF REGULATION NMS, NASD RULE 6955(A) -OPPENHEIMER & CO., INC. FAILED TO PROVIDE WRITTEN NOTIFICATIONDISCLOSING TO ITS CUSTOMERS ITS CORRECT CAPACITY INTRANSACTIONS. THE FIRM TRANSMITTED TO THE ORDER AUDIT TRAILSYSTEM (OATS) REPORTS THAT CONTAINED INACCURATE, INCOMPLETECurrent Status:Final134©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:CensureOther Sanction(s)/ReliefSought:Date Initiated:09/24/2008Docket/Case Number:2006005739601Principal Product Type:Equity - OTCOther Product Type(s):OR IMPROPERLY FORMATTED DATA - THE FIRM REPORTED RISKLESSPRINCIPAL ORDERS TO OATS WITHOUT USING THE CORRECT REPORTINGEXCEPTION CODE. THE FIRM MADE AVAILABLE A REPORT ON THECOVERED ORDERS IN NATIONAL MARKET SYSTEM SECURITIES THAT ITRECEIVED FOR EXECUTION FROM ANY PERSON THAT INCLUDEDINCORRECT ORDER INFORMATION FOR ORDERS ENTERED.Resolution Date:09/24/2008Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $12,500.00Firm StatementFIRM WAS CENSURED AND PAID FINE OF $12,500.00.Sanctions Ordered:CensureMonetary/Fine $12,500.00Acceptance, Waiver & Consent(AWC)Disclosure 43 of 92iReporting Source:RegulatorAllegations:NASD RULES 2110, 3010(A) AND 3010(B): OPPENHEIMER FAILED TOESTABLISH, MAINTAIN, AND ENFORCE A SUPERVISORY SYSTEM,INCLUDING WRITTEN PROCEDURES FOR ITS SECURITIES LENDINGBUSINESS, REASONABLY DESIGNED TO MONITOR THE TRADINGACTIVITIES OF ITS STOCK LOAN REPRESENTATIVES IN ORDER TOPREVENT AND DETECT FRAUDULENT STOCK LOAN TRANSACTIONS.OPPENHEIMER DELEGATED RESPONSIBILITY FOR THE DIRECTSUPERVISION OF THE SECURITIES LENDING DEPARTMENT TO ANCurrent Status:Final135©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:07/30/2008Docket/Case Number:2007011878301Principal Product Type:No ProductOther Product Type(s):INDIVIDUAL, AND DID NOT ESTABLISH OR MAINTAIN A SYSTEM OF FOLLOWUP AND REVIEW TO ENSURE THAT HE WAS EFFECTIVELY PERFORMINGHIS DELEGATED SUPERVISORY RESPONSIBILITIES OR PROPERLYEXERCISING HIS SUPERVISORY AUTHORITY. IN ADDITION TOSUPERVISING OPPENHEIMER'S STOCK LOAN DEPARTMENT,RESPONDENT FIRM PERMITTED AN INDIVIDUAL AND ANOTHER STOCKLOAN MANAGER TO NEGOTIATE STOCK LOAN TRANSACTIONS ON BEHALFOF THE FIRM WITH NO REVIEW OR FOLLOW UP, CONTRARY TO ITSSUPERVISORY SYSTEM THAT DOES NOT PERMIT PERSONS TO SUPERVISETHEMSELVES.RESPONDENT'S WRITTEN SUPERVISORY PROCEDURES DID NOT FULLYSATISFY FINRA'S MINIMUM PROCEDURAL STANDARDS BECAUSE THEPROCEDURES DID NOT INCLUDE A DESCRIPTION OF WHAT MANAGERSWERE TO LOOK FOR IN REVIEWING LOANET AND OTHER SUPERVISORYREPORTS, THE STEPS TO BE TAKEN IF SUSPICIOUS ACTIVITY WASDISCOVERED, AND HOW TO DOCUMENT THE SUPERVISOR'S OVERSIGHTACTIVITIES. RESPONDENT'S WRITTEN PROCEDURES DID NOTADEQUATELY PROVIDE A FRAMEWORK BY WHICH SENIOR MANAGEMENTCOULD EVALUATE WHETHER PERSONNEL WERE COMPLYING WITH THESUPERVISORY SYSTEM. AS THE RESULT OF THESE SUPERVISORYDEFICIENCIES, THE FIRM FAILED TO DETECT AND PREVENT INDIVIDUALFROM ENGAGING IN A FRAUDULENT SCHEME TO PARTICIPATE IN STOCKLOAN TRANSACTIONS WITH CERTAIN COUNTERPARTIES AT RATES THATWERE INFERIOR TO RATES OTHERWISE AVAILABLE TO A LENDER IN THEMARKETPLACE, FOR THE BENEFIT OF HIMSELF, FAVOREDCOUNTERPARTIES, AND A FINDER WHO HAD NOT PERFORMED ANYSERVICES IN TE TRANSACTIONS FOR WHICH THEY WERE PAID.Resolution Date:07/30/2008Resolution:Acceptance, Waiver & Consent(AWC)136©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, RESPONDENT MEMBERFIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE, FIRM IS CENSURED AND FINED $100,000.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $100,000.00iReporting Source:FirmInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:CENSUREDate Initiated:07/30/2008Docket/Case Number:2007011878301Principal Product Type:Equity - OTCOther Product Type(s):EQUITY LISTED (COMMON & PREFERRED STOCK)Allegations:OPPENHEIMER FAILED TO ESTABLISH AN ADEQUATE SUPERVISORSYSTEM, TO MONITOR STOCK LENDING ACTIVITY, AND DETECT ANDPREVENT STOCK LOAN PERSONNEL FROM ENGAGING IN BUSINESSDEALINGS WITH FINDERS IN VIOLATION OF OPPENHEIMER POLICY.Current Status:FinalResolution Date:07/30/2008Resolution:Other Sanctions Ordered:Sanction Details:CENSURE AND $100,000.00 FINE.Sanctions Ordered:CensureMonetary/Fine $100,000.00Acceptance, Waiver & Consent(AWC)137©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceFirm StatementWITHOUT ADMITTING OR DENYING ANY ALLEGATIONS, OPPENHEIMERENTERED INTO A LETTER OF ATTEPTANCE WAIVER AND CONSENT ANDAGREED TO A CENSURE AND $100,000.00 FINE.Disclosure 44 of 92iReporting Source:RegulatorInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:04/10/2008Docket/Case Number:2005001714501Principal Product Type:OtherOther Product Type(s):THRESHOLD SSECURITIES, EQUITY SECURITIESAllegations:SEC RULES 203(B)(1) OF REGULATION SHO, SEC RULE 203(B)(3), NASDRULE 6130 - OPPENHEIMER & CO., INC. EXECUTED SHORT SALETRANSACTIONS AND FAILED TO REPORT THEM TO THE TRADEREPORTING FACILITY, FORMERLY THE NASDAQ MARKET CENTER, WITH ASHORT SALE MODIFIER. THE FIRM ACCEPTED SHORT SALE ORDERS INEQUITY SECURITIES FROM ANOTHER PERSON, OR EFFECTED A SHORTSALE IN EQUITY SECURITIES FOR ITS OWN ACCOUNT WITHOUTBORROWING THE SECURITY OR ENTERING INTO A BONA FIDEARRANGEMENT TO BORROW THE SECURITY; OR REASONABLE GROUNDSTO BELIEVE THAT THE SECURITY COULD BE BORROWED SO THAT ITCOULD BE DELIVERED ON THE DATE DELIVERY IS DUE; ANDDOCUMENTING COMPLIANCE WITH SEC RULE 203(B)(1) OF REGULATIONSHO. THE FIRM HAD FAIL TO DELIVER POSITIONS IN THRESHOLDSECURITIES AT A REGISTERED CLEARING AGENCY FOR 13 CONSECUTIVESETTLEMENT DAYS AND FAILED TO IMMEDIATELY THEREAFTER CLOSEOUT THE FAIL TO DELIVER POSITIONS BY PURCHASING SECURITIES OFLIKE KIND AND QUANTITY. THE FIRM CONTINUED TO HAVE FAIL TODELIVER POSITIONS, WHICH IT FAILED TO CLOSE OUT AS REQUIRED, INTHE SECURITIES AT THE REGISTERED CLEARING AGENCY FORCONSECUTIVE SETTLEMENT DAYS UNTIL A LATER DATE.Current Status:FinalResolution Date:04/10/2008Resolution:Acceptance, Waiver & Consent(AWC)138©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $25,000.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $25,000.00iReporting Source:FirmInitiated By:FINRADate Initiated:04/15/2008Docket/Case Number:20050017145-01Allegations:SEC RULES 203(B)(1) OF REGULATION SHO, SEC RULE 203(B)(3), NASDRULE 6130 - OPPENHEIMER & CO., INC. EXECUTED SHORT SALETRANSACTIONS AND FAILED TO REPORT THEM TO THE TRADEREPORTING FACILITY, FORMERLY THE NASDAQ MARKET CENTER, WITH ASHORT SALE MODIFIER. THE FIRM ACCEPTED SHORT SALE ORDERS INEQUITY SECURITIES FROM ANOTHER PERSON, OR EFFECTED A SHORTSALE IN EQUITY SECURITIES FOR ITS OWN ACCOUNT WITHOUTBORROWING THE SECURITY OR ENTERING INTO A BONA FIDEARRANGEMENT TO BORROW THE SECURITY; OR REASONABLE GROUNDSTO BELIEVE THAT THE SECURITY COULD BE BORROWED SO THAT ITCOULD BE DELIVERED ON THE DATE DELIVERY IS DUE; ANDDOCUMENTING COMPLIANCE WITH SEC RULE 203(B)(1) OF REGULATIONSHO. THE FIRM HAD FAIL TO DELIVER POSITIONS IN THRESHOLDSECURITIES AT A REGISTERED CLEARING AGENCY FOR 13 CONSECUTIVESETTLEMENT DAYS AND FAILED TO IMMEDIATELY THEREAFTER CLOSEOUT THE FAIL TO DELIVER POSITIONS BY PURCHASING SECURITIES OFLIKE KIND AND QUANTITY. THE FIRM CONTINUED TO HAVE FAIL TODELIVER POSITIONS, WHICH IT FAILED TO CLOSE OUT AS REQUIRED, INTHE SECURITIES AT THE REGISTERED CLEARING AGENCY FORCONSECUTIVE SETTLEMENT DAYS UNTIL A LATER DATE.Current Status:Final139©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:CensureOther Sanction(s)/ReliefSought:Principal Product Type:OtherOther Product Type(s):THRESHOLD SECURITIES,EQUITY SECURITIESResolution Date:04/15/2008Resolution:Other Sanctions Ordered:N/ASanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $25,000.00Sanctions Ordered:CensureMonetary/Fine $25,000.00ConsentDisclosure 45 of 92iReporting Source:RegulatorInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Date Initiated:01/16/2008Docket/Case Number:20060063726-01Principal Product Type:OtherOther Product Type(s):NASDAQ SECURITIESAllegations:SEC RULE 604 OF REGULATION NMS - OPPENHEIMER & CO. INC. FAILEDTO DISPLAY IMMEDIATELY CUSTOMER LIMIT ORDERS IN NASDAQSECURITIES IN ITS PUBLIC QUOTATION WHEN EACH SUCH ORDER WAS ATA PRICE THAT WOULD HAVE IMPROVED THE FIRM'S BID OR OFFER INEACH SUCH SECURITY; OR WHEN THE ORDER WAS PRICED EQUAL TOTHE FIRM'S BID OR OFFER AND THE NATIONAL BEST BID OR OFFER FOREACH SUCH SECURITY, AND THE SIZE OF THE ORDER REPRESENTEDMORE THAN A DE MINIMIS CHANGE IN RELATON TO THE SIZE ASSOCIATEDWITH THE FIRM'S BID OR OFFER IN EACH SUCH SECURITY.Current Status:Final140©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanction(s)/ReliefSought:Resolution Date:01/16/2008Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $7,500.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $7,500.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:CENSURE, FINE OF $7,500.00Date Initiated:01/16/2008Docket/Case Number:20060063726-01Principal Product Type:Equity - OTCOther Product Type(s):Allegations:FINRA ALLEGED THAT OPPENHEIMER FAILED TO IMMEDIATELY DISPLAY 97CUSTOMER LIMIT ORDERS WHEN SUCH AN ORDER WOULD IMPROVEOPPENHEIMER'S BID OR OFFER; OR WHEN THE ORDER WAS PRICEDEQUAL TO OPPENHIEMER'S BID OR OFFER AND NATIONAL BEST BID, INALLEGED VIOLATION OF SEC RULE 604 AND REG. NMS.Current Status:FinalResolution:Acceptance, Waiver & Consent(AWC)141©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceResolution Date:01/16/2008Other Sanctions Ordered:Sanction Details:THE FIRM IS CENSURED AND FINED $7500.00.Firm StatementWITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $7500.00.Sanctions Ordered:CensureMonetary/Fine $7,500.00Disclosure 46 of 92iReporting Source:RegulatorInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:12/21/2007Docket/Case Number:2007009509501Principal Product Type:Mutual Fund(s)Other Product Type(s):Allegations:SECTION 17(A) OF THE EXCHANGE ACT AND RULES 17A-3 AND 17A-4THEREUNDER; NASD RULES 2110, 3010(A) AND (B) AND 3110: FROMJANUARY 2, 2003 THROUGH EARLY SEPTEMBER 2003, CERTAINREGISTERED REPRESENTATIVES (THE "GROUP") AT THE FIRM ENGAGEDIN IMPROPER MARKET TIMING TRANSACTIONS ON BEHALF OF THEIRHEDGE FUND CLIENTS. THE TRADING INVOLVED 77 MUTUAL FUNDS ANDRESULTED IN APPROXIMATELY $9 MILLION IN GROSS REVENUE TO THEFIRM. THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO IMPROPER MARKET TIMING TRANSACTIONS. IN ADDITION,THE FIRMFAILED TO CREATE OR MAINTAIN RECORDS OF THE GROUP'S TRADINGTHROUGH THE CERTAIN PLATFORMS.Current Status:FinalResolution:Acceptance, Waiver & Consent(AWC)142©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceResolution Date:12/21/2007Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE THE FIRM IS CENSURED, FINED $250,000 AND THEFIRM MUST PAY $4,250,000, WITHIN 30 DAYS, TO COMPENSATE AFFECTEDMUTUAL FUNDS FOR LOSES BECAUSE OF THE AFOREMENTIONEDMARKET TIMING ACTIVITY. IN ADDITION, AN OFFICER OF THE FIRM MUSTCERTIFY TO FINRA THAT PAYMENTS TO THE AFFECTED MUTUAL FUNDSWITH COPIES OF THE CHECKS SENT TO THE MUTUAL FUNDS.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $250,000.00Disgorgement/RestitutioniReporting Source:FirmInitiated By:FINRAPrincipal Sanction(s)/ReliefCivil and Administrative Penalt(ies) /Fine(s)Date Initiated:12/21/2007Docket/Case Number:2007009509501Principal Product Type:Mutual Fund(s)Other Product Type(s):Allegations:SECTION 17(A) OF THE EXCHANGE ACT AND RULES 17A-3 AND 17A-4THEREUNDER; NASD RULES 2110,3010(A)AND(B)AND 3110: FROM JANUARY2, 2003 THROUGH EARLY SEPTEMBER 2003, CERTAIN REGISTEREDREPRESENTATIVES (THE "GROUP") AT THE FIRM ENGAGED IN IMPROPERMARKET TIMING TRANSACTIONS ON BEHALF OF THEIR HEDGE FUNDCLIENTS. THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO IMPROPER MARKET TIMING TRANSACTIONS. IN ADDITION,THE FIRM FAILED TO CREATE OR MAINTAIN RECORDS OF THE GROUP'STRADING THROUGH THE CERTAIN PLATFORMS.Current Status:Final143©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSought:Other Sanction(s)/ReliefSought:CENSURE, DISGORGEMENTAN OFFICER OF THE FIRM MUST CERTIFY TO FINRA THAT PAYMENTS TOAFFECTED MUTUAL FUNDS HAS BEEN MADE.Resolution Date:12/21/2007Resolution:Other Sanctions Ordered:AN OFFICER OF THE FIRM MUST CERTIFY TO FINRA THAT PAYMENTS TOAFFECTED MUTUAL FUNDS HAS BEEN MADE.Sanction Details:CENSURE, DISGORGEMENT AND $250,000.00 FINE PAID.Firm StatementWITHOUT ADMITTING OR DENYING THE ALLEGATIONS THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS.Sanctions Ordered:CensureMonetary/Fine $250,000.00Disgorgement/RestitutionAcceptance, Waiver & Consent(AWC)Disclosure 47 of 92iReporting Source:RegulatorInitiated By:FINRAPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:10/16/2007Docket/Case Number:2006005906201Principal Product Type:OtherOther Product Type(s):UNSPECIFIED TYPE OF SECURITIESAllegations:NASD RULES 2110 AND 2320: DURING THE PERIOD FROM OCTOBER 1, 2005THROUGH DECEMBER 31, 2005, IN SEVEN CUSTOMER TRANSACTIONS,THE FIRM FAILED TO USE REASONABLE DILIGENCE TO ASCERTAIN THEBEST INTER-DEALER MARKET AND FAILED TO BUY OR SELL IN SUCHMARKET SO THAT THE RESULTANT PRICE TO ITS CUSTOMER WAS ASFAVORABLE AS POSSIBLE UNDER PREVAILING MARKET CONDITIONS.Current Status:Final144©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceResolution Date:10/16/2007Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE THE FIRM IS CENSURED, FINED $15,000 AND REQUIRED TOPAY $6,852.51 IN RESTITUTION TO CUSTOMERS. IN ADDITION, AREGISTERED PRINCIPAL OF THE FIRM MUST SUBMIT SATISFACTORYPROOF OF PAYMENT OF RESTITUTION, OR OF REASONABLE ANDDOCUMENTED EFFORTS UNDERTAKEN TO EFFECT RESTITUTION TOFINRA NO LATER THAN 120 DAYS AFTER ACCEPTANCE OF THIS AWC. IFFOR ANY REASON THE FIRM CANNOT LOCATE ANY RECIPIENT AFTERREASONABLE AND DOCUMENTED EFFORTS WITHIN SUCH PERIOD, ORSUCH ADDITIONAL PERIOD AGREED TO BY FINRA, THE FIRM SHALLFORWARD ANY UNDISTRIBUTED RESTITUTION AND INTEREST TO THEAPPROPRIATE ESCHEAT, UNCLAIMED PROPERTY, OR ABANDONED-PROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER LASTRESIDED.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $15,000.00Disgorgement/RestitutionAcceptance, Waiver & Consent(AWC)iReporting Source:FirmInitiated By:FINRADate Initiated:10/16/2007Docket/Case Number:2006005906201Allegations:NASD RULES 2110 AND 2320: DURING THE PERIOD FROM OCTOBER 1, 2005THROUGH DECEMBER 31, 2005, IN SEVEN CUSTOMER TRANSACTIONS,THE FIRM FAILED TO USE REASONABLE DILIGENCE TO ASCERTAIN THEBEST INTER-DEALER MARKET AND FAILED TO BUY OR SELL IN SUCHMARKET SO THAT THE RESULTANT PRICE TO ITS CUSTOMER WAS ASFAVORABLE AS POSSIBLE UNDER PREVAILING MARKET CONDITIONS.Current Status:Final145©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:CensureOther Sanction(s)/ReliefSought:DISGORGEMENT/RESTITUTIONFINEPrincipal Product Type:OtherOther Product Type(s):UNSPECIFIEDResolution Date:10/16/2007Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE THE FIRM IS CENSURED, FINED $15,000 AND REQUIRED TOPAY $6,852.51 IN RESTITUTION TO CUSTOMERS.Sanctions Ordered:CensureMonetary/Fine $15,000.00Disgorgement/RestitutionAcceptance, Waiver & Consent(AWC)Disclosure 48 of 92iReporting Source:RegulatorInitiated By:FLORIDAPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Date Initiated:08/27/2007Docket/Case Number:0335-S-4/07URL for Regulatory Action:Principal Product Type:No ProductOther Product Type(s):Allegations:OPPENHEIMER & CO. FAILED TO REGISTER THREE (3) BRANCH OFFICELOCATIONS AS REQUIRED BY CHAPTER 517, F.S., PRIOR TO ALLOWINGTHE LOCATIONS TO EFFECT SECURITIES TRANSACTIONS.Current Status:Final146©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceResolution Date:08/27/2007Resolution:Other Sanctions Ordered:Sanction Details:FINE WAS PAID AT TIME OF SETTLEMENTDoes the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?YesSanctions Ordered:Monetary/Fine $15,000.00Cease and Desist/InjunctionStipulation and ConsentiReporting Source:FirmInitiated By:FLORIDAPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Date Initiated:08/27/2007Docket/Case Number:0335-S-4/07Principal Product Type:No ProductOther Product Type(s):Allegations:FIRM FAILED TO REGISTER THREE (3) BRANCH OFFICE LOCATIONS ASREQUIRED BY CHAPTER 517, F.S., PRIOR TO ALLOWING THE LOCATIONSTO EFFECT SECURITIES TRANSACTIONS.Current Status:FinalResolution Date:08/27/2007Resolution:Other Sanctions Ordered:Sanction Details:FINE WAS PAID AT TIME OF SETTLEMENTSanctions Ordered:Monetary/Fine $15,000.00Cease and Desist/InjunctionStipulation and Consent147©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceFirm StatementTHE OFFICE OF FINANCIAL REGULATION, STATE OF FLORIDA ANDOPPENHEIMER ENTERED INTO A STIPULATION AND CONSENTAGREEMENT (ADMINISTRATIVE PROCEEDING NO. 0335-S-4/07) EXECUTEDBY OPPENHEIMER ON AUGUST 14, 2007 AND ACCEPTED BY THE OFFICEOF FINANCIAL REGULATION ON OR ABOUT AUGUST 27, 2007, IN WHICHOPPENHEIMER CONSENTED TO THE ENTRY OF A FINDING THATOPPENHEIMER CONDUCTED SECURITIES TRANSACTIONS IN CERTAINLOCATIONS WITHOUT BEING PROPERLY REGISTERED IN VIOLATION OFSECTION 517.12(5), FLORIDA STATUTES, AND RULE 69W 200.001(9)(A)3,FLORIDA ADMINISTRATIVE CODE. OPPENHEIMER PAID A $15,000.00 FINE,AND AGREED TO CEASE AND DESIST FROM SUCH FUTURE VIOLATIONS.Disclosure 49 of 92iReporting Source:RegulatorAllegations:SEC RULES 10B-10, 15C2-11, 17A-3, 17A-4, 200(G), NASD RULES 2110, 3010,6740, - OPPENHEIMER & CO., INC. EXECUTED LONG SALE ORDERS ANDMARKED THE ORDERS AS SHORT SALES; FAILED TO DISCLOSE AVERAGEPRICE AND THE CORRECT REPORTED PRICE ON CUSTOMERCONFIRMATIONS; INCORRECTLY DISCLOSED AVERAGE PRICE ONCUSTOMER CONFIRMATIONS; FAILED TO ENTER, OR ENTEREDINCORRECT, INFORMATION ON BROKERAGE ORDER MEMORANDA; FAILEDTO PRESERVE FOR A PERIOD OF NOT LESS THAN THREE YEARS, THEFIRST TWO IN AN ACCESSIBLE PLACE, THE MEMORANDA OF BROKERAGEORDERS; THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO APPLICABLE SECURITIES LAWS, REGULATIONS AND NASDRULES RELATING TO TRADE REPORTING, COMPLIANCE WITH SEC RULE15C2-11 AND NASD RULE 6740, AND OATS. THE FIRM PUBLISHEDQUOTATIONS IN OTC EQUITY SECURITIES, OR DIRECTLY OR INDIRECTLY,SUBMITTED SUCH QUOTATIONS FOR PUBLICATION, IN A QUOTATIONMEDIUM, THE PINK SHEETS, AND DID NOT HAVE IN ITS RECORDS THEDOCUMENTATION REQUIRED BY SEC RULE 15C2-11(A) ("PARAGRAPH (A)INFORMATION"), DID NOT HAVE A REASONABLE BASIS UNDER THECIRCUMSTANCES FOR BELIEVING THAT THE PARAGRAPH (A)INFORMATION WAS ACCURATE IN ALL RESPECTS OR DID NOT HAVE AREASONABLE BASIS UNDER THE CIRCUMSTANCES FOR BELIEVING THATTHE SOURCES OF THE PARAGRAPH (A) WERE RELIABLE; THEQUOTATIONS DID NOT REPRESENT A CUSTOMER'S INDICATION OFUNSOLICITED INTEREST. FOR EACH QUOTATION, THE FIRM FAILED TO FILEA FORM 211 WITH NASD AT LEAST THREE BUSINESS DAYS BEFORE THEFIRM'S QUOTATIONS WERE PUBLISHED OR DISPLAYED IN A QUOTATIONMEDIUM.Current Status:Final148©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:NASDPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:11/03/2006Docket/Case Number:2005001790701Principal Product Type:Equity - OTCOther Product Type(s):Resolution Date:11/03/2006Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $27,500.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $27,500.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmAllegations:SEC RULES 10B-10, 15C2-11, 17A-3, 17A-4, 200(G), NASD RULES 2110, 3010,6740, - OPPENHEIMER & CO., INC. EXECUTED LONG SALE ORDERS ANDMARKED THE ORDERS AS SHORT SALES; FAILED TO DISCLOSE AVERAGEPRICE AND THE CORRECT REPORTED PRICE ON CUSTOMERCONFIRMATIONS; INCORRECTLY DISCLOSED AVERAGE PRICE ONCUSTOMER CONFIRMATIONS; FAILED TO ENTER, OR ENTEREDINCORRECT, INFORMATION ON BROKERAGE ORDER MEMORANDA; FAILEDTO PRESERVE FOR A PERIOD OF NOT LESS THAN THREE YEARS, THEFIRST TWO IN AN ACCESSIBLE PLACE, THE MEMORANDA OF BROKERAGEORDERS; THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORCurrent Status:Final149©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:NASDPrincipal Sanction(s)/ReliefSought:CensureOther Sanction(s)/ReliefSought:Date Initiated:11/03/2006Docket/Case Number:20050017907-01Principal Product Type:Equity - OTCOther Product Type(s):SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO APPLICABLE SECURITIES LAWS, REGULATIONS AND NASDRULES RELATING TO TRADE REPORTING, COMPLIANCE WITH SEC RULE15C2-11 AND NASD RULE 6740, AND OATS. THE FIRM PUBLISHEDQUOTATIONS IN OTC EQUITY SECURITIES, OR DIRECTLY OR INDIRECTLY,SUBMITTED SUCH QUOTATIONS FOR PUBLICATION, IN A QUOTATIONMEDIUM, THE PINK SHEETS, AND DID NOT HAVE IN ITS RECORDS THEDOCUMENTATION REQUIRED BY SEC RULE 15C2-11(A) ("PARAGRAPH (A)INFORMATION"), DID NOT HAVE A REASONABLE BASIS UNDER THECIRCUMSTANCES FOR BELIEVING THAT THE PARAGRAPH (A)INFORMATION WAS ACCURATE IN ALL RESPECTS OR DID NOT HAVE AREASONABLE BASIS UNDER THE CIRCUMSTANCES FOR BELIEVING THATTHE SOURCES OF THE PARAGRAPH (A) WERE RELIABLE; THEQUOTATIONS DID NOT REPRESENT A CUSTOMER'S INDICATION OFUNSOLICITED INTEREST. FOR EACH QUOTATION, THE FIRM FAILED TO FILEA FORM 211 WITH NASD AT LEAST THREE BUSINESS DAYS BEFORE THEFIRM'S QUOTATIONS WERE PUBLISHED OR DISPLAYED IN A QUOTATIONMEDIUM.Resolution Date:11/03/2006Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, OPPENHEIMER &CO. AGREED TO PAY A FINE OF $27500.00, PAYABLE ON A DATEDETERMINED BY THE NASD.Sanctions Ordered:CensureMonetary/Fine $27,500.00Acceptance, Waiver & Consent(AWC)Disclosure 50 of 92i150©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceReporting Source:RegulatorInitiated By:MASSACHUSETTSPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:DISGORGEMENT; REVOCATION OF STEPHEN J. TOUSSAINT'SREGISTRATION; CEASE & DESIST; CENSURE; COMPENSATION TOINVESTORS FOR LOSSES ATTRIBUTABLE TO ALLEGED WRONGDOING;TAKE FURTHER ACTIONS AS MAY BE DEEMED JUST & APPROPRIATEDate Initiated:08/02/2006Docket/Case Number:E-2005-0195URL for Regulatory Action:Principal Product Type:OtherOther Product Type(s):Allegations:OPPENHEIMER ENGAGED IN DISHONEST AND UNETHICAL CONDUCT ANDFAILED TO PROVIDE REASONABLE SUPERVISION OF REP. STEPHEN J.TOUSSAINT TO PREVENT/DETECT/PROHIBIT TOUSSAINT'S UNLAWFULACTIVITIES (THEFT, CHURNING, UNAUTHORIZED TRADING RELATIVE TO ANELDERLY COUPLE'S ACCOUNTCurrent Status:FinalResolution Date:07/09/2007Resolution:Other Sanctions Ordered:FINE OF $1 MILLION; CENSURE; C&D; RETENTION OF/COOPERATION WITHINDEPENDENT CONSULTANT AND ADOPTION OF CONSULTANT'SRECOMMENDATIONS; $135,407 PAYMENT OF LOSSES, INTEREST ANDEXPENSES FROM CONDUCT TO INVESTORSanction Details:INDEPENDENT CONSULTANT MUST REVIEW BRANCH OFFICE POLICIES RE:CUSTOMER COMPLAINTS, MONITORING OF CUSTOMER ACCOUNTS FORDoes the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $1,000,000.00Disgorgement/RestitutionCease and Desist/InjunctionConsent151©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceCHURNING/UNAUTHORIZED TRADING/MISAPPROPRIATION/ SUITABILITYOF COMMISSION VS. FEE-BASED ACCOUNTS/HANDLING OF ORDERTICKETS MARKED "UNSOLICITED"; OPPENHEIMER SHALL NOT SEEKREIMBURSEMENT OR TAX DEDUCTION FOR ANY AMOUNT PAID PURSUANTTO THE ORDERiReporting Source:FirmInitiated By:MASSACHUSETTS SECURITIES DIVISION ("MSD")Principal Sanction(s)/ReliefSought:CensureOther Sanction(s)/ReliefSought:DISGORGEMENT, CEASE AND DESISTUNDERTAKINGDate Initiated:08/02/2006Docket/Case Number:E-2005-0195 & E-2006-0071Principal Product Type:Equity Listed (Common & Preferred Stock)Other Product Type(s):Allegations:THE MASSACHUSETTS DIVISION OF SECURITIES ALLEGED THATOPPENHEIMER ENGAGED IN DISHONEST AND UNETHICAL CONDUCT, ANDFAILED TO SUPERVISE A FORMER REGISTERED REPRESENTATIVE OF THEFIRM.Current Status:FinalResolution Date:07/09/2007Resolution:Other Sanctions Ordered:UNDERTAKING, RETENTION OF INDEPENDENT CONSULTANT ANDADOPTION WITH CONSULTANTS RECOMMENDATION.Sanction Details:CENSURE AND FINE OF $1,000,000; PAYMENT TO INVESTOR OF $135,407FOR LOSSES,INTEREST AND EXPENSES.Firm StatementON JULY 9, 2007 THE MASSACHUSETTS SECURITIES DIVISION ("MSD")ENTERED A CONSENT ORDER AND ACCEPTED OPPENHEIMER & CO. INC.'S("OPPENHEIMER'S") OFFER OF SETTLEMENT IN "THE MATTER OFOPPENHEIMER AND STEVEN J. TOUSSAINT," DOCKET NUMBERS "E-2005-0195 AND E-2006-0071," RESULTING FROM AN ADMINISTRATIVE COMPLAINTSanctions Ordered:CensureMonetary/Fine $1,000,000.00Disgorgement/RestitutionCease and Desist/InjunctionConsent152©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePREVIOUSLY FILED AGAINST OPPENHEIMER, AND RELATED INQUIRYCONCERNING OPPENHEIMER'S E-MAIL SYSTEM. THE ("MSD") ALLEGEDTHAT CO-RESPONDENT AND FORMER OPPENHEIMER REGISTEREDREPRESENTATIVE STEVEN TOUSSAINT CHURNED CERTAIN RELATEDACCOUNTS AND CONVERTED FUNDS FROM A CLIENT. FUTHER, THE("MSD") ALLEGED THAT OPPENHEIMER FAILED TO ADEQUATELYSUPERVISE CO-RESPONDENT TOUSSAINT; FAILED TO CONDUCT ANADEQUATE INVESTIGATION REGARDING TOUSSAINT'S CONVERSION OFFUNDS; CAUSED TO BE MADE STATEMENTS THAT AT THE TIME UNDER THECIRCUMSTANCES WERE FALSE AND MISLEADING REGARDINGOPPENHEIMER'S PRODUCTION OF E-MAILS AND RELATED E-MAILRETENTION ISSUES; AND THAT OPPENHEIMER FAILED TO HAVE AREASONABLE SUPERVISORY SYSTEM WITH RESPECT TO PRODUCTIONOF E-MAILS IN RESPONSE TO REGULATORY REQUESTS FORINFORMATION. OPPENHEIMER AGREED TO PAY AN ADMINISTRATIVE FINEOF $1 MILLION AND TO REIMBURSE THE CLIENT AN ADDITIONAL $135,407,AND TO RETAIN AN INDEPENDENT CONSULTANT TO REVIEWOPPENHEIMER'S MASSACHUSETTS BRANCH OFFICE POLICES ANDPROCEDURES.Disclosure 51 of 92iReporting Source:RegulatorInitiated By:NASDPrincipal Sanction(s)/ReliefSought:Date Initiated:06/30/2006Docket/Case Number:2005000235601Principal Product Type:OtherOther Product Type(s):STOCKSAllegations:NASD RULES 2110, 3010, 5220(E) - OPPENHEIMER & CO., INC., AS ANINTERMARKET TRADING SYSTEM/COMPUTER ASSISTED EXECUTIONSYSTEM (ITS/CAES) MARKET MAKER, FAILED TO MAINTAIN CONTINUOUSTWO-SIDED QUOTOATIONS IN THE ABSENCE OF THE GRANT OF ANEXCUSED WITHDRAWAL OR A FUNCTIONAL EXCUSED WITHDRAWAL BYNASD; AND THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO APPLICABLE SECURITIES LAWS, REGULATIONS AND NASDRULES CONCERNING MAINTAINING TWO-SIDED QUOTATIONS AS ANITS/CAES MARKET MAKER.Current Status:Final153©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanction(s)/ReliefSought:Resolution Date:06/30/2006Resolution:Other Sanctions Ordered:UNDERTAKINGSanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $17,500, AND REQUIRED TOREVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TOMAINTAINING TWO-SIDED QUOTATIONS AS AN ITS/CAES MARKET MAKERWITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY THE NAC.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $17,500.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmInitiated By:NASDDate Initiated:06/30/2006Docket/Case Number:20050002356-01Principal Product Type:OtherAllegations:NASD RULES 2110,3010,5220(E) - OPPENHEIMER & CO., INC. AS ANINTERMARKET TRADING SYSTEM/COMPUTER ASSISTED EXECUTIONSYSTEM (ITS/CAES) MARKET MAKER, FAILED TO MAINTAIN CONTINUOUSTWO-SIDED QUOTATIONS IN THE ABSENCE OF THE GRANT OF ANEXCUSED WITHDRAWAL OR A FUNCTIONAL EXCUSED WITHDRAWAL BYNASD; AND THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO APPLICABLE SECURITIES LAWS, REGULATIONS AND NASDRULES CONCERNING MAINTAINING TWO-SIDED QUOTATIONS AS ANITS/CAES MARKET MAKER.Current Status:Final154©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:CensureOther Sanction(s)/ReliefSought:Other Product Type(s):STOCKSResolution Date:06/30/2006Resolution:Other Sanctions Ordered:UNDERTAKINGSanction Details:WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $17,500 AND REQUIRED TOREVISE ITS WRITTEN SUPERVISORY PROCEDURES WITH RESPECT TOMAINTAINING TWO-SIDED QUOTATIONS AS AN ITS/CAES MARKET MAKERWITHIN 30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY THE NAC.Sanctions Ordered:CensureMonetary/Fine $17,500.00Acceptance, Waiver & Consent(AWC)Disclosure 52 of 92iReporting Source:FirmInitiated By:NEW YORK STOCK EXCHANGEPrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:PENDING INVESTIGATIONDate Initiated:06/05/2006Docket/Case Number:N/APrincipal Product Type:Annuity(ies) - VariableOther Product Type(s):MUTUAL FUNDSAllegations:NEW YORK STOCK EXCHANGE HAS INVITED FIRM TO MAKE A "WELLS"SUBMISSION IN CONNECTION WITH NEW YORK STOCK EXCHANGES'SINVESTIGATION INTO FIRM'S ALLEGED FAILURES RELATING TO MARKETTIMING ACTIVITIES OF MICHAEL SASSANO AND INDIVIDUALS ASSISTINGHIM IN THOSE ACTIVITIES.Current Status:Final155©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceResolution Date:12/21/2007Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE THE FIRM IS CENSURED, FINED $250,000 AND THEFIRM MUST PAY $4,250,000, WITHIN 30 DAYS, TO COMPENSATE AFFECTEDMUTUAL FUNDS FOR LOSES BECAUSE OF THE AFOREMENTIONEDMARKET TIMING ACTIVITY. IN ADDITION, AN OFFICER OF THE FIRM MUSTCERTIFY TO FINRA THAT PAYMENTS TO THE AFFECTED MUTUAL FUNDSWITH COPIES OF THE CHECKS SENT TO THE MUTUAL FUNDS.Firm StatementON JUNE 5, 2006, NEW YORK STOCK EXCHANGE INVITED FIRM TO MAKE "WELLS" SUBMISSION. NO FORMAL CHARGES HAVE BEEN FILED AGAINSTTHE FIRM AT THIS TIME.Sanctions Ordered:CensureMonetary/Fine $250,000.00Disgorgement/RestitutionAcceptance, Waiver & Consent(AWC)Disclosure 53 of 92iReporting Source:RegulatorInitiated By:NASDPrincipal Sanction(s)/ReliefSought:Date Initiated:02/03/2006Docket/Case Number:E102003017701Principal Product Type:Debt - MunicipalOther Product Type(s):Allegations:MSRB RULES G-36 (B)(I), G-37(E)(I)(B), G-38(B)(IV) AND (D) THE FIRMFAILED TO FILE IN A TIMELY MANNER, A MSRB FORM G-36 AND AN OFFICIALSTATEMENT FOR THREE UNDERWRITINGS. THE FIRM ALSO FILED AN INACCURATE MSRB FORM G-37 AND FAILED TO SUBMIT IN WRITING TOISSUERS WITH WHICH IT WAS SEEKING MUNICIPAL SECURITIESBUSINESS, INFORMATION ON CONSULTING ARRANGEMENTS WITH EACHISSUER, AND IN APPARENT VIOLATION OF MASB RULES G-38(D), FAILED TODISCLOSE REQUIRED INFORMATION REGARDING CONSULTANTS TOISSUERS.Current Status:Final156©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanction(s)/ReliefSought:Resolution Date:02/03/2006Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE IT IS CENSURED AND FINED $20,000.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $20,000.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmInitiated By:NASDPrincipal Sanction(s)/ReliefSought:Date Initiated:02/03/2006Docket/Case Number:E102003017701Principal Product Type:Debt - MunicipalOther Product Type(s):Allegations:THE FIRM WAS ALLEGED TO HAVE A) FAILED TO FILE MSRB FORM G-36AND AN OFFICIAL STATEMENT FOR THREE (3) UNDERWRITINGS IN ATIMELY MANNER AND B) ALLEGED TO HAVE FILED AN INACCURATE MSRBFORM G-37. THE FIRM WAS ALSO ALLEGED TO HAVE FAILED TO PROVIDEINFORMATION ON CONSULTING AGREEMENTS WITH ISSUERS WITH WHICHIT WAS SEEKING MUNICIPAL SECURITIES BUSINESS AND OF FAILING TODISCLOSE INFORMATION REGARDING CONSULTANTS TO ISSUERS. THEFIRM NEITHER ADMITS OR DENIES THE ACCUSATIONS AND CONSENTEDTO A CENSURE AND A $20,000.00 FINE.Current Status:Final157©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanction(s)/ReliefSought:Resolution Date:02/03/2006Resolution:Other Sanctions Ordered:CENSURE AND FINE OF $20,000.00 PAID.Sanction Details:WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE IT IS CENSURED AND FINED $20,000.00Sanctions Ordered:CensureMonetary/Fine $20,000.00Acceptance, Waiver & Consent(AWC)Disclosure 54 of 92iReporting Source:RegulatorAllegations:**12/29/05**DECISION 05-190 ISSUED BY NYSE HEARING PANELVIOLATED EXCHANGE RULE 342, IN THAT THE FIRM FAILED TO SUPERVISEAND CONTROL AND PROVIDE FOR APPROPRIATE PROCEDURES OFSUPERVISION AND CONTROL OVER VARIOUS BUSINESS ACTIVITIES, ANDFAILED TO ESTABLISH A SEPARATE SYSTEM OF FOLLOW-UP AND REVIEWTO DETERMINE THAT ANY AUTHORITY AND RESPONSIBILITY DELEGATEDPURSUANT TO THE RULE WAS BEING PROPERLY EXERCISED; VIOLATEDEXCHANGE RULE 401, IN THAT THE FIRM DID NOT ADHERE AT ALL TIMESTO THE PRINCIPLES OF GOOD BUSINESS PRACTICE, INCLUDING, BUT NOTLIMITED TO, THE FOLLOWING: BY FAILING ON ONE OR MORE OCCASIONSTO NOTIFY THE EXCHANGE IMMEDIATELY UPON DISCOVERY OF ANYEXISTING OR IMPENDING CONDITION WHICH IT REASONABLY SHOULDHAVE BELIEVED COULD LEAD TO (I) CAPITAL PROBLEMS;II) OPERATIONALPROBLEMS; (III) IMPAIRMENT OF RECORDKEEPING; AND/OR (IV)IMPAIRMENT OF CONTROL FUNCTIONS;BY ISSUING INACCURATEMONTHLY ACCOUNT STATEMENTS TO CUSTOMERS; BY FAILING TOCONDUCT A NECESSARY DAILY RECONCILIATION OF A BANKCONCENTRATION ACCOUNT AND BY FAILING TO TIMELY RECONCILEOTHER BANK ACCOUNTS; BY FAILING TO HAVE ADEQUATE PROCEDURESIN PLACE TO MONITOR ACTIVITY IN SUSPENSE ACCOUNTS ANDACCOUNTS EFFECTIVELY FUNCTIONING AS SUCH; BY FAILING TO AGEITEMS IN SUCH ACCOUNTS AND DETERMINE THEY WERE BEINGRECONCILED; AND BY TRANSFERRING GENERAL LEDGER MONEYSUSPENSE ACCOUNT OUT-OF-BALANCE AMOUNTS INTO AN UNRELATEDSTOCK RECORD POSITION SUSPENSE ACCOUNT; BY NOT MAINTAININGADEQUATE SAFEGUARDS AND CONTROLS OVER MANUAL SECURITYCurrent Status:Final158©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:NEW YORK STOCK EXCHANGE DIVISION OF ENFORCEMENTPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:12/14/2005Docket/Case Number:HPD#: 05-190Principal Product Type:OtherOther Product Type(s):PRICE CHANGES; VIOLATED EXCHANGE RULE 416 AND EXCHANGE RULE476 (A) (10), IN THAT THE FIRM FILED KEY INDICATOR OPERATIONALREPORTS WITH THE EXCHANGE THAT MISSTATED AND/OR OMITTEDINFORMATION; VIOLATED SECTION 17(A) OF THE SECURITIES EXCHANGEACT OF 1934 AND RULE 17A-11 (D)AND (G) THEREUNDER, AND EXCHANGERULE 351(A), **CONTINUED AT #13C**Resolution Date:02/03/2006Resolution:Other Sanctions Ordered:Sanction Details:**CONTINUED FROM #7**IN THAT THE FIRM FAILED TO TIMELY GIVEREQUIRED NOTICE TO THE SEC AND TO THE EXCHANGE THAT IT DID NOTMAKE OR KEEP CURRENT CERTAIN REQUIRED BOOKS AND RECORDS;VIOLATED SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934AND RULE 17A-3 THEREUNDER, EXCHANGE RULE 440 AND EXCHANGERULE 409, IN THAT THE FIRM FAILED TO MAKE AND/OR KEEP CURRENTCERTAIN BOOKS AND RECORDS, INCLUDING RECORDS PERTAINING TOCUSTOMER ACCOUNT STATEMENTS, SUSPENSE ACCOUNTS, AND BANKRECONCILIATIONS; VIOLATED SECTION 17(A) OF THE SECURITIESEXCHANGE ACT OF 1934 AND RULE 17A-13(B)(5) THEREUNDER, ANDEXCHANGE RULE 440.10(3), IN THAT THE FIRM DID NOT TIMELY RECORDINTO A SECURITY DIFFERENCE ACCOUNT ALL UNRESOLVED SECURITYCOUNT DIFFERENCES; VIOLATED SECTION 15(C) OF THE SECURITIESEXCHANGE ACT OF 1934 AND RULE 15C3-1 THEREUNDER, RULE 15C3-3(E)THEREUNDER, AND EXCHANGE RULE 326, IN THAT THE FIRM AT CERTAINTIMES: DID NOT PREPARE ACCURATE COMPUTATIONS OF NET CAPITALAND DID NOT PREPARE ACCURATE RESERVE FORMULA COMPUTATIONS;VIOLATED SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934Sanctions Ordered:CensureMonetary/Fine $1,350,000.00Decision159©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceAND RULE 17A-5 THEREUNDER, AND EXCHANGE RULE 476(A)(10), IN THATTHE FIRM FILED ONE OR MORE INACCURATE FOCUS REPORTS WITH THEEXCHANGE; VIOLATED EXCHANGE RULE 476(A)(6) BY ENGAGING INCONDUCT INCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OFTRADE: AND SECTION 15(C) OF THE SECURITIES EXCHANGE ACT OF 1934AND RULE 15C2-8(B) THEREUNDER, **CONTINUED AT #14**Regulator Statement**CONTINUED FROM 13C** BY FAILING TO ENSURE THE DELIVERY OF ALLPRELIMINARY PROSPECTUSES IN CONNECTION WITH CERTAIN SALES OFREGISTERED SECURITIES; BY FAILING TO ENSURE IN CONNECTION WITHA PRIVATE PLACEMENT OFFERING THAT THERE WAS NO GENERALSOLICITATION OF THE INVESTMENT BEING OFFERED, IN VIOLATION OFSECTION 4(2) AND SECTION 5 OF THE SECURITIES ACT OF 1933; IN THATTHE FIRM CHARGED CERTAIN CUSTOMER ACCOUNTS FEES THAT WEREHIGHER THAN THE COMMISSIONS WOULD HAVE BEEN IN LIGHT OF THELIMITED OR ZERO TRADING ACTIVITY IN THE ACCOUNTS; IN THAT THEFIRM FAILED TO DISCLOSE TO CUSTOMERS THAT IT HAD ENTERED INTOREVENUE SHARING ARRANGEMENTS WITH CERTAIN MUTUAL FUNDCOMPANIES WHOSE MUTUAL FUNDS WERE MADE AVAILABLE FORPURCHASE THROUGH THE FIRM; VIOLATED EXCHANGE RULE 412, IN THATIN CONNECTION WITH CUSTOMER ACCOUNT TRANSFERS, THE FIRM DIDNOT TIMELY TRANSFER TO THE RECEIVING BROKER-DEALER RESIDUALCREDIT BALANCES THAT HAD ACCRUED TO THE TRANSFERREDCUSTOMER ACCOUNTS CONSENT TO CENSURE AND A FINE OF $1.35MILLION.**2/3/06**THE DECISION IS NOW FINAL AND EFFECTIVEIMMEDIATELY.CONTACT:PEGGY GERMINO 212-656-8450iReporting Source:FirmAllegations:NYSE ALLEGED VARIOUS SALES PRACTICE AND OPERATIONALDEFICIENCIES ARISING OUT OF EXAMINATIONS BY THE NYSE CONDUCTEDDURING 2002,2003,2004 AND 2005. ALLEGATIONS INCLUDE, BUT WERE NOTLIMITED TO, FAILURE TO MONITOR FLOOR ACTIVITIES, INADEQUACIESRELATING TO MANUAL PRICE CHANGES OF SECURITIES AND ELECTRONICAND OTHER COMMUNICATIONS, FAILURE TO TIMELY TRANSFERCUSTOMER ASSETS TO OTHER BROKER-DEALERS, DEFICIENCIESREGARDING SOLICITATION OF A PRIVATE PLACEMENT OF SECURITIES,LACK OF DISCLOSURE OF REVENUE SHARING PAYOUTS, INADEQUATERECONCILIATION OF BOOKS AND RECORDS AND ACCOUNTS, INACCURATECAPITAL COMPUTATIONS, FAILURE TO MONITOR CLIENT ACTIVITY LEVELSIN NON-MANAGED FEE BASED ACCOUNTS, LACK OF EVIDENCE OFDELIVERY OF PRELIMINARY PROSPECTUSES, VARIOUS OTHERCurrent Status:Final160©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:NEW YORK STOCK EXCHANGEPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:CENSUREDate Initiated:12/29/2005Docket/Case Number:HPD# 05-190Principal Product Type:No ProductOther Product Type(s):DEFICIENCIES AND FAILURE TO MAKE TIMELY NOTIFICATION TO THEEXCHANGE ABOUT CERTAIN SIGNIFICANT PROBLEMS THAT AROSE AFTERA CONVERSION IN MAY 2003. FIRM NEITHER ADMITTED OR DENIEDALLEGATIONS.Resolution Date:12/29/2005Resolution:Other Sanctions Ordered:Sanction Details:FIRM CONSENTED AND PAID $1.35 MILLION FINE.Firm StatementALLEGATIONS COVER SALES PRACTICE AND OPERATIONAL REVIEWS IN2002, 2003, 2004 AND 2005. WITHOUT ADMITTING OR DENYING GUILT, FIRMCONSENTED AND PAID $1.35 MILLION FINE.Sanctions Ordered:CensureMonetary/Fine $1,350,000.00Stipulation and ConsentDisclosure 55 of 92iReporting Source:RegulatorInitiated By:NASDDate Initiated:01/09/2006Docket/Case Number:EAF0400720002Allegations:NASD CONDUCT RULES 2110 AND 3010; RESPONDENT FAILED TO FILEAMENDMENTS TO FORMS U4 AND U5, AND INITIAL FORMS U5 IN A TIMELYMATTER; IT'S SUPERVISORY SYSTEM AND PROCEDURES WERE NOTREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH ARTICLE VREPORTING OBLIGATIONS.Current Status:Final161©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Principal Product Type:No ProductOther Product Type(s):Resolution Date:01/09/2006Resolution:Other Sanctions Ordered:UNDERTAKINGS: REQUIRED AUDITS AND OFFICER CERTIFICATONSRELATING TO ARTICLE V REPORTING OBLIGATIONS, REQUIRED OFFICERCERTIFICATION RELATING TO SYSTEM AND PROCEDURESSanction Details:WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENTMEMBER FIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THEENTRY OF FINDINGS; THEREFORE, THE FIRM IS CENSURED AND FINED$250,000.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $250,000.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmInitiated By:NASDDate Initiated:01/09/2006Docket/Case Number:EAF0400720002Principal Product Type:No ProductOther Product Type(s):Allegations:RESPONDENT FAILED TO FILE AMENDMENTS TO FORMS U4 AND U5, ANDINITIAL FORM U5S, IN A TIMELY MANNER.Current Status:Final162©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:CensureOther Sanction(s)/ReliefSought:UNDERTAKINGResolution Date:01/09/2006Resolution:Other Sanctions Ordered:REQUIRED AUDITS AND OFFICER CERTIFICATIONS RELATING TO ARTICLEV REPORTING OBLIGATIONS; REQUIRED OFFICER CERTIFICATIONRELATING TO SYSTEM AND PROCEDURESSanction Details:CENSURED, FINE $250.00 PAIDSanctions Ordered:CensureMonetary/Fine $250,000.00Acceptance, Waiver & Consent(AWC)Disclosure 56 of 92iReporting Source:RegulatorInitiated By:NASD (N/K/A FINRA)Date Initiated:01/09/2006Docket/Case Number:2005000316701Principal Product Type:Mutual Fund(s)Allegations:NASD RULES 2110, 3010(A) AND 8210: ON JUNE 11, 2003, AND ONNOVEMBER 20, 2003, OPPENHEIMER & CO. INC. ("OPPENHEIMER" OR "FIRM") SUBMITTED INACCURATE AND INCOMPLETE DATA IN RESPONSETO NASD'S REQUEST THAT THE FIRM PERFORM A SELF-ASSESSMENT OFITS MUTUAL FUND BREAKPOINT DISCOUNT PRACTICES. OPPENHEIMERKNOWINGLY, OR AT A MINIMUM, RECKLESSLY, SUBMITTED FLAWED DATATO NASD, FAILED TO NOTIFY NASD THAT THE DATA WAS FLAWED, FAILEDTO FOLLOW UP TO CORRECT THE FIRM'S DATA, AND FAILED TO TIMELYSUBMIT THE DATA TO NASD. OPPENHEIMER'S CONDUCT VIOLATED NASDPROCEDURAL RULE 8210 AND CONDUCT RULE 2110. IN ADDITION,OPPENHEIMER FAILED TO ADEQUATELY SUPERVISE THE SUBMISSION OFDATA TO NASD AND FAILED TO APPROPRIATELY DELEGATE TO AQUALIFIED PERSON THE RESPONSIBILITY OF ENSURING THAT THE DATAWAS COLLECTED AND SUBMITTED TO NASD IN A COMPLETE, ACCURATEAND TIMELY MANNER IN VIOLATION OF NASD CONDUCT RULES 3010(A)AND 2110.Current Status:Final163©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Other Product Type(s):Resolution Date:10/30/2007Resolution:Other Sanctions Ordered:UNDERTAKINGSSanction Details:WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, OPPENHEIMERCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE THE FIRM IS CENSURED, FINED $1,000,000 ANDMUST COMPLY WITH THE FOLLOWING UNDERTAKINGS: THE FIRM'SINTERNAL AUDIT DEPARTMENT WILL CONDUCT AUDITS, CONSISTENTWITH GENERALLY ACCEPTED AUDITING STANDARDS, ON A QUARTERLYBASIS FOR SIX QUARTERS TO REVIEW THE INTAKE, ASSIGNMENT ANDRESPONSES TO REGULATORY INQUIRES. NO MORE THAN 60 DAYS AFTERTHE END OF EACH QUARTER, THE FIRM MUST SUBMIT TO FINRA THEINTERNAL AUDIT DEPARTMENT'S QUARTERLY REPORT FOR THE COVEREDQUARTER. OPPENHEIMER MUST RETAIN, WITHIN 60 DAYS, ANINDEPENDENT CONSULTANT, NOT UNACCEPTABLE TO FINRA, TOCONDUCT A COMPREHENSIVE REVIEW OF THE ADEQUACY OF THE FIRM'SPOLICIES, SYSTEMS AND PROCEDURES (WRITTEN OR OTHERWISE) ANDTRAINING RELATING TO THE DELEGATION OF RESPONSIBILITY FORRESPONDING TO REGULATORY REQUESTS ACCURATELY ANDCOMPLETELY. AT THE CONCLUSION OF THE REVIEW, WHICH SHOULD BENO MORE THAN 120 DAYS, THE FIRM MUST REQUIRE THE INDEPENDENTCONSULTANT TO SUBMIT TO THE FIRM AND TO FINRA A WRITTEN REPORT.WITHIN 60 DAYS OF THE DELIVERY OF THE WRITTEN REPORT, THE FIRMSHALL ADOPT AND IMPLEMENT THE RECOMMENDATIONS OF THEINDEPENDENT CONSULTANT OR, IF IT DETERMINES THAT ARECOMMENDATION IS UNDULY BURDENSOME OR IMPRACTICAL,PROPOSE AND ALTERNATIVE PROCEDURE TO THE INDEPENDENTCONSULTANT DESIGNED TO ACHIEVE THE SAME OBJECTIVE.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $1,000,000.00Decision & Order of Offer of Settlement164©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceiReporting Source:FirmInitiated By:NASDPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:CENSURE, UNDERTAKINGDate Initiated:01/09/2006Docket/Case Number:2005000316701Principal Product Type:Mutual Fund(s)Other Product Type(s):Allegations:THE NASD HAS FILED A COMPLAINT ON 1/9/06 CONTAINING TWO CAUSESOF ACTION - FIRST, RESPONDENT FAILED TO RESPOND COMPLETELY,ACCURATELY, AND TIMELY TO AN NASD SURVEY, VIOLATIONS OFPROCEDURAL RULE 8210 AND CONDUCT RULE 2110; SECOND,RESPONDENT FAILED TO ADEQUATELY SUPERVISE THE PREPARATIONAND SUBMISSION OF A REGULATORY RESPONSE, VIOLATIONS OFCONDUCT RULES 3010(A) AND 2110.Current Status:FinalResolution Date:10/30/2007Resolution:Other Sanctions Ordered:Sanction Details:OPPENHEIMER PAID A $1 MILLION FINE AND WAS CENSURED. THE FIRMWILL HIRE AN INDEPENDENT CONSULTANT TO REVIEW FIRM'SPROCEDURES FOR RESPONDING TO REGULATORY INQUIRIES. ALSO, THEFIRM'S INTERNAL AUDIT DEPARTMENT WILL FOR SIX QUARTERS, REVIEWTHE FIRM'S INTAKE, ASSIGNMENT AND RESPONSE PROCEDURES TOREGULATORY INQUIRIES. CO RESPONDENT ALBERT G. LOWENTHAL HASBEEN DISMISSED.Sanctions Ordered:CensureMonetary/Fine $1,000,000.00Decision & Order of Offer of SettlementDisclosure 57 of 92iReporting Source:RegulatorCurrent Status:Final165©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:NEW YORK STOCK EXCHANGE DIVISION OF ENFORCEMENTPrincipal Sanction(s)/ReliefDate Initiated:11/18/2005Docket/Case Number:HPD# 05-181Principal Product Type:OtherOther Product Type(s):Allegations:**11/18/05**STIPULATION AND CONSENT TO PENALTY FILED BY NYSEDIVISION OF ENFORCEMENT AND PENDING.CONSENTED TOFINDINGS:WITHOUT ADMITTING OR DENYING GUILT, OPPENHEIMERCONSENTED TO FINDINGS THAT IT:1.VIOLATED EXCHANGE RULE 445 BYFAILING TO ESTABLISH AN ADEQUATE ANTI-MONEY LAUNDERINGCOMPLIANCE PROGRAM BY FAILING TO:A.ESTABLISH AND IMPLEMENTPOLICIES AND PROCEDURES REASONABLY EXPECTED TO DETECT ANDCAUSE THE REPORTING OF TRANSACTIONS REQUIRED UNDER 31 U.S.C.5318(G) AND THE IMPLEMENTING REGULATIONS THEREUNDER;B.ESTABLISH AND IMPLEMENT POLICIES, PROCEDURES AND INTERNALCONTROLS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEBANK SECRECY ACT AND THE IMPLEMENTING REGULATIONSHEREUNDER;C.PROVIDE FOR INDEPENDENT TESTING FOR COMPLIANCE TO BECONDUCTED BY MEMBER OR MEMBER ORGANIZATION PERSONNEL OR BYA QUALIFIED OUTSIDE PARTY;D.DESIGNATE ADEQUATE STAFF TO ENSURECOMPLIANCE WITH THE BANK SECRECY ACT; AND E.PROVIDE ONGOINGTRAINING FOR APPROPRIATE PERSONS.2.ENGAGED IN CONDUCTINCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OF TRADE INTHAT THE FIRM WAS ENABLING AND FACILITATING FOREIGN CUSTOMERSOF A FOREIGN BRANCH OFFICE TO ENGAGE IN SEVERAL MILLIONDOLLARS OF NON-SECURITY/INVESTMENT TRANSACTIONS THROUGHWIRE TRANSFERS AND INTRA-FIRM JOURNAL TRANSFERS.3.VIOLATEDEXCHANGE ACT RULES 17A-3 AND 17A-4 AND EXCHANGE RULE 440 BYFAILING TO KEEP BOOKS AND RECORDS REFLECTING CERTAIN JOURNALTRANSFERS;4.VIOLATED EXCHANGE RULE 401 BY FAILING TO ADHERE TOTHE PRINCIPLES OF GOOD BUSINESS PRACTICE IN THE CONDUCT OF ITSBUSINESS AFFAIRS BY PERMITTING CUSTOMERS AND EMPLOYEES IN AFOREIGN BRANCH OFFICE TO ENGAGE IN WIRE TRANSFERS ANDJOURNAL TRANSFERS WHILE EXECUTING FEW SECURITIES AND/ORINVESTMENT TRANSACTIONS IN THEIR CUSTOMERACCOUNTS;5.VIOLATED RULE 17A-8 OF THE EXCHANGE ACT BY FAILINGTO HAVE PROCEDURES TO MONITOR OR REVIEW TRANSACTIONS MADEIN A FOREIGN BRANCH OFFICE FOR SUSPICIOUS ACTIVITY, AND FAILED TOFILE SUSPICIOUS ACTIVITY REPORTS REGARDING THAT ACTIVITY.**CONTINUE #7*166©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSought:Other Sanction(s)/ReliefSought:Resolution Date:02/03/2006Resolution:Other Sanctions Ordered:Sanction Details:**12/14/05**DECISION HPD 05-181 ISSUED BY NYSE HEARING PANELPENDING.DECISION:1.VIOLATED EXCHANGE RULE 445 BY FAILING TOESTABLISH AN ADEQUATE ANTI-MONEY LAUNDERING COMPLIANCEPROGRAM BY FAILING TO:A.ESTABLISH AND IMPLEMENT POLICIES ANDPROCEDURES REASONABLY EXPECTED TO DETECT AND CAUSE THEREPORTING OF TRANSACTIONS REQUIRED UNDER 31 U.S.C. 5318(G) ANDTHE IMPLEMENTING REGULATIONS THEREUNDER;B.ESTABLISH AND IMPLEMENT POLICIES, PROCEDURES AND INTERNALCONTROLS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH THEBANK SECRECY ACT & THE IMPLEMENTING REGULATIONS THEREUNDER;C.PROVIDE FOR INDEPENDENT TESTING FOR COMPLIANCE TO BECONDUCTED BY MEMBER OR MEMBER ORGANIZATION PERSONNEL OR BYA QUALIFIED OUTSIDE PARTY;D.DESIGNATE ADEQUATE STAFF TO ENSURECOMPLIANCE WITH THE BANK SECRECY ACT; AND E.PROVIDE ONGOINGTRAINING FOR APPROPRIATE PERSONS.2.ENGAGED IN CONDUCTINCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OF TRADE INTHAT THE FIRM WAS ENABLING AND FACILITATING FOREIGN CUSTOMERSOF A FOREIGN BRANCH OFFICE TO ENGAGE IN SEVERAL MILLIONDOLLARS OF NON-SECURITY/INVESTMENT TRANSACTIONS THROUGHWIRE TRANSFERS AND INTRA-FIRM JOURNAL TRANSFERS.3.VIOLATEDEXCHANGE ACT RULES 17A-3 AND 17A-4 AND EXCHANGE RULE 440 BYFAILING TO KEEP BOOKS AND RECORDS REFLECTING CERTAIN JOURNALTRANSFERS;4.VIOLATED EXCHANGE RULE 401 BY FAILING TO ADHERE TOTHE PRINCIPLES OF GOOD BUSINESS PRACTICE IN THE CONDUCT OF ITSBUSINESS AFFAIRS BY PERMITTING CUSTOMERS AND EMPLOYEES IN AFOREIGN BRANCH OFFICE TO ENGAGE IN WIRE TRANSFERS ANDJOURNAL TRANSFERS WHILE EXECUTING FEW SECURITIES &/ORINVESTMENT TRANSACTIONS IN THEIR CUSTOMERACCOUNTS;5.VIOLATED RULE 17A-8 OF THE EXCHANGE ACT BY FAILINGTO HAVE PROCEDURES TO MONITOR OR REVIEW TRANSACTIONS MADEIN A FOREIGN BRANCH OFFICE FOR SUSPICIOUS ACTIVITY, AND FAILED TOFILE SUSPICIOUS ACTIVITY REPORTS REGARDING THATACTIVITY.**CONTINUED AT #14**Sanctions Ordered:CensureMonetary/Fine $2,800,000.00Decision167©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceRegulator Statement**CONTINUED FROM 13C**6.VIOLATED EXCHANGE RULE 342 BY FAILING TOESTABLISH AND MAINTAIN APPROPRIATE PROCEDURES FORSUPERVISION AND CONTROL REVIEW, WITH RESPECT TO:(A) FAILING TOMAINTAIN APPROPRIATE PROCEDURES FOR INTRA-ACCOUNT JOURNALS;(B) FAILING TO REASONABLY SUPERVISE THE FIRM'S ANTI-MONEYLAUNDERING UNIT;(C) FAILING TO ADHERE TO PRINCIPLES OF GOODBUSINESS PRACTICE;(D) FAILING TO CONDUCT AND DOCUMENT ON-SITEBRANCH OFFICE INSPECTIONS;(EFAILING TO EVIDENCE SUPERVISORYREVIEWS OF LETTERS OF AUTHORIZATION; (F) FAILING TO ENSURE THATITS OPERATIONAL AND REGULATORY ACTIVITIES WERE APPROPRIATELYSUPERVISED AND THAT IT HAD APPROPRIATE SYSTEMS, PROCEDURESAND STAFF TO FOLLOW-UP AND REVIEW ALL AREAS OF ITS BUSINESSACTIVITIES INCLUDING ITS ANTI-MONEY LAUNDERING PROGRAM,SUSPICIOUS ACTIVITY REPORTING AND BRANCH OFFICES TO ASSURECOMPLIANCE WITH APPLICABLE SECURITIES REGULATIONS ANDEXCHANGE RULES AND TO DETECT AND PREVENT THE VIOLATIONSINDICATED ABOVE.PENALTY: THE IMPOSITION BY THE EXCHANGE OF ACENSURE, A $2.8 MILLION FINE, TO BE DIVIDED EQUALLY BETWEEN THEEXCHANGE AND THE FINANCIAL CRIMES ENFORCEMENT NETWORK, ANDAN ORDER TO COMPLY WITH THE FOLLOWING UNDERTAKING:1.WITHIN120 DAYS FROM THE DATE THAT THIS DECISION BECOMES FINAL, SUBMITA SUPPLEMENTAL REPORT WITH RESPECT TO THEREVIEW,RECOMMENDATIONS AND ADOPTION OF RECOMMENDATIONS NOTED INTHE ERNST & YOUNG REPORT (THE "REPORT") OF THE REVIEW ALREADYCONDUCTED OF THE FIRM'S ANTI-MONEY LAUNDERING POLICIES ANDPROCEDURES, AND THE FOREIGN BRANCH OFFICE ACTIVITIESDESCRIBED HEREIN.2.ADOPT AND IMPLEMENT ANY AND ALL POLICIES,PROCEDURES AND PRACTICES RECOMMENDED IN THE ERNST & YOUNGREPORT CONSISTENT WITH THE FIRM'S BUSINESS.**THE DECISION IS NOW FINAL AND EFFECTIVE IMMEDIATELY.CONTACT:PEGGY GERMINO 212-656-8450iReporting Source:FirmInitiated By:NEW YORK STOCK EXCHANGE ENFORCEMENT DIVISIONDate Initiated:12/14/2005Allegations:INADEQUATE REVIEW OF WIRE TRANSFERS IN FOREIGN BRANCH OFFICE.INADEQUATE AML POLICIES AND PROCEDURES FOR REVIEW OF FOREIGNBRANCH OFFICE TRANSACTIONS. PROCESS FOR HANDLING FILING OF "SARS" WAS NOT ADEQUATE UNDER BSA PROVISIONS. FAILURE TOMAINTAIN ADEQUATE BOOKS AND RECORDS RELATING TO JOURNALTRANSFERS OCCURRING IN A FOREIGN BRANCH OFFICE.Current Status:Final168©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:FINEDocket/Case Number:HPD# 05-181Principal Product Type:No ProductOther Product Type(s):Resolution Date:12/14/2005Resolution:Other Sanctions Ordered:Sanction Details:FINE PAID & CONSENT EXECUTED BY FIRM.Firm StatementWITHOUT ADMITTING OR DENYING ALLEGATIONS ABOVE, FIRM PAID FINE& EXECUTED CONSENT.Sanctions Ordered:CensureMonetary/Fine $2,800,000.00ConsentDisclosure 58 of 92iReporting Source:RegulatorInitiated By:MISSOURIPrincipal Sanction(s)/ReliefSought:OtherDate Initiated:06/15/2005Docket/Case Number:AP-05-03URL for Regulatory Action:Principal Product Type:No ProductOther Product Type(s):Allegations:THE MISSOURI SECURITIES DIVISION ALLEGES THAT OPPENHEIMEREMPLOYED AN UNREGISTERED INVESTMENT ADVISER REPRESENTATIVEAND AN UNREGISTERED AGENT IN VIOLATION OF SECTION 409.201, RSMO2000 AND FAILED TO SUPERVISE AN AGENT IN MISSOURI AND THESECONSTITUTE GROUNDS TO REVOKE, BAR OR CENSURE OPPENHEIMER'SREGISTRATION IN MISSOURI PURSUANT TO SECTION 409.204, RSMO 2000.Current Status:Final169©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanction(s)/ReliefSought:Resolution Date:06/15/2005Resolution:Other Sanctions Ordered:Sanction Details:OPPENHEIMER IS PROHIBITED FROM EMPLOYING UNREGISTEREDAGENTS IN VIOLATION OF SECTION 409.4-401 RSMO CUMULATIVE SUPP.2004, AND IS PROHIBITED FROM FAILING TO SUPERVISE ITS EMPLOYEESIN VIOLATION OF SECTION 409.4-412, RSMO CUMULATIVE SUPP. 2004.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?YesSanctions Ordered:Monetary/Fine $122,050.00Disgorgement/RestitutionConsentiReporting Source:FirmInitiated By:MISSOURIPrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:DISGORGEMENT, RESTITUTIONDate Initiated:11/07/2003Docket/Case Number:AP-05-03Principal Product Type:No ProductOther Product Type(s):Allegations:1.) REGISTERED REP FILLED OUT RENEWAL FORM INCORRECTLY ANDMISSOURI REGISTRATION WAS INADVERTANTLY TERMINATED. 2.) FAILEDTO FILE REGISTRATION EXEMPTION PAPERWORK FOR 1 REGISTEREDREP. 3.) REGISTERED REP RECEIVED UNAUTHORIZED LOAN FROM CLIENT(FRIEND) VIA WIRE FROM CLIENT'S MARGIN ACCOUNT TO RR'SUNDISCLOSED OUTSIDE BUSINESS INTEREST.Current Status:Final170©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceResolution Date:06/15/2005Resolution:Other Sanctions Ordered:Sanction Details:RESTITUTION OF $50,000 + MISSOURI'S COST OF INVESTIGATION OF$9050.00. RESTITUTION OF 63,000.00. TOTALING $122,050.00.Sanctions Ordered:Monetary/Fine $122,050.00Disgorgement/RestitutionSettledDisclosure 59 of 92iReporting Source:RegulatorInitiated By:NASDPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:04/26/2005Docket/Case Number:CE420050002Principal Product Type:OtherOther Product Type(s):MUNICIPAL SECURITIESAllegations:SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934, RULE 17A-4THEREUNDER, MSRB RULES G-14, G-27, NASD RULES 2110, 3010(A) AND(B), 3110, 8210 - RESPONDENT MEMBER FAILED TO REPORT ON A TIMELYBASIS MUNICIPAL SECURITIES TRANSACTIONS WITH OTHER DEALERS;FAILED TO REPORT ACCURATELY THE PRICE OR TIME OR WHETHER ITACTED AS PRINCIPAL OR AGENT ON NUMEROUS MUNICIPAL SECURITIESTRADES WITH CUSTOMERS; FAILED TO REPORT OR REPORTEDMUNICIPAL SECURITIES TRANSACTIONS THAT WERE NEVER EFFECTEDON NUMEROUS OCCASIONS; FAILED TO RESPOND IN A TIMELY MANNERTO NASD REQUESTS FOR DOCUMENTS AND INFORMATION; FAILED TOHAVE A SYSTEM IN PLACE TO SAVE ALL ELECTRONIC COMMUNICATIONSBETWEEN ITS EMPLOYEES, AND ALLOWED ITS EMPLOYEES TO DELETEELECTRONIC COMMUNICATIONS.Current Status:FinalResolution Date:09/28/2006Resolution:Decision & Order of Offer of Settlement171©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:UNDERTAKINGSSanction Details:WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, OPPENHEIMER &CO. INC. CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRYOF FINDINGS, THEREFORE THE FIRM IS FINED $800,000 AND REQUIRED TOCARRY OUT THE FOLLOWING UNDERTAKING: RETAIN OUTSIDE COUNSELTO REVIEW, MODIFY, AND ENHANCE OPPENHEIMER'S WRITTENSUPERVISORY PROCEDURES APPLICABLE TO MUNICIPAL TRADEREPORTING AND COMPLYING WITH REGULATORY REQUESTS. OUTSIDECOUNSEL MUST PREPARE A REPORT DESCRIBING THE NATURE ANDEXTENT OF ITS REVIEW, AND THE MODIFICATIONS AND ENHANCEMENTSTHAT IT RECOMMENDS. REVIEW ITS PROCEDURES REGARDINGPRESERVATION OF ELECTRONIC COMMUNICATIONS; WITHIN 120 DAYS OFNOTICE OF ACCEPTANCE OF THE OFFER, OPPENHEIMER WILL INFORMNASD IN WRITING THAT IT HAS COMPLETED ITS REVIEW ANDESTABLISHED SYSTEMS AND PROCEDURES FOR THE PRESERVATION OFELECTRONIC COMMUNICATIONS; WITHIN 120 DAYS OF NOTICE OFACCEPTANCE OF THE OFFER, A SENIOR OFFICER OF OPPENHEIMER WILLPROVIDE NASD A NOTARIZED CERTIFICATION THAT IT HAS COMPLIEDWITH THE UNDERTAKINGS AND IMPLEMENTED PROCEDURES.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:Monetary/Fine $800,000.00iReporting Source:FirmAllegations:SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934, RULE 17A-4THEREUNDER, MSRB RULES G-14, G-27, NASD RULES 2110, 3010(A) AND(B), 3110, 8210 - RESPONDENT MEMBER FAILED IN MAY 2003 TO REPORTON A TIMELY BASIS MUNICIPAL SECURITIES TRANSACTIONS WITH OTHERDEALERS; FAILED TO REPORT ACCURATELY THE PRICE OR TIME ORWHETHER IT ACTED AS PRINCIPAL OR AGENT ON NUMEROUS MUNICIPALSECURITIES TRADES WITH CUSTOMERS; FAILED TO REPORT ORREPORTED MUNICIPAL SECURITIES TRANSACTIONS THAT WERE NEVEREFFECTED ON NUMEROUS OCCASIONS; FAILED TO RESPOND IN A TIMELYMANNER TO NASD REQUESTS FOR DOCUMENTS AND INFORMATION;FAILED TO HAVE A SYSTEM IN PLACE TO SAVE ALL ELECTRONICCOMMUNICATIONS BETWEEN ITS EMPLOYEES, AND ALLOWED ITSCurrent Status:Final172©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:NASDPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:RETENTION OF OUTSIDE COUNSEL TO REVIEW, MODIFY AND ENHANCEWRITTEN SUPERVISORY PROCEDURES REGARDING MUNICIPAL TRADEREPORTING AND COMPLYING WITH REGULATORY REQUESTS; REVIEW ITSPROCEDURES REGARDING THE PRESERVATIONS OF ELECTRONICCOMMUNICATIONS FOR COMPLIANCE WITH THE NASD RULE OF FEDERALSECURITIES LAWS.Date Initiated:04/26/2005Docket/Case Number:CE4050002Principal Product Type:Debt - GovernmentOther Product Type(s):DEBT - MUNICIPALEMPLOYEES TO DELETE ELECTRONIC COMMUNICATIONS.Resolution Date:09/28/2006Resolution:Other Sanctions Ordered:MEMBER IS REQUIRED TO RETAIN OUTSIDE COUNSEL TO REVIEW, MODIFYAND ENHANCE WRITTEN PROCEDURES REGARDING MUNICIPAL TRADEREPORTING AND COMPLIANCE WITH REGULATORY REQUESTS.Sanction Details:$800,000.00 FINE TO BE PAID BY APPLICANTFirm StatementPLEASE SEE RESPONSE TO 7 ABOVE. MATTER RESOLVED BY APPLICANTWITHOUT ADMITTING OR DENYING ALLEGATIONS (APPLICANTCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS MADE AND FILED UNDER NASD DOCKET NO. CE4050002)Sanctions Ordered:Monetary/Fine $800,000.00Decision & Order of Offer of SettlementDisclosure 60 of 92iReporting Source:RegulatorAllegations:SEC RULES 10A-1, 10B-10, 17A-3 AND 17A-4 NASD CONDUCT RULES 21103110, 3010 AND 3370 NASD MARKETPLACE RULE 5220(E) - FAHNESTOCKEFFECTED TWO SHORT SALES IN CERTAIN SECURITIES FOR THE FIRM'SPROPRIETARY ACCOUNTS AND FAILED TO MAKE AND ANNOTATE ANAFFIRMATIVE DETERMINATION THAT THE FIRM COULD BORROW THESECURITIES OR OTHERWISE PROVIDE FOR DELIVERY OF THE SECURITIESBY SETTLEMENT DATE. THE FIRM EXECUTED FIVE SHORT SALE ORDERSCurrent Status:Final173©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:NASDPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:10/18/2004Docket/Case Number:CMS040156Principal Product Type:OtherOther Product Type(s):UNSPECIFIED TYPE OF SECURITIESIN CQS SECURITIES AND FAILED TO PROPERLY MARK THE ORDERS ASSHORT IN ITS TRADING LEDGER. ALSO, THE FIRM ON THREE OCCASIONSFAILED TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITSCUSTOMER ITS CORRECT CAPACITY IN THE TRANSACTION. THE FIRMINCORRECTLY STATED ITS CAPACITY AS AGENT ON THE CUSTOMERCONFIRMATIONS. IN ADDITION, THE FIRM FAILED ON ONE OCCASION TOSHOW THE TIME OF ORDER RECEIPT ON THE MEMORANDUM OF ITSBROKERAGE ORDERS AND FAILED ON ONE OCCASION TO SHOW THECORRECT VOLUME ON THE MEMORANDUM OF ITS BROKERAGE ORDERS.THE FIRM FAILED ON THREE OCCASIONS TO DOCUMENT THE NAME OFEACH DEALER IT CONTACTED AND THE QUOTATIONS RECEIVED TODETERMINE THE BEST INTER-DEALER MARKET. THE FIRM, REGISTEREDWITH NASD AS AN ITS/CAES MARKET MAKER, AS THE TERM IS DEFINED INNASD MARKETPLACE RULE 5210(E), IN EACH SECURITY IN WHICH IT MADEA MARKET IN ITS, FAILED IN 78 INSTANCES TO MAINTAIN CONTINUOUSTWO-SIDED QUOTATIONS IN THE ABSENCE OF THE GRANT OF ANEXCUSED WITHDRAWAL OR A FUNCTIONAL EXCUSED WITHDRAWAL BYTHE NASD. THE FIRM'S SUPERVISORY SYSTEM DID NOT PROVIDE FORSUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITHRESPECT TO THE APPLICABLE SECURITIES LAWS AND REGULATIONS, ANDTHE RULES OF NASD, CONCERNING: (I) REGISTRATION QUALIFICATIONSOF FIRM PERSONNEL, (II) BEST EXECUTION, (III) ANTI-INTIMIDATION, (IV)SHORT SALES, AND (V) MAINTAINING CONTINUOUS TWO-SIDEDQUOTATIONS AS AN ITS/CAES MARKET MAKER.Resolution Date:05/17/2005Resolution:Decision & Order of Offer of Settlement174©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, OPPENHEIMER &CO., INC. CONSENTED TO THE DESCRIBED SANCTIONS AND TO THEENTRY OF FINDINGS, THEREFORE THE FIRM IS CENSURED AND FINED$32,500.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $32,500.00iReporting Source:FirmAllegations:FAHNESTOCK EFFECTED TWO SHORT SALES IN CERTAIN SECURITIES FORTHE FIRM'S PROPRIETARY ACCOUNTS AND FAILED TO MAKE ANDANNOTATE AN AFFIRMATIVE DETERMINATION THAT THE FIRM COULDBORROW THE SECURITIES OR OTHERWISE PROVIDE FOR DELIVERY OFTHE SECURITIES BY SETTLEMENT DATE. THE FIRM EXECUTED FIVESHORT SALE ORDERS IN CQS SECURITIES AND FAILED TO PROPERLYMARK THE ORDERS AS SHORT IN ITS TRADING LEDGER. ALSO, THE FIRMON THREE OCCASIONS FAILED TO PROVIDE WRITTEN NOTIFICATIONDISCLOSING TO ITS CUSTOMER ITS CORRECT CAPACITY IN THETRANSACTION. THE FIRM INCORRECTLY STATED ITS CAPACITY AS AGENTON THE CUSTOMER CONFIRMATIONS. IN ADDITION, THE FIRM FAILED ONONE OCCASION TO SHOW THE TIME OF ORDER RECEIPT ON THEMEMORANDUM OF ITS BROKERAGE ORDERS AND FAILED ON ONEOCCASION TO SHOW THE CORRECT VOLUME ON THE MEMORANDUM OFITS BROKERAGE ORDERS. THE FIRM FAILED ON THREE OCCASIONS TODOCUMENT THE NAME OF EACH DEALER IT CONTACTED AND THEQUOTATIONS RECEIVED TO DETERMINE THE BEST INTER-DEALERMARKET. THE FIRM, REGISTERED WITH NASD AS AN ITS/CAES MARKETMAKER, AS THE TERM IS DEFINED IN NASD MARKETPLACE RULE 5210(E),IN EACH SECURITY IN WHICH IT MADE A MARKET IN ITS, FAILED IN 78INSTANCES TO MAINTAIN CONTINUOUS TWO-SIDED QUOTATIONS IN THEABSENCE OF THE GRANT OF AN EXCUSED WITHDRAWAL OR AFUNCTIONAL EXCUSED WITHDRAWAL BY THE NASD. THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TOTHE APPLICABLE SECURITIES LAWS AND REGULATIONS, AND THE RULESCurrent Status:Final175©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:NASDPrincipal Sanction(s)/ReliefSought:CensureOther Sanction(s)/ReliefSought:Date Initiated:10/18/2004Docket/Case Number:CMS040156Principal Product Type:OtherOther Product Type(s):UNSPECIFIED TYPE OF SECURITIESOF NASD, CONCERNING: (I) REGISTRATION QUALIFICATIONS OF FIRMPERSONNEL, (II) BEST EXECUTION, (III) ANTI-INTIMIDATION, (IV) SHORTSALES, AND (V) MAINTAINING CONTINUOUS TWO-SIDED QUOTATIONS ASAN ITS/CAES MARKET MAKER.Resolution Date:05/17/2005Resolution:Other Sanctions Ordered:Sanction Details:CENSURE AND FINE OF $32500.00 PAID.Sanctions Ordered:CensureMonetary/Fine $32,500.00SettledDisclosure 61 of 92iReporting Source:RegulatorAllegations:SEC RULE 17A-3, NASD RULES 3110, 3370, 6130(D), 6620(C)(2) -MEMBERFIRM EXECUTED ONE CUSTOMER SHORT SALE ORDER AND TWOPROPRIETARY SHORT SALE ORDER AND FAILED TO MAKE AN AFFIRMATIVEDETERMINATION PRIOR TO EXECUTING THE TRANSACTION; FAILED TOREPORT TO ACT THE CORRECT SYMBOL INDIATING WHETHER THREETRANSACTIONS IN ELIGIBLE SECURITIES WERE A BUY, SELL, SELL SHORT,SELL SHORT EXEMPT, OR CROSS; FAILED TO REPORT THE CORRECTNUMBER OF SHARES THROUGH ACT IN FOUR LAST SALE REPORTS OFTRANSACTIONS IN OTC EQUITY SECURITIES; FAILED TO SHOW THECORRECT TIME OF EXECUTION ON THE MEMORANDUM OF BROKERAGEORDERS; FAILED TO SHOW THE PRICE AND NUMBER OF SHARES OF EACHPARTIAL EXECUTION ON THE MEMORANDUM OF ONE BROKERAGEORDER; FAILED TO SHOW THE TIME OF ENTRY AND TERMS ANDCurrent Status:Final176©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:NASDPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:12/23/2003Docket/Case Number:CMS030297Principal Product Type:No ProductOther Product Type(s):CONDITIONS ON THE MEMORANDUM OF BROKERAGE ORDERS; FAILEDTO INDICATE WHETHER THE ORDER WAS LONG OR SHORT ON THEMEMORANDUM OF BROKERAGE ORDERS;Resolution Date:12/23/2003Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THE FIRMCONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS, THEREFORE THE FIRM IS FINED $4,500 (C0MPOSED OF $1,000FINE FOR THE AFFIRMATIVE DETERMINATION RULE VIOLATIONS AND$2,500 FOR THE TRANSACTION REPORTING VIOLATIONS, AND $1,000 FORTHE RECORDKEEPING RULE VIOLATIONS).Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:CensureMonetary/Fine $4,500.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmAllegations:THE FIRM, WITHOUT ADMITTING OR DENYING THE ALLEGATIONS,CONSENTED TO THE FINDINGS IN CONNECTION WITH THE FOLLOWINGRULES. NASD CONDUCT RULE 3370, NASD MARKETPLACE RULE 6130(D),NASD MARKETPLACE RULE 6620(C)(2). SEC RULE 17A-3 AND NASD RULECurrent Status:Final177©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:NASDPrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:AWCDate Initiated:11/11/2003Docket/Case Number:CMS030297Principal Product Type:Equity - OTCOther Product Type(s):3110.Resolution Date:01/16/2004Resolution:Other Sanctions Ordered:Sanction Details:A FINE OF $4,500 WAS PAID ON 1/16/04.Sanctions Ordered:CensureMonetary/Fine $4,500.00Acceptance, Waiver & Consent(AWC)Disclosure 62 of 92iReporting Source:RegulatorInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Date Initiated:03/13/2003Docket/Case Number:CMS030039Principal Product Type:OtherOther Product Type(s):UNKNOWN TYPE OF SECURITIES.Allegations:NASD CONDUCT RULE 3320, NASD MARKETPLACE RULE 4613(B), AND SECRULE 11AC1-1 - RESPONDENT MEMBER ("FIRM") WAS A MARKET MAKER INSECURITIES, AND AN ORDER WAS PRESENTED TO THE FIRM AT THEFIRM'S PUBLISHED BID OR PUBLISHED OFFER IN AN AMOUNT UP TO ITSPUBLISHED QUOTATION SIZE. THE FIRM FAILED TO EXECUTE THE ORDERSUPON PRESENTMENT AND THEREBY FAILED TO HONOR ITS PUBLISHEDQUOTATION.Current Status:Final178©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Resolution Date:03/13/2003Resolution:Other Sanctions Ordered:Sanction Details:WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, RESPONDENTMEMBER CONSENTED TO THE DESCRIBED SANCTIONS AND TO THEENTRY OF FINDINGS; THEREFORE, THE FIRM IS FINED $5,000.Sanctions Ordered:Monetary/Fine $5,000.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Principal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:AWCDate Initiated:12/18/2002Docket/Case Number:CMS030039Principal Product Type:Equity - OTCOther Product Type(s):Allegations:NASD CONDUCT RULE 3320 AND NASD MARKETPLACE RULE 4613(B), ANDSEC RULE 11AC1-1 RESPONDENT MEMBER ("FIRM") WAS A MARKETMAKER IN SECURITIES, AND AN ORDER WAS PRESENTED TO THE FIRM ATTHE FIRMS'S PUBLISHED BID OR PUBLISHED OFFER IN AN AMOUNT UP TOITS PUBLISHED QUOTATION SIZE. THE FIRM FAILED TO EXECUTE THEORDERS UPON PRESENTMENT AND THEREBY FAILED TO HONOR ITSPUBLISHED QUOTATION.Current Status:FinalResolution Date:03/13/2003Resolution:Sanctions Ordered:Monetary/Fine $5,000.00Acceptance, Waiver & Consent(AWC)179©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:Sanction Details:A FINE OF $5000.00 HAS BEEN PAID ON 4/1/03.Disclosure 63 of 92iReporting Source:RegulatorInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Principal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:04/15/2002Docket/Case Number:CMS020059Principal Product Type:OtherOther Product Type(s):UNKNOWN TYPE OF SECURITIES.Allegations:NASD RULES 2110 AND 2320 - WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE RESPONDENT FIRM CONSENTED TO THE ENTRY OFFINDINGS THAT IT FAILED, IN TRANSACTIONS FOR OR WITH A CUSTOMER,TO USE REASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER-DEALERMARKET AND FAILED TO BUY OR SELL IN SUCH MARKET SO THAT THERESULTANT PRICE TO ITS CUSTOMER WAS AS FAVORABLE AS POSSIBLEUNDER PREVAILING MARKET CONDITIONS.Current Status:FinalResolution Date:04/15/2002Resolution:Other Sanctions Ordered:Sanction Details:A FINE OF $5,000 AND RESTITUTION TO THE CUSTOMERS IN THE TOTALAMOUNT OF $5,906.25, PLUS INTEREST AT THE RATE SET FORTH INSECTION 6621(A) OF THE INTERNAL REVENUE CODE, FROM THE DATE OFTHE VIOLATIVE CONDUCT UNTIL THE DATE THIS AWC IS ACCEPTED BY THENAC. A REGISTERED PRINCIPAL OF THE FIRM SHALL SUBMITSATISFACTORY PROOF OF PAYMENT OF THE RESTITUTION, OR OFREASONABLE AND DOCUMENTED EFFORTS UNDERTAKEN TO EFFECTRESTITUTION, TO THE NASD MARKET REGULATION DEPARTMENT NOSanctions Ordered:Monetary/Fine $5,000.00Disgorgement/RestitutionAcceptance, Waiver & Consent(AWC)180©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceLATER THAN 120 DAYS AFTER ACCEPTANCE OF THIS AWC. IF FOR ANYREASON RESPONDENT FIRM CANNOT LOCATE ANY CUSTOMER AFTERREASONABLE AND DOCUMENTED EFFORTS WITHIN SUCH PERIOD, ORSUCH ADDITIONAL PERIOD AGREED BY THE NASD, THE RESPONDENTFIRM SHALL FORWARD ANY UNDISTRIBUTED RESTITUTION AND INTERESTTO THE APPROPRIATE ESCHEAT, UNCLAIMED PROPERTY, OR ABANDONEDPROPERTY FUND FOR THE STATE IN WHICH THE CUSTOMER IS LASTKNOWN TO HAVE RESIDED.iReporting Source:FirmInitiated By:NASD REGULATION, INC.Principal Sanction(s)/ReliefSought:RestitutionOther Sanction(s)/ReliefSought:FINEDDate Initiated:01/30/2002Docket/Case Number:CMS020059Principal Product Type:Equity - OTCOther Product Type(s):Allegations:THE FIRM FAILED TO USE REASONABLE DILIGENCE TO ASCERTAIN THEBEST INTER-MARKET AND FAILED TO BUY OR SELL IN SUCH MARKET SOTHAT THE RESULT PRICE TO ITS CUSTOMER WAS AS FAVORABLE ASPOSSIBLE UNDER PREVAILING MARKET CONDITIONS.Current Status:FinalResolution Date:04/18/2002Resolution:Other Sanctions Ordered:RESTITUTIONSanction Details:RESTITUTION OF $5906.25 PLUS INTEREST AND A FINE OF $5000.00 PAIDSanctions Ordered:Monetary/Fine $5,000.00Disgorgement/RestitutionAcceptance, Waiver & Consent(AWC)Disclosure 64 of 92iReporting Source:RegulatorCurrent Status:Final181©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Principal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:01/29/2002Docket/Case Number:C10020009Principal Product Type:OtherOther Product Type(s):MUNICIPAL SECURITIESAllegations:MSRB RULE G-36 - WITHOUT ADMITTING OR DENYING THE ALLEGATIONS,RESPONDENT MEMBER CONSENTED TO THE ENTRY OF FINDINGS THAT ITACTED AS AN UNDERWRITER IN PRIMARY OFFERINGS OF MUNICIPALSECURITIES AND WAS REQUIRED TO FILE DOCUMENTS WITH THE MSRB INCONNECTION WITH THE OFFERINGS, FAILED TO TIMELY SUBMIT OFFICIALSTATEMENTS AND/OR OTHER DOCUMENTS TO THE MSRB AS REQUIREDBY MSRB RULE G-36.Resolution Date:01/29/2002Resolution:Other Sanctions Ordered:Sanction Details:FINED $2,000Sanctions Ordered:Monetary/Fine $2,000.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmInitiated By:NATIONAL ASSOCIATION SECURITIES DEALERS, INC.Date Initiated:04/04/2000Docket/Case Number:C10020009Allegations:WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, FAHNESTOCK & CO.CONSENTED TO THE ENTRY OF FINDINGS THAT IT ACTED AS ANUNDERWRITER IN PRIMARY OFFERINGS OF MUNICIPAL SECURITIES ANDWAS REQUIRED TO FILE DOCUMENTS WITH THE MSRB IN CONNECTIONWITH THE OFFERINGS, FAILED TO TIMELY SUBMIT OFFICAL STATEMENTSAND/OR OTHER DOCUMENTS TO THE MSRB AS REQUIRED BY MSRB RULEG-36.Current Status:Final182©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Principal Product Type:No ProductOther Product Type(s):MUNICIPAL SECURITIESResolution Date:01/29/2002Resolution:Other Sanctions Ordered:Sanction Details:PAID FINE OF $2000.00Firm StatementON 1/29/02 THE FIRM WAS NOTIFIED THAT THE NASD HAD ACCEPTED ALETTER OF ACCEPTANCE (AWC) TO SETTLE FINDINGS THAT WE HADFAILED TO TIMELY SUBMIT OFFICAL STATEMENTS PURSUANT TO MSRBRULE G-36.Sanctions Ordered:Monetary/Fine $2,000.00Acceptance, Waiver & Consent(AWC)Disclosure 65 of 92iReporting Source:RegulatorInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Date Initiated:04/18/2000Docket/Case Number:CMS000075Principal Product Type:OtherAllegations: SEC RULE 1AC1-4, NASD RULE 6130(D) - RESPONDENT MEMBER FAILEDTO DISPLAY IMMEDIATELY CUSTOMER LIMIT ORDERS IN NASDAQSECURITIES IN ITS PUBLIC QUOTATION, WHEN SUCH ORDER WAS AT APRICE THAT WOULD HAVE IMPROVED THE FIRM'S BID OR OFFER IN EACHSUCH SECURITY OR WHEN EACH SUCH ORDER WAS PRICED EQUAL TOITS BID OR OFFER AND THE NATIONAL BEST BID OR OFFER FOR EACHSUCH SECURITY, AND THE SIZE OF THE ORDER REPRESENTED MORETHAN A DE MINIMUS CHANGE IN RELATION TO THE SIZE ASSOCIATED WITHTHE FIRM'S BID OR OFFER IN EACH SUCH SECURITY; AND FAILED TOREPORT TO ACT THE CORRECT SYMBOL INDICATING WHETHER THE FIRMEXECUTED TRANSACTIONS IN ELIGIBLE SECURITIES IN A PRINCIPAL ORAGENCY CAPACITY.Current Status:Final183©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Other Product Type(s):Resolution Date:04/18/2000Resolution:Other Sanctions Ordered:Sanction Details:FINED $4,000Sanctions Ordered:Monetary/Fine $4,000.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmInitiated By:NASDPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Date Initiated:01/06/2000Docket/Case Number:CMS000075AWCPrincipal Product Type:Equity - OTCOther Product Type(s):Allegations:ALLEGED VIOLATION OF SEC RULE 11AC1-4 LIMIT ORDER DISPLAY ANDNASD MARKETPLACE RULE 6130 (D), ACT REPORTING.Current Status:FinalResolution Date:04/18/2000Resolution:Other Sanctions Ordered:Sanction Details:A FINE OF $4000.00 WAS PAID.Firm StatementA LETTER OF ACCEPTANCE WAIVER AND CONSENT WAS ACCEPTED BYNASD REGULATION, INC'S OFFICE OF DISCIPLINARY AFFAIRS AND THESanctions Ordered:Monetary/Fine $4,000.00Acceptance, Waiver & Consent(AWC)184©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceNATIONAL ADJUDICATORY COUNCIL ON 6/7/00. A $4000.00 FINE WAS PAID.Disclosure 66 of 92iReporting Source:RegulatorInitiated By:NYSE DIVISION OF ENFORCEMENTDate Initiated:03/26/2001Docket/Case Number:HPD# 03-100Allegations:**04/22/2003** STIPULATION AND CONSENT TO PENALTY FILED BY NYSEDIVISION OF ENFORCEMENT AND PENDING. CONSENTED TOFINDINGS/STIPULATED SANCTION: WITHOUT ADMITTING OR DENYINGGUILT, FAHNESTOCK CONSENTS TO: A. FINDINGS BY THE HEARING PANELTHAT IT VIOLATED AND/OR CAUSED OR PERMITTED A VIOLATION OF: 1.EXCHANGE RULE 401, IN THAT IT DID NOT ADHERE AT ALL TIMES TO THEPRINCIPLES OF GOOD BUSINESS PRACTICE, BY FAILING TO NOTIFY THEEXCHANGE IMMEDIATELY UPON DISCOVERY OF ANY EXISTING ORIMPENDING CONDITION WHICH IT REASONABLY SHOULD HAVE BELIEVEDCOULD LEAD TO OPERATIONAL PROBLEMS AND/OR IMPAIRMENT OFRECORDKEEPING, CLEARANCE OR CONTROL FUNCTIONS. 2. SECREGULATION § 240.17A-3, SEC REGULATION § 240.17A-4, AND EXCHANGERULE 440, IN THAT IT FAILED TO MAKE AND/OR KEEP CURRENT CERTAINBOOKS AND RECORDS, AND IT DID NOT PRESERVE OR COULD NOTLOCATE ONE OR MORE REQUIRED RECORDS. 3. SEC REGULATION §240.17A-11(D), IN THAT IT FAILED TO TIMELY GIVE REQUIRED NOTICE TOTHE SEC AND THE EXCHANGE THAT IT DID NOT MAKE OR KEEP CURRENTCERTAIN REQUIRED BOOKS AND RECORDS. 4. EXCHANGE RULE 440.10(1),IN THAT IT FAILED TO RECONCILE MUTUAL FUND POSITIONS IN A TIMELYMANNER BY COMPARISON OF ITS BOOKS AND RECORDS WITH POSITIONSTATEMENTS REQUIRED TO BE RECEIVED FROM OTHER ORGANIZATIONS,AND FAILED TO TIMELY RESOLVE POSITION DIFFERENCES. 5. EXCHANGERULE 440.10(3), SEC REGULATION § 240.15C3-1(C)(2)(IV), AND SECREGULATION § 240.17A-13(B)(5), IN THAT: (I) IT FAILED TO ENTER AGEDUNRESOLVED SECURITY POSITION DIFFERENCES INTO A DIFFERENCEACCOUNT; AND, (II) IT FAILED TO VALUE SHORT SECURITY POSITIONDIFFERENCES AS OF THE DATE OF A REQUIRED COMPUTATION OF NETCAPITAL. 6. SEC REGULATION § 240.15C3-1, IN THAT IT DID NOTACCURATELY PREPARE COMPUTATIONS OF NET CAPITAL, BY FAILING TOTAKE A DEDUCTION FOR THE VALUE OF AGED UNRESOLVED SHORTSECURITIES DIFFERENCES, AND BY TAKING DEDUCTIONS FOR SUCHDIFFERENCES USING INFORMATION THAT WAS NOT CURRENT AS OF THEDATE OF THE COMPUTATIONS. **CONTINUED IN #13**Current Status:Final185©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Principal Product Type:OtherOther Product Type(s):Resolution Date:07/11/2003Resolution:Other Sanctions Ordered:Sanction Details:**06/13/2003** VIOLATED AND/OR CAUSED OR PERMITTED A VIOLATION OF:EXCHANGE RULE 401 BY FAILING TO NOTIFY THE EXCHANGEIMMEDIATELY UPON DISCOVERY OF A CONDITION WHICH IT REASONABLYSHOULD HAVE BELIEVED COULD LEAD TO OPERATIONAL PROBLEMSAND/OR IMPAIRMENT OF SPECIFIED FUNCTIONS; SEC REGULATION§240.17A-3, SEC REGULATION §240.17A-4, AND EXCHANGE RULE 440, INTHAT IT FAILED TO MAKE AND/OR KEEP CURRENT CERTAIN BOOKS ANDRECORDS, AND DID NOT PRESERVE OR COULD NOT LOCATE REQUIREDRECORDS; SEC REGULATION §240.17A-11(D), IN THAT IT FAILED TO TIMELYGIVE REQUIRED NOTICE TO THE SEC AND THE EXCHANGE THAT IT DIDNOT MAKE OR KEEP CURRENT CERTAIN REQUIRED BOOKS ANDRECORDS; EXCHANGE RULE 440.10(1), IN THAT IT FAILED TO RECONCILEMUTUAL FUNDS POSITIONS IN A TIMELY MANNER AND IT FAILED TO TIMELYRESOLVE POSITION DIFFERENCES; EXCHANGE RULE 440.10(3), SECREGULATION §240.15C3-1(C)(2)(IV), AND SEC REGULATION §240.17A-13(B)(5), IN THAT IT FAILED TO: (I) ENTER AGED UNRESOLVED SECURITYPOSITIONS DIFFERENCES INTO A DIFFERENCE ACCOUNT, AND (II) VALUESHORT SECURITY POSITION DIFFERENCE AS OF THE DATE OF AREQUIRED COMPUTATION OF NET CAPITAL; SEC REGULATION §240.15C3-1, IN THAT IT DID NOT ACCURATELY PREPARE COMPUTATIONS OF NETCAPITAL; BY FAILING TO TAKE A DEDUCTION FOR THE VALUE OF AGEDUNRESOLVED SHORT SECURITIES DIFFERENCES, AND BY TAKINGDEDUCTIONS FOR SUCH DIFFERENCES USING INFORMATION THAT WASNOT CURRENT AS OF THE DATE OF THE COMPUTATIONS; SECREGULATION §240.17A-5 AND EXCHANGE RULE 476(A)(10), IN THAT IT FILEDINACCURATE FOCUS REPORTS WITH THE EXCHANGE; SEC REGULATION§240.15C3-3(B)(1), (E) AND (H), IN THAT IT FAILED TO: (I) OBTAIN AND/ORMAINTAIN THE PHYSICAL POSITION OR CONTROL OF FULLY-PAIDSECURITIES OR EXCESS MARGIN SECURITIES CARRIED BY IT FORACCOUNTS OF CUSTOMERS; (II) **CONTINUED IN #13**Sanctions Ordered:CensureMonetary/Fine $500,000.00Decision186©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceRegulator StatementACCURATELY COMPUTE THE AMOUNT OF CASH OR QUALIFIEDSECURITIES REQUIRED TO BE ON DEPOSIT IN ITS SPECIAL RESERVEBANK ACCOUNT FOR THE EXCLUSIVE BENEFIT OF CUSTOMERS; AND (III)BUY IN UNRESOLVED SHORT SECURITY DIFFERENCES WITHIN THEREQUIRED TIME PERIOD; EXCHANGE RULE 412, IN THAT IT DID NOTOBTAIN AN EXEMPTION FROM THE EXCHANGE CONCERNING THEDELIVERY OF MUTUAL FUND ASSETS OUTSIDE THE ESTABLISHEDSYSTEM; EXCHANGE RULE 342, IN THAT IT FAILED TO SUPERVISE ANDCONTROL AND PROVIDE FOR APPROPRIATE PROCEDURES OFSUPERVISION AND CONTROL OVER ITS BUSINESS ACTIVITIES, INCLUDINGITS MUTUAL FUND CLEARANCE ACTIVITIES, ITS FINANCIAL REGULATORYREPORTING ACTIVITIES, AND ITS COMPLIANCE WITH REGULATORYNOTIFICATION REQUIREMENTS - CONSENT TO CENSURE, $500,000 FINEAND A REQUIREMENT TO COMPLY WITH TWO UNDERTAKINGS.**07/11/2003** THE DECISION IS NOW FINAL AND IS EFFECTIVEIMMEDIATELY. CONTACT: PEGGY GERMINO (212) 656-8450.iReporting Source:FirmInitiated By:NYSE DIVISION OF ENFORCEMENTPrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:STIPULATION AND CONSENTDate Initiated:03/27/2001Docket/Case Number:03-100Principal Product Type:Mutual Fund(s)Other Product Type(s):Allegations:FAHNESTOCK & CO. INC. HAS BEEN CHARGED BY THE NYSE FORMATTERS PRIMARILY CONCERNING NET CAPITAL CALCULATIONS RELATEDTO INCOMPLETE RECEIPT OF MUTUAL FUND DATA IN CONNECTION WITHTHE FIRM'S ACQUISITION OF ANOTHER BROKER/DEALER. AT NO TIMEWAS THERE A DEFICIENCY IN EITHER THE FIRM'S BOOKS AND RECORDSOR NET CAPITAL.Current Status:FinalResolution Date:07/11/2003Resolution:Stipulation and Consent187©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:Sanction Details:CONSENT TO CENSURE, $500,000.00 FINE AND A REQUIREMENT TOCOMPLY WITH TWO UNDERTAKINGS.Sanctions Ordered:CensureMonetary/Fine $500,000.00Disclosure 67 of 92iReporting Source:RegulatorInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Principal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Date Initiated:03/31/2000Docket/Case Number:CMS000063Principal Product Type:Equity - OTCOther Product Type(s):Allegations: NASD RULE 4613(E)- RESPONDENT MEMBER, A MARKET MAKER INSECURITIES, WITHOUT MAKING REASONABLE EFFORTS TO AVOID ALOCKED MARKET BY EXECUTING TRANSACTIONS WITH ALL MARKETMAKERS WHOSE QUOTATIONS WOULD BE LOCKED, ENTERED A BID ORASK QUOTATION IN THE NASDAQ STOCK MARKET WHICH CAUSED ALOCKED MARKET CONDITION TO OCCUR IN EACH INSTANCE.Current Status:FinalResolution Date:03/31/2000Resolution:Other Sanctions Ordered:Sanction Details:FINED $3,000.Sanctions Ordered:Monetary/Fine $3,000.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmCurrent Status:Final188©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:NASDPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Date Initiated:11/16/1999Docket/Case Number:CMS-000063AWCPrincipal Product Type:Equity - OTCOther Product Type(s):Allegations:ALLEGED VIOLATION OF NASD MARKETPLACE RULE 4613(E) CAUSED ALOCKED OR CROSSED MARKED CONDITION.Resolution Date:03/31/2000Resolution:Other Sanctions Ordered:Sanction Details:ON 4/26/00 A FINE OF $3000.00 WAS PAID.Firm StatementA LETTER OF ACCEPTANCE WAIVER AND CONSENT WAS ACCEPTED BYNASD REGULATION, INC'S. OFFICE OF DISCIPLINARY AFFAIRS AND THENATIONAL ADJUDICATORY COUNCIL ON 3/31/00. A $3000.00 FINE WAS PAID.Sanctions Ordered:Monetary/Fine $3,000.00Acceptance, Waiver & Consent(AWC)Disclosure 68 of 92iReporting Source:RegulatorInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Date Initiated:04/04/2000Docket/Case Number:C10000042Allegations:MSRB RULES G-8 AND G-36 - RESPONDENT MEMBER SERVED AS SOLE ORMANAGING UNDERWRITER IN PRIMARY OFFERINGS OF MUNICIPALSECURITIES AND FAILED TO SUBMIT OFFICIAL STATEMENTS AND/OROTHER DOCUMENTS TO THE MUNICIPAL SECURITIES RULEMAKINGBOARD AS REQUIRED; AND FAILED TO SEND DOCUMENTS BY CERTIFIEDOR REGISTERED MAIL, OR SOME OTHER PROMPT MEANS TO THE MSRBAND FAILED TO MAINTAIN THESE RECORDS AS REQUIRED.Current Status:Final189©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Principal Product Type:OtherOther Product Type(s):Resolution Date:04/04/2000Resolution:Other Sanctions Ordered:Sanction Details:FINED $2,500Sanctions Ordered:Monetary/Fine $2,500.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmInitiated By:NASDPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Date Initiated:11/16/1999Docket/Case Number:C10000042Principal Product Type:Debt - MunicipalOther Product Type(s):Allegations:ALLEGED VIOLATION OF MSRB RULES G36 AND G8(A)(XV). THE TIMELYSUBMISSION OF OFFICAL STATEMENTS.Current Status:FinalResolution Date:04/04/2000Resolution:Other Sanctions Ordered:Sanction Details:ON 4/19/00 A FINE OF $2500.00 WAS PAID.Firm StatementA LETTER OF ACCEPTANCE WAIVER AND CONSENT WAS ACCEPTED BYSanctions Ordered:Monetary/Fine $2,500.00Acceptance, Waiver & Consent(AWC)190©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceNASD, REGULATION INC'S. OFFICE OF DISCIPLINARY AFFAIRS AND THENATIONAL ADJUDICATORY COUNCIL ON 4/4/00. A FINE OF $2500.00 WASPAID.Disclosure 69 of 92iReporting Source:FirmInitiated By:CHICAGO BOARD OPTIONS EXCHANGEPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Date Initiated:08/13/1986Docket/Case Number:87-0006Principal Product Type:OptionsOther Product Type(s):Allegations:BASED UPON CBOE'S FINDING OF FACTS: ON AUGUST 13,1986 VINERFAILED TO SUBMIT TO THE EXCHANGE ON BEHALF OF ONE OF ITS NON-MEMBER CUSTOMERS A CBOE EXCERCISE ADVICE FORM. AND VINERFAILED TO TIME STAMP THE INTERNAL EXCERCISE NOTICE IT PREPAREDFOR 400 S&P 100, AUG 220 CALL OPTION CONTRACTS.Current Status:FinalResolution Date:07/09/1987Resolution:Other Sanctions Ordered:Sanction Details:THE COMMITTEE ACCEPTED VINER'S OFFER OF SETTLEMENT IN WHICH ITNEITHER ADMITS OR DENIES THE VIOLATIONS ALLEGED. THE COMMITTEEBELIEVED IT'S APPROPRIATE TO ACCEPT VINER'S OFFER OF SETTLEMENTWHEREIN VINER WAS FINED $500.00Sanctions Ordered:Monetary/Fine $500.00SettledDisclosure 70 of 92iReporting Source:FirmAllegations:SPECIFIC VIOLATIONS OF THE RULES OF FAIR PRACTICE IN TWOCurrent Status:Final191©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:NASD DISTRICT BUSINESS CONDUCT COMMITTEE (DISTRICT 12)Principal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Date Initiated:10/31/1974Docket/Case Number:NY-1880Principal Product Type:No ProductOther Product Type(s):SEPARATE CAUSES AND VIOLATIONS OF ARTICLE III SECTION I AND "FREERIDING" AND "WITHHOLDING" INTERPRETATION.Resolution Date:01/30/1976Resolution:Other Sanctions Ordered:Sanction Details:THE COMMITTEE DISMISSED THE COMPLAINT AGAINST MR. BLANK.Sanctions Ordered:SettledDisclosure 71 of 92iReporting Source:RegulatorAllegations: NASD RULES 2110, 2320, 3010 AND SEC RULES 10B-10 AND 11AC1-4 -RESPONDENT MEMBER FAILED TO CONTEMPORANEOUSLY EXECUTE ORPARTIALLY EXECUTE A CUSTOMER LIMIT ORDER AFTER TRADING IN THESAME SECURITY FOR ITS OWN ACCOUNT AT PRICES THAT WOULD HAVESATISFIED THE CUSTOMER LIMIT ORDER; FAILED TO USE REASONABLEDILIGENCE TO ASCERTAIN THE BEST INTER-DEALER MARKET FOR THEFIRM THAT THE RESULTANT PRICE TO ITS CUSTOMERS WAS ASFAVORABLE AS POSSIBLE UNDER PREVAILING MARKET CONDITIONS;PREPARED A CUSTOMER CONFIRMATION THAT FAILED TO DISCLOSE THATTHE PRICE FOR THE SECURITY WAS AN AVERAGE PRICE. THE "REPORTEDPRICE" ON THE CONFIRMATION WAS NOT REPORTED TO NASDAQ, BUTWAS RATHER AN AVERAGE PRICE OF SEVERAL TRANSACTIONS EACH OFWHICH WAS REPORTED TO NASDAQ SEPARATELY; FAILED TO DISCLOSETHAT IT WAS ACTING IN THE CAPACITY OF A MARKET MAKER; FAILED TODISPLAY IMMEDIATELY CUSTOMER LIMIT ORDERS IN WHEN EACH SUCHORDER WAS AT A PRICE THAT WOULD HAVE IMPROVED ITS BID OR OFFERCurrent Status:Final192©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERSPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:10/29/1999Docket/Case Number:CMS990129Principal Product Type:Equity - OTCOther Product Type(s):IN EACH SUCH SECURITY, OR WHEN THE FULL SIZE OF EACH SUCHORDER WAS PRICED EQUAL TO THE FIRM'S BID OR OFFER AND THENATIONAL BEST BID OR OFFER FOR EACH SUCH SECURITY, ANDREPRESENTED MORE THAN A DE MINIMIS CHARGE IN RELATION TO THESIZE ASSOCIATED WITH ITS BID OR OFFER IN EACH SUCH SECURITY; AND,FAILED TO ESTABLISH, MAINTAIN AND ENFORCE ADEQUATE WRITTENSUPERVISORY PROCEDURES REASONABLY DESIGNED TO ACHIEVECOMPLIANCE WITH REGARD TO ANNUAL REVIEWS, MARK UPS AND MARKDOWN, REGISTRATION OF TRADING PERSONNEL, SOES ORDERELIGIBILITY, AND HARASSMENT.Resolution Date:10/29/1999Resolution:Other Sanctions Ordered:Sanction Details:NONESanctions Ordered:CensureMonetary/Fine $14,000.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmInitiated By:NASDDate Initiated:10/20/1999Allegations:ALLEGED VIOLATIONS OF NASD CONDUCT RULE 2110 & IM-2110-2, NASDCONDUCT RULE 2320, SEC RULE 10B-10, 11AC1-4 LIMIT ORDERPROTECTION BEST EXECUTION, ORDER HANDLING & DEFICIENT WRITTENSUPERVISORY PROCEDURES.Current Status:Final193©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:CENSUREDocket/Case Number:Principal Product Type:Equity - OTCOther Product Type(s):Resolution Date:10/29/1999Resolution:Other Sanctions Ordered:Sanction Details:ON 10/29/99 THE FIRM WAS CENSURED AND A $14000.00 FINE WAS PAID.Firm StatementA LETTER OF ACCEPTANCE WAIVER AND CONSENT WAS EXCEPTED BYNASD REGULATION, INC'S OFFICE OF DISCIPLINARY AFFAIRS AND THENATIONAL ADJUDICATORY COUNCIL ON 10/29/99 THE FIRM WASCENSURED AND A $14000.00 FINE WAS PAID.Sanctions Ordered:CensureMonetary/Fine $14,000.00Acceptance, Waiver & Consent(AWC)Disclosure 72 of 92iReporting Source:RegulatorInitiated By:KANSAS SECURITIES COMMISSIONERPrincipal Sanction(s)/ReliefSought:Date Initiated:02/02/1998Docket/Case Number:97-3312/98E162URL for Regulatory Action:Principal Product Type:Other Product Type(s):Allegations:ON 2/2/98, A NOTICE OF INTENT TO INVOKEADMINISTRATIVE SANCTIONS WAS FILED. THE TYPES OF ALLEGEDVIOLATIONS WERE FAILURE TO SUPERVISE, UNAUTHORIZEDTRANSACTIONS, AND MISREPRESENTATIONS.Current Status:Final194©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanction(s)/ReliefSought:Resolution Date:01/29/1999Resolution:Other Sanctions Ordered:Sanction Details:ON 1/26/99, A STIPULATION FOR CONSENT ORDER WASSIGNED. THIS STIPULATION OFFERED A TOTAL OF $15,600 TO THREECUSTOMERS OF FORMER AGENT STEVE WAGES. A CONSENT ORDER WASISSUED 1/29/99 WHICH CENSURED AND FINED FAHNESTOCK $10,000.Regulator StatementCONTACT: DAVE RUHNKE; 785-296-3307Sanctions Ordered:CensureMonetary/Fine $10,000.00ConsentiReporting Source:FirmInitiated By:KANSAS SECURITIES COMMISSIONERPrincipal Sanction(s)/ReliefSought:CensureOther Sanction(s)/ReliefSought:Date Initiated:02/02/1998Docket/Case Number:97-3312/98E162Principal Product Type:No ProductOther Product Type(s):Allegations:ON 2/2/98 A NOTICE OF INTENT TO INVOKE ADMINISTRATIVE SANCTIONSWAS FILED. ALLEGATIONS OF A VIOLATION OF FAILURE TO SUPERVISE,UNAUTHORIZED TRANSACTIONS AND MISREPRESENTATIONS.Current Status:FinalResolution Date:01/29/1999Resolution:Other Sanctions Ordered:Sanctions Ordered:CensureMonetary/Fine $10,000.00Consent195©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSanction Details:ON 1/26/99 A STIPULATION FOR CONSENT ORDER WAS SIGNED. THISSTIPULATION OF $15,600. TO THREE CUSTOMERS OF FORMER AGENTSTEVE WAGES. A CONSENT ORDER WAS ISSUED ON 1/29/99 WHICHCENSURED AND FINED THE FIRM $10,000Disclosure 73 of 92iReporting Source:RegulatorInitiated By:GEORGIA SECRETARY OF STATE SECURITIESDIVISIONPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:01/06/1993Docket/Case Number:50-92-0505URL for Regulatory Action:Principal Product Type:Other Product Type(s):Allegations:FAHNSTOCK FAILED TO SUPERVISE THEIR SALESMANALLOWING THEM TO SELL SECURITIES BEFORE THEY BECAMEREGISTEREDCurrent Status:FinalResolution Date:01/06/1993Resolution:Other Sanctions Ordered:Sanction Details:Not ProvidedRegulator StatementFAHNSTOCK & CON., INC. ALLOWED THEIR SALESMAN TOOFFER FOR SALE AND SELLS SECURITIES TO RESIDENTS OF THE STATEOF GEORGIA PRIOR TO BECOMING REGISTERED WITH THECOMMISSIONEROF SECURITIES.Sanctions Ordered:Cease and Desist/InjunctionOrderiReporting Source:Firm196©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:GEORGIA SECRETARY OF STATE , SECURITIES DIVISIONPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Date Initiated:01/06/1993Docket/Case Number:50-92-05-05Principal Product Type:No ProductOther Product Type(s):Allegations:FAILURE TO SUPERVISECurrent Status:FinalResolution Date:01/06/1993Resolution:Other Sanctions Ordered:Sanction Details:CEAST AND DESIST DECISION.Sanctions Ordered:Cease and Desist/InjunctionSettledDisclosure 74 of 92iReporting Source:RegulatorInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Principal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Date Initiated:06/18/1998Docket/Case Number:C10970151Principal Product Type:No ProductOther Product Type(s):Allegations:(MSRB RULE G-37 - RESPONDENT MEMBER FAILED TO DISCLOSE ONFORMS G-37 NEGOTIATED UNDERWRITINGS IN WHICH IT PARTICIPATED ASA SYNDICATE MEMBER; AND, FAILED TO TIMELY SUBMIT FORMS G-37).Current Status:Final197©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanction(s)/ReliefSought:Resolution Date:06/18/1998Resolution:Other Sanctions Ordered:Sanction Details:ON JUNE 18, 1998, DISTRICT NO. 10 NOTIFIED RESPONDENTFAHNESTOCK & CO., INC. THAT THE LETTER OF ACCEPTANCE, WAIVERAND CONSENT NO. C10970151 WAS ACCEPTED; THEREFORE,RESPONDENT MEMBER IS CENSURED AND FINED $500 -Sanctions Ordered:CensureMonetary/Fine $500.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Principal Sanction(s)/ReliefSought:CensureOther Sanction(s)/ReliefSought:FINEDate Initiated:06/18/1998Docket/Case Number:C10970151Principal Product Type:No ProductOther Product Type(s):Allegations:MSRB RULE G-37, THE FIRM FAILED TO DISCLOSE ON FORMS G-37NEGOTIATED UNDERWRITINGS IN WHICH IT PARTICIPATED AS ASYNDICATE MEMBER; AND FAILED TO TIMELY SUBMIT FORMS G-37.Current Status:FinalResolution Date:06/18/1998Resolution:Other Sanctions Ordered:Sanction Details:CENSURE AND FINE OF $500.00 WAS PAID ON 7/20/98.Sanctions Ordered:CensureMonetary/Fine $500.00Consent198©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisclosure 75 of 92iReporting Source:RegulatorInitiated By:Not ProvidedPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:03/20/1998Docket/Case Number:HPD 98-48Principal Product Type:Other Product Type(s):Allegations:Not ProvidedCurrent Status:FinalResolution Date:06/26/1998Resolution:Other Sanctions Ordered:Sanction Details:Not ProvidedRegulator Statement*6/26/98*THE DECISION IS FINAL AND EFFECTIVEIMMEDIATELY. CONTACT: PEGGY GERMINO (212) 656-8450Sanctions Ordered:CensureMonetary/Fine $100,000.00Stipulation and ConsentiReporting Source:FirmInitiated By:DIVISION OF ENFORCEMENT, NEW YORK STOCK EXCHANGEDate Initiated:08/01/1997Docket/Case Number:98-48Allegations:VARIOUS DEFIENCIES IN ADHERANCE TO RULES AND REGULATIONARISING OUT OF ROUTINE SALES PRACTICE AND OPERATIONSEXAMINATIONSCurrent Status:Final199©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Principal Product Type:No ProductOther Product Type(s):Resolution Date:05/12/1998Resolution:Other Sanctions Ordered:Sanction Details:IN MAY, 1998 THE NEW YORK STOCK EXCHANGE, INC. (THE "EXCHANGE")ACCEPTED A STIPULATION OF FACTS AND CONSENT TO PENALTYENTERED INTO WITH THE FIRM WITHOUT ITS ADMITTING OR DENYINGVIOLATION OF CERTAIN NYSE RULES AND SEC REGULATIONS. THE FIRMAGREED TO A FINE OF $100,000 AND AN UNDERTAKING TO RETAIN ACONSULTANT TO REVIEW CERTAIN OF THE FIRM'S SYSTEMS, POLICIESAND PROCEDURES.Sanctions Ordered:Monetary/Fine $100,000.00SettledDisclosure 76 of 92iReporting Source:RegulatorInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Principal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:04/23/1997Docket/Case Number:CMS960202Principal Product Type:Other Product Type(s):Allegations:Current Status:FinalResolution Date:04/23/1997Resolution:Acceptance, Waiver & Consent(AWC)200©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:Sanction Details:Regulator StatementLETTER OF ACCEPTANCE, WAIVER & CONSENT NO. CMS960202 AWC. ONAPRIL 23, 1997, FAHNESTOCK & CO., INC. (FAHN) WAS NOTIFIED THATTHE LETTER OF ACCEPTANCE, WAIVER & CONSENT (AWC) IT SUBMITTEDWAS ACCEPTED BY THE MARKET REGULATION AND THE NATIONALBUSINESSCONDUCT COMMITTEES. FAHN IS ALLEGED TO HAVE VIOLATEDMARKETPLACE RULE 4613(e) FOR ENTERING OR MAINTAININGQUOTATIONSIN THE NASDAQ STOCK MARKET, DURING NORMAL BUSINESS HOURS,WHICHCAUSED A LOCKED MARKET CONDITION TO OCCUR IN THREESECURITIES.FAHN IS HEREBY FINED $2,000.***$2,000.00 PAID ON 6/2/97, INVOICE #97-MS-434***Sanctions Ordered:Monetary/Fine $2,000.00iReporting Source:FirmInitiated By:NATIONAL ASSOCIATION OF SECURITES DEALERS, INC.Principal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:FINEDDate Initiated:04/23/1997Docket/Case Number:CMS960202Principal Product Type:Equity Listed (Common & Preferred Stock)Other Product Type(s):Allegations:AN AWC WAS RECEIVED ON 4/23/1997, ALLEGING THAT THE FIRMVIOLATED RULE 4613(E) FOR ENTERING OR MAINTAINING QUOTATIONS INTHE NASDAQ STOCK MARKET DURING NORMAL BUSINESS HOURS WHICHCAUSED A LOCKED MARKET CONDITION TO OCCUR IN THREESECURITIES.Current Status:FinalResolution:Acceptance, Waiver & Consent(AWC)201©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceResolution Date:04/23/1997Other Sanctions Ordered:Sanction Details:A FINE OF 2000.00 WAS PAID ON 6/2/97.Sanctions Ordered:Monetary/Fine $2,000.00Disclosure 77 of 92iReporting Source:RegulatorInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Principal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Date Initiated:04/23/1997Docket/Case Number:CMS960226Principal Product Type:OtherOther Product Type(s):Allegations:FAHN IS ALLEGED TO HAVE VIOLATED SEC RULE 17A-3 AND NASDCONDUCT RULE 3010. FAHN RECORDED AN INACCURATE EXECUTIONTIME ON ORDER TICKETS FOR 215 TRANSACTIONS AND FAILED TOCREATE RECORDS SHOWING THE ENTRY OF TWO ORDERS. IN ADDITION,FAHN FAILED TO ESTABLISH AND MAINTAIN WRITTEN SUPERVISORYPROCEDURES DESIGNED TO DETECT AND DETERTRADE REPORTING FUNCTIONS.Current Status:FinalResolution Date:04/23/1997Resolution:Other Sanctions Ordered:Sanction Details:LETTER OF ACCEPTANCE, WAIVER AND CONSENT NO. CMS960226 AWC.ON APRIL 23, 1997, FAHNESTOCK & COMPANY, INC. (FAHN) WAS NOTIFIEDTHAT THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) ITSUBMITTED WAS ACCEPTED BY THE MARKET REGULATION AND THENATIONAL BUSINESS CONDUCT COMMITTEES. FAHN IS HEREBY FINED$10,000.Sanctions Ordered:Monetary/Fine $10,000.00Acceptance, Waiver & Consent(AWC)202©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceiReporting Source:FirmInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Principal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:FINEDDate Initiated:04/23/1997Docket/Case Number:CMS960226Principal Product Type:No ProductOther Product Type(s):Allegations:AWC RECEIVED ON 4/23/97 BY THE MARKET REGULATION AND THENATIONAL BUSINESS CONDUCT COMMITTEES. IT WAS ALLEGED THAT THEFIRM HAD VIOLATED SEC RULE 17A-3 AND NASD CONDUCT RULE 3010. ANINACCURATE EXECUTION TIME ON ORDER WAS RECORDED.Current Status:FinalResolution Date:04/23/1997Resolution:Other Sanctions Ordered:Sanction Details:FINE OF $10,000 WAS PAID ON 6/6/97.Sanctions Ordered:Monetary/Fine $10,000.00Acceptance, Waiver & Consent(AWC)Disclosure 78 of 92iReporting Source:RegulatorInitiated By:UNITED STATES SECURITIES AND EXCHANGE COMMISSIONDate Initiated:09/30/1996Allegations:THE COMMISSION ALLEGED THAT FROM FEBRUARY 1993 THROUGH MAY1994 FAHNESTOCK & CO., INC. ("FAHNESTOCK") FAILED REASONABLY TOSUPERVISE A FORMER REGISTERED REPRESENTATIVE WHOMISAPPROPRIATED MORE THAN $260,000 FROM THE BROKERAGEACCOUNTS OF TWO FORMER FAHNESTOCK CUSTOMERS.Current Status:Final203©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Cease and DesistOther Sanction(s)/ReliefSought:(1) CENSURE; AND (2) A CIVIL PENALTY.Docket/Case Number:REL. 34-43054; FILE #3-9122Principal Product Type:No ProductOther Product Type(s):Resolution Date:07/20/2000Resolution:Other Sanctions Ordered:ORDERS FAHNESTOCK TO COMPLY WITH CERTAIN UNDERTAKINGS,INCLUDING REVISING ITS INTERNAL COMPLIANCE PROCEDURESREGARDING THE DISBURSEMENT OF FUNDS FROM CUSTOMERS'ACCOUNTS AND CONDUCTING ADDITIONAL IN-HOUSE SEMINARS ONPROPER COMPLIANCE PROCEDURES.Sanction Details:(1) CENSURES FAHNESTOCK FOR ITS FAILURE TO REASONABLYSUPERVISE A FORMER REGISTERED REPRESENTATIVE; (2) CEASE ANDDESIST FROM COMMITTING OR CAUSING ANY FUTURE VIOLATIONS OFSECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE17A-3 THEREUNDER; AND (3) ORDERS FAHNESTOCK TO PAY A $20,000PENALTY.Regulator Statement10-02-96, SEC NEWS DIGEST ISSUE NO. 96-187, DATED 10/01/1996, ENFORCEMENT PROCEEDINGS DISCLOSE: THE SEC HASINSTITUTED PUBLIC ADMINISTRATIVE AND CEASE-AND-DESISTPROCEEDINGS AGAINST FAHNESTOCK AND CO., INC. (FAHNESTOCK), AREGISTERED BROKER-DEALER PURSUANT TO SECTIONS 15(B), 19(H) AND21C OF THE SECURITIES EXCHANGE ACT OF 1934. THE SEC'S ORDERALLEGES THAT FAHNESTOCK FAILED TO REASONABLY SUPERVISE AREGISTERED REPRESENTATIVE FORMERLY ASSOCIATED WITH THEJENKINTOWN, PENNSYLVANIA BRANCH OFFICE. THE ORDER ALSOALLEGES THAT FAHNESTOCK WILLFULLY VIOLATED THE RECORDKEEPING PROVISIONS OF SECTION 17(A) OF THE EXCHANGE ACT ANDRULES 17A-3 AND 17A-4 THEREUNDER. ** +07/24/2000+ SEC NEWS DIGEST,ISSUE NO. 2000-138, DATED 07/20/2000, ENFORCEMENT PROCEEDINGSDISCLOSES: THE SEC ANNOUNCED TODAY THAT REGISTERED BROKER-DEALER FAHNESTOCK & CO., INC. ("FAHNESTOCK") SETTLED ANADMINISTRATIVE PROCEEDING INSTITUTED BY THE SEC ON SEPTEMBER30, 1996. IN SETTLEMENT OF THESE PROCEEDINGS, FAHNESTOCK HASSanctions Ordered:CensureMonetary/Fine $20,000.00Cease and Desist/InjunctionConsent204©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceCONSENTED TO AN ORDER THAT CENSURES FAHNESTOCK FOR ITSFAILURE TO REASONABLY SUPERVISE A FORMER REGISTEREDREPRESENTATIVE, CEASE AND DESIST FROM COMMITTING OR CAUSINGANY FUTURE VIOLATIONS OF SECURITIES LAWS, ORDERS TO PAY A$20,000 PENALTY, AND ORDERS FAHNESTOCK TO COMPLY WITH CERTAINUNDERTAKINGS. THE ORDER ALSO RECOGNIZES CERTAINUNDERTAKINGS THAT FAHNESTOCK HAS ALREADY IMPLEMENTED TOPREVENT FUTURE VIOLATIONS, SUCH AS ASSIGNING A NEW COMPLIANCEMANAGER TO CONDUCT AN EXAMINATION OF FAHNESTOCK'SJENKINTOWN BRANCH OFFICE AND CONDUCTING REFRESHER TRAININGWITH EMPLOYEES ON SUPERVISORY AND COMPLIANCE PROCEDURESREGARDING THE DISBURSEMENT OF CUSTOMER FUNDS. (REL. 34-43054;FILE #3-9122)iReporting Source:FirmInitiated By:SECURITIES AND EXCHANGE COMMISSIONPrincipal Sanction(s)/ReliefSought:Cease and DesistOther Sanction(s)/ReliefSought:CENSURE, FINEDate Initiated:09/30/1996Docket/Case Number:96-187Principal Product Type:No ProductOther Product Type(s):Allegations:FIRM HAD INSUFFICIENT PROCEEDINGS IN PLACE WITH A VIEW TOWARDSPREVENTING WENDELL JEFFREY LEE'S FORGERY'S ANDMISAPPROPRIATION OF CUSTOMERS FUNDS.Current Status:FinalResolution Date:07/19/2000Resolution:Other Sanctions Ordered:Sanction Details:FIRM RESPONSIBLE FOR FULL AMOUNT OF FINE.Sanctions Ordered:CensureMonetary/Fine $20,000.00Cease and Desist/InjunctionDecision & Order of Offer of Settlement205©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceFirm StatementWENDELL JEFFREY LEE, A REGISTERED REPRESENTATIVE WITH BROKER-DEALER FROM JULY 1992 THROUGH MAY 1994, WAS CONVICTED OFFORGERY AND MISAPPROPRIATION OF CUSTOMER FUNDS. FAHNESTOCKVOLUNTARILY MADE FULL RESTITUTION TO ANY CLIENT AFFECTED.FAHNESTOCK WAS FOUND BY THE SEC TO HAVE FAILED TO REASONABLYSUPERVISE LEE, WITH A VIEW TO PREVENTING LEE'S VIOLATIONS.FAHNESTOCK AGREED, WITHOUT ADMITTING OR DENYING TO A CENSURE,A CEASE AND DESIST ORDER AND A FINE BY THE SEC OF $20,000.FAHNESTOCK FURTHER AGREED TO TAKE REMEDIAL STEPS TO SHORE UPITS PROCEDURES IN ORDER TO AVOID A SIMILAR OCCURANCE.Disclosure 79 of 92iReporting Source:RegulatorInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Principal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:04/28/1994Docket/Case Number:CMS-940036Principal Product Type:Other Product Type(s):Allegations:Current Status:FinalResolution Date:08/29/1994Resolution:Other Sanctions Ordered:Sanction Details:Regulator StatementMARKET SURVEILLANCE COMMITTEE COMPLAINT #CMS940036 AWCLETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) ALLEGESVIOLATIONS OF SECTION c)2(D) OF THE RULES OF PRACTICE ANDPROCEDURE FOR SOES IN THAT THE RESPONDENTS ENTERED ORDERSON ANSanctions Ordered:Monetary/Fine $800.00Acceptance, Waiver & Consent(AWC)206©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceAGENCY BASIS INTO SOES FOR SECURITIES IN WHICH THEY WEREREGISTERED MARKET MAKERS. THE COMPLAINT WAS FILED ON 4/28/94AND ACCEPTED BY THE NBCC ON 8/29/94, WHEREBY FAHNESTOCK & CO.,INC WAS FINED $800. THE AWC BECAME FINAL ON AUGUST 29, 1994.***$800 PAID ON 9/20/94 INVOICE #94-MS-576***iReporting Source:FirmInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Principal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:FINEDate Initiated:04/28/1994Docket/Case Number:CMS940036Principal Product Type:No ProductOther Product Type(s):Allegations:AWC LETTER ALLEGES VIOLATIONS OF SECTION C)2(D) OF THE RULES OFPRACTICE AND PROCEDURE FOR SOES IN THAT THE FIRM ENTEREDORDERS ON AN AGENCY BASIS INTO SOES FOR SECURITIES IN WHICHTHEY WERE REGISTERED MARKET MAKERS.Current Status:FinalResolution Date:08/29/1994Resolution:Other Sanctions Ordered:Sanction Details:AWC BECAME FINAL ON 8/29/94 A FINE OF $800.00 WAS PAID.Sanctions Ordered:Monetary/Fine $800.00Acceptance, Waiver & Consent(AWC)Disclosure 80 of 92iReporting Source:RegulatorInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Allegations:Current Status:Final207©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:03/07/1994Docket/Case Number:CMS940021Principal Product Type:Other Product Type(s):Resolution Date:06/02/1994Resolution:Other Sanctions Ordered:Sanction Details:Regulator StatementMARKET SURVEILLANCE COMMITTEE COMPLAINT #CMS940021 AWCLETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) ALLEGESVIOLATIONS OF ARTICLE III, SECTION 1 OF THE ASSOCIATION'S RULESOF FAIR PRACTICE IN THAT THE RESPONDENT UPDATED QUOTATIONS INTHE BULLETIN BOARD SYSTEM OUTSIDE THE ALLOWABLE TIME FORUPDATING FOREIGN OR ADR SECURITIES ON THE BULLETIN BOARD. THECOMPLAINT WAS FILED ON 3/07/94, AND ACCEPTED BY THE NBCC ON5/31/94 WHEREBY, FAHNESTOCK & CO, INC. WAS FINED $250. THE AWCBECAME FINAL ON 6/02/94.**$250 PAID ON 6/23/94 INVOICE #94-MS-417**Sanctions Ordered:Monetary/Fine $250.00Acceptance, Waiver & Consent(AWC)iReporting Source:FirmInitiated By:NATIONAL ASSOCIATION SECURITIES DEALERS, INC.Date Initiated:03/07/1994Allegations:AWC ALLEGES VIOLATIONS OF ARTICLE III, SECTION 1 OF THEASSOCIATION'S RULES OF FAIR PRACTICE IN THAT THE FIRM UPDATEDQUOTATIONS IN THE BULLETIN BOARD SYSTEM OUTSIDE THE ALLOWABLETIME FOR UPDATING FOREIGN OR ADR SECURITIES ON THE BULLETINBOARD.Current Status:Final208©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:FINEDocket/Case Number:CMS940021Principal Product Type:No ProductOther Product Type(s):Resolution Date:06/02/1994Resolution:Other Sanctions Ordered:Sanction Details:FINE OF 250.00 WAS PAID ON 6/23/94.Sanctions Ordered:Monetary/Fine $250.00Acceptance, Waiver & Consent(AWC)Disclosure 81 of 92iReporting Source:RegulatorInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Principal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:08/12/1993Docket/Case Number:CMS930042Principal Product Type:Other Product Type(s):Allegations:Current Status:FinalResolution Date:11/15/1993Resolution:Other Sanctions Ordered:Sanctions Ordered:Monetary/Fine $250.00Acceptance, Waiver & Consent(AWC)209©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSanction Details:Regulator Statement11/18/93: MARKET SURVEILLANCE COMMITTEE COMPLAINT #CMS930042(AWC) (A) LETTER OF ACCEPTANCE, WAIVER AND CONSENT FILEDAUGUST12, 1993; AGAINST RESPONDENT MEMBER FAHNESTOCK & CO., INC.ALLEGING VIOLATIONS OF ARTICLE III, SECTION 1 OF THEASSOCIATION'S RULES OF FAIR PRACTICE IN THAT THE RESPONDENTSUPDATED QUOTATIONS IN THE BULLETIN BOARD SYSTEM OUTSIDE THEALLOWABLE TIME FOR UPDATING FOREIGN OR ADR SECURITIES ON THEBULLETIN BOARD.THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT WAS ACCEPTED BYTHE MARKET SURVEILLANCE COMMITTEE ON OCTOBER 14, 1993 AND BYTHE NATIONAL BUSINESS CONDUCT COMMITTEE ON NOVEMBER 15, 1993.$250.00 FINED. ** $250.00 PAID ON 12/8/93 INVOICE #93-12-921**iReporting Source:FirmInitiated By:NATIONAL ASSOCIATION SECURITIES DEALERS, INC.Principal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:FINEDate Initiated:08/12/1993Docket/Case Number:CMS930042Principal Product Type:No ProductOther Product Type(s):Allegations:ALLEGING VIOLATIONS OF ARTICLE III, SECTION 1 OF THE ASSOCIATIONSRULES OF FAIR PRACTICE IN THAT WE UPDATED QUOTATIONS IN THEBULLETIN BOARD SYSTEM OUTSIDE THE ALLOWABLE TIME FOR UPDATINGFOREIGN SECURITIES ON THE BULLETIN BOARD.Current Status:FinalResolution Date:11/15/1993Resolution:Other Sanctions Ordered:Sanctions Ordered:Monetary/Fine $250.00Acceptance, Waiver & Consent(AWC)210©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSanction Details:250.00 FINE PAID ON 12/8/93Disclosure 82 of 92iReporting Source:RegulatorInitiated By:IOWA SECURITIES BUREAUPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:05/05/1993Docket/Case Number:C93-03-392URL for Regulatory Action:Principal Product Type:Other Product Type(s):Allegations:FILED AUDITED FINANCIALS LATECurrent Status:FinalResolution Date:05/05/1993Resolution:Other Sanctions Ordered:Sanction Details:$500.00 CIVIL PENALTYRegulator StatementFOR FURTHER INFORMATION, PLEASE CONTACT GARYMARQUETT, ENFORCEMENT DIRECTOR, 515-281-4441Sanctions Ordered:DecisioniReporting Source:FirmInitiated By:IOWA SECURITIES BUREAUDate Initiated:05/05/1993Docket/Case Number:C93-03-392Allegations:FIRM FILED AUDITIED FINANCIALS LATE.Current Status:Final211©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Principal Product Type:No ProductOther Product Type(s):Resolution Date:05/05/1993Resolution:Other Sanctions Ordered:Sanction Details:A CIVIL PENALTY OF $500.00 WAS PAID.Sanctions Ordered:Monetary/Fine $500.00SettledDisclosure 83 of 92iReporting Source:RegulatorInitiated By:MASSACHUSETTS SECURITIES DIVISIONDate Initiated:03/13/1992Docket/Case Number:E-90-118URL for Regulatory Action:Principal Product Type:Other Product Type(s):Allegations:FAHNESTOCK HAS BEEN A REGISTEREDBROKER-DEALER IN MASSACHUSETTS SINCE AT LEAST JULY 1981. PHILJACOB LIFSCHITZ WAS AN EMPLOYEE OF FAHNESTOCK AT ALL TIMESRELEVANT TO THE MATTERS REFERRED TO IN THE PROCEEDING. THEPRACTICE AT FAHNESTOCK WAS FOR CERTAIN AGENTS, INCLUDINGLIFSCHITZ TO "SHARE A BOOK". IN THESE ARRANGEMENTS, AGENTSSHARE CLIENTS AND THE COMMISSIONS GENERAED FROM SALES TOTHOSECLIENTS. BETWEEN DECEMBER, 1988 AND JANUARY, 1989 LIFSCHTIZSOLD SECURITIES OF THE ORIGINAL DIET PIZZA COMPANY TO THREEMASSACHUSETTS RESIDENT. HE DID NOT INFORM THESE INVESTORSTHATHE WAS NOT REGISTERED TO SELL SECURITIES IN MASSACHUSETTS.Current Status:Final212©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Resolution Date:06/28/1994Resolution:Other Sanctions Ordered:Sanction Details:Not ProvidedRegulator StatementON JUNE 28, 1994 THE MASSACHUSETTS SECURITIESDIVISION ENTERED AN ORDER INSTITUTING PROCEEDINGS, MAKINGFINDINGS AND IMPOSING SANCTIONS. FAHNESTOCK HA VOLUNTARILYUNDERTAKEN AND REPRESENTED THAT IT HAS AMENDED ITS INTERNALPROCEDURES TO PROHIBIT "BOOK-SHARING" ARRANGEMENTS ON ALLOFFERS AND SALES OF SECURITIES TO MASS RESIDENTS UNLESS ALL OFTHE AGENTS WHO PARTICIPATE IN THOSE ARRANGEMENTS AREREGISTEREDIN THE COMMONWEALTH; THEY WILL COMPLY WITH ALLSTATUTESAND REGULATIONS RELATING TO THE TRANSACTION OFBUSINESSIN SECURITIES IN MASSACHUSETTS; THEY WILL MAKE WRITTEN OFFERSOF RESCISSSION TO ALL MASS INVESTORS IN DIET PIZZA STOCK WHOPURCHASE SUCH SHARES FROM AN AGENT NOT THE DULY REGISTEREDWITHTHE DIVIISION AT THE TIME OF PURCHASE AND SHALL PROVIDE COPIESOF SUCH OFFERS AND THE RESPONSE TO THE DIVISION ANDFAHNESTOCKSHALL PAY TO THE DIVISION COSTS OF $3,500 AND PAY TO THEDIVISION A FINE OF $6,500. AS TO LIFSCHITZ HE SHALL PAY TO THEDIVISION A FINE OF $500. CONTACT: KERRY STELZER 617-727-3548Sanctions Ordered:Monetary/Fine $6,500.00DecisioniReporting Source:FirmInitiated By:MASSACHUSETTS SECURITIES DIVISIONDate Initiated:03/13/1992Allegations:WITH RESPECT TO THREE UNSOLICITED SALES IN 1989 TO RESIDENTS OFMASSACHUSETTS BY A REPRESENTATIVE WHO WAS NOT REGISTERED INMASSACHUSETTS.Current Status:Final213©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Docket/Case Number:E-90-118Principal Product Type:Equity Listed (Common & Preferred Stock)Other Product Type(s):Resolution Date:03/13/1992Resolution:Other Sanctions Ordered:Sanction Details:THE MATTER WAS RESOLVED BY ALLOWING CUSTOMERS TO RESCINDTHEIR TRANSACTION, RECEIVE A FULL REFUND OF THE PURCHASE PRICEALONG WITH INTEREST WHERE APPLICABLE. FAHNESTOCK PAID THEDIVISION COSTS OF $3500.00 AND A FINE OF $6500.00Sanctions Ordered:Monetary/Fine $6,500.00SettledDisclosure 84 of 92iReporting Source:RegulatorInitiated By:NEW YORK STOCK EXCHANGEPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:03/10/1989Docket/Case Number:Principal Product Type:Other Product Type(s):Allegations:Current Status:FinalResolution Date:03/10/1989Resolution:Decision214©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:Sanction Details:Regulator Statement^6/25/90^ SEC LITIGATION, ACTIONS AND PROCEEDINGS BULLETIN FORTHE QUARTER ENDING 6/30/89 (VOLUME 55, BULLETIN 02, PAGE 255)DISCLOSES: THE NEW YORK STOCK EXCHANGE FINED FAHNESTOCK & CO$2,500 ON MARCH 10, 1989 BASED ON A VIOLATION OF EXCHANGE RULE132.30 AND FAILED TO SUBMIT AUDIT TRAIL DATA TO QUALIFIEDCLEARING AGENCY REGARDING STOCK TRANS. FOR THE WEEKS OF 8/1,9/12 AND 10/17/88.Sanctions Ordered:Monetary/Fine $2,500.00iReporting Source:FirmInitiated By:NEW YORK STOCK EXCHANGEPrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:FINED 2500.00Date Initiated:03/10/1989Docket/Case Number:Principal Product Type:No ProductOther Product Type(s):Allegations:ALLEGED FAILURE TO SUBMIT AUDIT TRAIL DATA TO QUALIFIED CLEARINGAGENCY REGARDING STOCK TRANSACTIONS FOR THE WEEKS OF 8/1 AND9/12 AND 10/17/1988Current Status:FinalResolution Date:03/10/1989Resolution:Other Sanctions Ordered:Sanction Details:A VIOLATION OF EXCHANGE RULE 132.30 AND A FINE OF 2500.00 PAID ON3/10/89.Sanctions Ordered:Monetary/Fine $2,500.00DecisionDisclosure 85 of 92i215©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceReporting Source:RegulatorInitiated By:CHICAGO BOARD OPTIONS EXCHANGEPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:04/21/1987Docket/Case Number:87-0006Principal Product Type:Other Product Type(s):Allegations:Current Status:FinalResolution Date:04/21/1987Resolution:Other Sanctions Ordered:Sanction Details:Regulator Statement7/9/87-CBOE DECISION ACCEPTING OFFER OF SETTLEMENT IN THEMATTER OF: EDWARD A. VINER & CO., INC., RESPONDENT; FILE NO.87-0006. THIS PROCEEDING WAS INSTITUTED BY THE BUSINESS CONDUCTCOMMITTEE OF THE CBOE AS A RESULT OF AN INVESTIGATION BY THESTAFF OF THE EXCHANGE, WHICH INDICATED THAT THERE WASPROBABLECAUSE FOR FINDING A VIOLATION WITHIN THE DISCIPLINARYJURISDICTION OF THE EXCHANGE. IN SUBMITTING THIS OFFER OFSETTLEMENT, THE RESPONDENT NEITHER ADMITS NOR DENIES THEVIOLATIONS ALLEGED IN THE STATEMENT OF CHARGES. ON THE BASIS OFTHE STATEMENT OF CHARGES AND OFFER OF SETTLEMENT, THECOMMITTEEHAS DETERMINED TO ACCEPT THE RESPONDENT'S OFFER OFSETTLEMENTBASED UPON ITS FINDING OF THE FOLLOWING FACTS: ON AUGUST 13,1986, VINER FAILED TO SUBMIT TO THE EXCHANGE ON BEHALF OF ONEOF ITS NON-MEMBER CUSTOMERS A CBOE EXERCISE ADVICE FORM FORTHECUSTOMER'S EXERCISE OF 400 STANDARD & POOR'S 100 STOCK INDEXSanctions Ordered:Monetary/Fine $500.00Decision & Order of Offer of Settlement216©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser Guidance("OEX") AUG 220 CALL OPTION CONTRACTS. ON AUGUST 13, 1986,VINER FAILED TO TIME STAMP THE INTERNAL EXERCISE NOTICE ITPREPARED FOR THE EXERCISE OF THE OEX OPTION CONTRACTSREFERREDTO ABOVE. THE COMMITTEE HAS DETERMINED TO ACCEPT THERESPONDENT'S OFFER OF SETTLEMENT BASED UPON ITS MAKING THEFOLLOWING CONCLUSIONS: THE ACTS, PRACTICES AND CONDUCTDESCRIBED ABOVE CONSTITUTE SEPARATE VIOLATIONS OF EXCHANGERULE11.1 BY VINER. WITH DUE REGARD FOR THE PARTICULAR FACTS OF THISMATTER, THE COMMITTEE BELIEVES IT APPROPRIATE TO ACCEPT THERESPONDENT'S OFFER OF SETTLEMENT WHEREIN IT CONSENTS TO A$500FINE FOR THE CONDUCT DESCRIBED ABOVE. ACCORDINGLY IT ISORDERED, THAT THE RESPONDENT, EDWARD A. VINER & CO., INC.,SHALL BE AND HEREBY IS FINED IN THE AMOUNT OF $500. ORDER DATEDAPRIL 21, 1987.iReporting Source:FirmInitiated By:CHICAGO BOARD OPTIONS EXCHANGEPrincipal Sanction(s)/ReliefSought:OtherOther Sanction(s)/ReliefSought:FINEDate Initiated:04/21/1987Docket/Case Number:87-0006Principal Product Type:OptionsOther Product Type(s):Allegations:VINER FAILED TO SUBMIT TO THE EXCHANGE ON BEHALF OF ONE OF IT'SNON-MEMBER CUSTOMERS A CBOE EXCERCISE ADVICE FOR THECUSTOMERS EXCERCISE OF 400 S&P 10 STOCK INDEX AUG 220 CALLOPTION CONTRACTS.Current Status:FinalResolution Date:04/21/1987Resolution:Sanctions Ordered:Monetary/Fine $500.00Decision & Order of Offer of Settlement217©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:Sanction Details:AN OFFER OF SETTLEMENT WHERIN VINER CONSENTS TO A $500.00 FINE.Disclosure 86 of 92iReporting Source:RegulatorInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Principal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:12/09/1986Docket/Case Number:MS-456-AWCPrincipal Product Type:Other Product Type(s):Allegations:Current Status:FinalResolution Date:04/23/1987Resolution:Other Sanctions Ordered:Sanction Details:Regulator StatementMARKET SURVEILLANCE COMMITTEE COMPLAINT #MS-456-AWC:LETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) WAS FILED ONDECEMBER 9, 1986, ALLEGING VIOLATIONS OF PART I, SECTIONC.3.(a) OF SCHEDULE D OF THE ASSOCIATION'S BY-LAWS IN THATRESPONDENT (EDWARD A. VINER & CO., INC.) ENTERED QUOTATIONS INTO THE NASDAQ SYSTEM ON 9/29/86, 10/2/86, AND 10/3/86 THATWERE NOT REASONABLY RELATED TO THE PREVAILING MARKET. THE AWCWAS ACCEPTED BY THE MARKET SURVEILLANCE COMMITTEE ON MARCH2,1987 AND BY THE NATIONAL BUSINESS CONDUCT COMMITTEE ON APRIL23, 1987. $1,000 FINE RECEIVED 1/23/87Sanctions Ordered:Monetary/Fine $1,000.00Acceptance, Waiver & Consent(AWC)i218©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceReporting Source:FirmInitiated By:NASDPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Date Initiated:12/09/1986Docket/Case Number:Principal Product Type:No ProductOther Product Type(s):Allegations:ALLEGED VIOLATIONS OF PART I SECTION C,3.(A) OF SCHEDULE D OF THEASSOCIATIONS BYLAWS IN THAT VINER ENTERED QUOTATIONS I ON THENASDAQ SYSTEM ON 9/29/86,10/2/86, AND 10/3/86 THAT WERE NOTREASONABLY RELATED TO THE PREVAILING MARKET.Current Status:FinalResolution Date:03/02/1987Resolution:Other Sanctions Ordered:Sanction Details:A LETTER OF ACCEPTANCE, WAIVER AND CONSENT WAS ACCEPTED BYTHE MARKET SURVEILLANCE COMMITTEE ON 3/2/87 AND BY THENATIONAL BUSINESS CONDUCT COMMITTEE ON 4/23/87. A FINE OF$1000.00 WAS PAID.Sanctions Ordered:Monetary/Fine $1,000.00SettledDisclosure 87 of 92iReporting Source:RegulatorInitiated By:NEW YORK STOCK EXCHANGEDate Initiated:04/06/1982Docket/Case Number:82-30 AND 82-31Principal Product Type:Allegations:Current Status:Final219©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Other Product Type(s):Resolution Date:04/06/1982Resolution:Other Sanctions Ordered:Sanction Details:Regulator StatementNEW YORK STOCK EXCHANGE DECISION 82-30 AND 82-31APRIL 6, 1982AN EXCHANGE HEARING PANEL ACCEPTED A STIPULATION OF FACTS ANDCONSENT TO PENALTY AGREEMENT ENTERED BETWEEN THE EXCHANGESTAFFAND EDWARD A VINER & COMPANY AND STEPHEN H. BLITTNER, A FORMERBOND CLERK WITH THAT FIRM. WITHOUT ADMITTING OR DENYING THEALLEGATIONS, THE RESPONDENTS CONSENTED TO THE FINDINGS THAT:BLITTNER HAD VIOLATED SECTION 10(b) OF THE SEC ACT OF 1934 ANDRULE 10b-5 THEREUNDER IN CONNECTION WITH THE PURCHASE ANDSALEOF CERTAIN BONDS; VIOLATED EXCHANGE RULE 476(a)(8) IN THAT HEUSED ANOTHER FIRM'S AUTOMATIC BOND SYSTEM TERMINAL TO MAKEANDENTER A FICTITIOUS SELL ORDER; VIOLATED EXCHANGE RULE 410 ANDSECTION 17a-3 AND 17a-4 OF THE 1934 ACT AND RULES THEREUNDER,IN THAT HE DESTROYED REPORTS OF EXECUTION OF CERTAIN BONDTRADES; AND VIOLATED EXCHANGE RULE 120 IN THAT HE EXERCISEDDISCRETION IN ENTERING BIDS AND OFFERS FOR THE PURCHASE ORSALEOF CERTAIN BONDS. THE FIRM WAS FOUND TO HAVE VIOLATEDEXCHANGERULE 343(b) IN CONNECTION WITH SUPERVISION AND CONTROL OFACTIVITIES OF ITS EMPLOYEE; VIOLATED EXCHANGE RULE 54 IN THAT ITPERMITTED AN EMPLOYEE WHO WAS NOT A MEMBER OF THE EXCHANGETOTRANSACT BUSINESS ON THE BOND FLOOR, AND VIOLATED EXCHANGERULE120 IN THAT IT FAILED TO ADHERE TO THE PRINCIPLES OF GOODPRACTICES IN THE CONDUCT OF ITS BUSINESS AFFAIRS IN THECONNECTION WITH THE PURCHASES AND SALES OF CERTAIN BONDS.Sanctions Ordered:Monetary/Fine $25,000.00Stipulation and Consent220©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceTHERESPONDENTS CONSENTED TO THE PENALTY FOR BLITTNER, WHICHWAS ACENSURE, A 19 MONTH SUSPENSION FROM EMPLOYMENT ON THE FLOOR,AFURTHER SUSPENSION FROM EMPLOYMENT WITH A BROKER-DEALERFOR TWOYEARS AND A TWELVE MONTH PROBATIONARY PERIOD. THE FIRMCONSENTEDTO A $25,000 FINE AND ANCILLARY REQUIREMENTS WHEREBY THE FIRMHAS AGREED TO: 1)WITHDRAWAL OF ITS EMPLOYEES FROM THE BONDFLOOROF THE EXCHANGE; PREPARATION, ADOPTION AND CIRCULATION OF NEWWRITTEN POLICIES DESIGNED TO ASSURE COMPLIANCE WITH ALLEXCHANGERULES INVOLVING THE SUPERVISI*See FAQ #1*iReporting Source:FirmInitiated By:NEW YORK STOCK EXCHANGEPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Date Initiated:04/06/1982Docket/Case Number:Principal Product Type:No ProductOther Product Type(s):Allegations:AN EXCHANGE HEARING PANEL OF THE NYSE RENDERED DECISIONS 82-30 AND 82-31 WHICH ADOPTED A STIPULATION OF FACTS AND CONSENTTO PENALTY ENTERED AMONG THE EXCHANGE, VINER AND A FORMERBOND CLERK OF VINER'S. VINER WAS FOUND TO HAVE FAILED TPPROPERLY SUPERVISE CLERK, WHICH LED TO A FINE OF $25,000 ANDSUBJECT TO CERTAIN ANCILLARY REQUIREMENTS.Current Status:FinalResolution Date:04/06/1982Resolution:Sanctions Ordered:Monetary/Fine $25,000.00Settled221©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:Sanction Details:A FINE OF $25,000.00 WAS PAID ON 4/6/82.Disclosure 88 of 92iReporting Source:RegulatorInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Principal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:11/18/1976Docket/Case Number:N-VS-235Principal Product Type:OtherOther Product Type(s):UNKNOWNAllegations:NASDAQ COMPLAINT #N-VS-235 FILED 11/18/76Current Status:FinalResolution Date:11/18/1976Resolution:Other Sanctions Ordered:Sanction Details:DUE TO THE AGE OF THIS MATTER, THE FINAL DISPOSITION COULD NOTBE OBTAINED.Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?NoSanctions Ordered:OtheriReporting Source:FirmAllegations:NO ALLEGATIONS ARE SPECIFIED DUE TO THE AGE OF THIS ACTION.Current Status:Final222©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceInitiated By:NASDAQPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Date Initiated:11/18/1976Docket/Case Number:N-VS-235Principal Product Type:No ProductOther Product Type(s):Resolution Date:11/18/1976Resolution:Other Sanctions Ordered:Sanction Details:NO FURTHER INFORMATION IS OBTAINABLESanctions Ordered:OtherDisclosure 89 of 92iReporting Source:RegulatorInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Principal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:10/30/1970Docket/Case Number:NY-1309Principal Product Type:Other Product Type(s):Allegations:Current Status:FinalResolution Date:10/31/1971Resolution:Decision223©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:Sanction Details:Regulator StatementCOMPLAINT #NY-1309 FILED 10/30/70DECISION RENDERED 1/13/71 WHEREIN RESPONDENT MEMBER IS FINED$1,000. TO BE FINAL 2/12/71.ON 2/12/71 COMPLAINT WAS CALLED BEFORE THE B/G FOR REVIEW.DBCC DECISION IS STAYED.B/G DECISION RENDERED 10/1/71 WHEREIN FINDINGS MADE BY DBCCARE AFFIRMED BUT PENALTIES ARE INCREASED. RESPONDENT MEMBERIS CENSURED AND FINED $1,500. J&STO BE FINAL - 10/31/71PAID - 11/18/71Sanctions Ordered:CensureMonetary/Fine $1,500.00iReporting Source:FirmInitiated By:NATIONAL ASSOCIATION SECURITIES DEALERS, INC.Principal Sanction(s)/ReliefSought:CensureOther Sanction(s)/ReliefSought:FINEDDate Initiated:10/30/1970Docket/Case Number:NY-1309Principal Product Type:No ProductOther Product Type(s):Allegations:FINDINGS MADE BY THE DBCC. DUE TO THE AGE OF THIS OCCURANCENO ADDITIONAL INFORMATION IS OBTAINABLE.Current Status:FinalResolution Date:10/31/1971Resolution:Other Sanctions Ordered:Sanction Details:CENSURE AND FIND PAID 1500.00 ON 11/18/1971Sanctions Ordered:CensureMonetary/Fine $1,500.00Decision224©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisclosure 90 of 92iReporting Source:RegulatorInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Principal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:07/22/1970Docket/Case Number:NY-1234Principal Product Type:Other Product Type(s):Allegations:Current Status:FinalResolution Date:10/23/1970Resolution:Other Sanctions Ordered:Sanction Details:Regulator StatementCOMPLAINT #NY-1234 FILED 7/22/70DECISION 9/23/70 - MEMBER CENSURED AND FINED $1200.IS FINAL 10/23/7010/23/70: B/G REMANDED COMPLAINT TO DISTRICTSanctions Ordered:CensureMonetary/Fine $1,200.00DecisioniReporting Source:FirmInitiated By:NATIONAL ASSOCIATION SECURITIES DEALERS, INC.Date Initiated:07/22/1970Docket/Case Number:NY-1234Allegations:DUE TO THE AGE OF THIS ACTION, NO INFORMATION IS OBTAINABLE.Current Status:Final225©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:CensureOther Sanction(s)/ReliefSought:FINEPrincipal Product Type:No ProductOther Product Type(s):Resolution Date:10/23/1970Resolution:Other Sanctions Ordered:Sanction Details:CENSURE AND FINE OF 1200.00 WAS PAID, FINAL DECISUION ON10/23/1970.Firm StatementCOMPLAINT FILED 7/22/70 DECISION ON 9/23/70. FINE PAID ON 10/23/70.Sanctions Ordered:CensureMonetary/Fine $1,200.00DecisionDisclosure 91 of 92iReporting Source:RegulatorInitiated By:NEW YORK STOCK EXCHANGEPrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Date Initiated:06/26/1992Docket/Case Number:92-68Principal Product Type:Other Product Type(s):Allegations:SEE RESULTSCurrent Status:FinalResolution Date:06/26/1992Resolution:Sanctions Ordered:CensureMonetary/FineConsent226©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceOther Sanctions Ordered:Sanction Details:EDWARD A. VINER & CO.,INC. (NOW KNOWN ASFAHNESTOCK & CO.,INC.) VIOLATED SEC REGULATION 240.15c3-1 BYCOMPUTING ITS NET CAPITAL INACCURATELY; VIOLATED REGULATION240.15c3-3(e) IN THAT IT INCORRECTLY COMPUTED THE AMOUNTREQUIRED TO BE DEPOSITED INTO ITS SPECIAL RESERVE BANKACCOUNT,AND FAILED TO MAINTAIN ITS SPECIAL RESERVE ACCOUNT AT THE LEVELREQUIRED BY THE REGULATION; VIOLATED REGULATION 240.15c3-3(i)IN THAT IT FAILED TO NOTIFY THE SEC AND THE EXCHANGE THAT ITFAILED TO DEPOSIT THE AMOUNT REQUIRED TO BE DEPOSITED IN ITSSPECIAL RESERVE ACCOUNT; VIOLATED REGULATION 240.15c3-3(b)(1)IN THAT IT DID NOT OBTAIN AND MAINTAIN THE PHYSICAL POSSESSIONOR CONTROL OF FULLY PAID AND EXCESS MARGIN SECURITIES;VIOLATEDREGULATION 240.15c3-3(d) IN THAT IT FAILED TO REDUCE TO ITSPOSSESSION OR CONTROL THE REQUIRED QUANTITY OF FULLY PAID ANDEXCESS MARGIN SECURITIES; VIOLATED REGULATION 240.15c3-3(m) INTHAT IT FAILED TO PURCHASE IMMEDIATELY SECURITIES OF LIKE KINDTO THASE SOLD BY A CUSTOMER AND NOT OBTAINED FROM THECUSTOMERWITHIN TEN DAYS AFTER SETTLEMENT DATE; VIOLATED 240.17a-3 INTHAT ITS CNS AND/OR SOME OTHER ACCOUNTS HAD NOT BEENRECONCILEDON A CURRENT BASIS; VIOLATED RULE 382(a) BY ENTERING INTO ACARRYING AGREEMENT WITH ANOTHER BROKER WHICH AGREEMENTBECAME EFFECTIVE PRIOR TO BEING SUBMITTED TO THE EXCHANGE;VIOLATED RULE 401 IN THAT IT: ENTERED INTO AN AGREEMENT TOCARRY ACCOUNTS WHEN IT LACKED THE CAPACITY TO CLEAR THEADDITIONAL BUSINESS, PERMITTED CERTAIN CUSTOMERS TO ENGAGE INOTC TRANSACTIONS AT PRICES NOT REASONABLY RELATED TOPREVAILINGMARKETS AND DID NOT HAVE PROCEDURES TO DETECT OR PREVENTSUCHTRANSACTIONS, DID NOT HAVE PROCEDURES DESIGNED TO BRINGCERTAINPRACTICES TO THE ATTENTION OF SENIOR MANAGEMENT, PERMITTEDOPTION TRADING IN ACCOUNTS WHICH HAD NOT BEEN PROPERLYAPPROVED, IMPROPERLY CANCELLED AND/OR REBILLED A PURCHASETRANSACTION, AND PERMITTED TWO SUPERVISORY PERSONS TOAPPROVEACCOUNT DESIGNA*See FAQ #1*Regulator StatementSEE RESULTS227©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceiReporting Source:FirmInitiated By:NEW YORK STOCK EXCHANGEPrincipal Sanction(s)/ReliefSought:Civil and Administrative Penalt(ies) /Fine(s)Other Sanction(s)/ReliefSought:Date Initiated:07/03/1990Docket/Case Number:92-68Principal Product Type:No ProductOther Product Type(s):Allegations:THE NYSE ACCEPTED ON OFFER OF SETTLEMENT WHEREIN THEEXCHANGE ALLEGED CERTAIN VIOLATIONS OF BOOKKEEPING, WHICHOCCURRED IN THE MID TO LATE 1980'S. THE FIRM WITHOUT ADMITTINGOR DENYING ANY OF THE ALLEGED VIOLATIONS, AGREED TO A FINE OF$200,000 AND TO THE ESTABLISHMENT OF A COMMITTEE OF THE BOARDOF DIRECTORS WHICH WOULD SUPERVISE A REVIEW OF ITSPROCEDURES.Current Status:FinalResolution Date:04/29/1992Resolution:Other Sanctions Ordered:Sanction Details:$200,000.00 FINE PAID 7/23/92.Sanctions Ordered:Monetary/Fine $200,000.00Decision & Order of Offer of SettlementDisclosure 92 of 92iReporting Source:RegulatorInitiated By:NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.Date Initiated:04/17/1996Docket/Case Number:CMS950117Allegations:Current Status:Final228©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePrincipal Sanction(s)/ReliefSought:Other Sanction(s)/ReliefSought:Principal Product Type:Other Product Type(s):Resolution Date:05/01/1997Resolution:Other Sanctions Ordered:Sanction Details:Regulator StatementON APRIL 17, 1996 AND OCTOBER 26, 1996 THE MARKET REGULATIONCOMMITTEE FILED A COMPLAINT (CMS950117A) AND AN AMENDEDCOMPLAINT RESPECTIVELY AGAINST FAHNESTOCK & CO., INC. ALLEGINGVIOLATIONS OF THE RULES OF NATIONAL ASSOCIATION OF SECURITIESDEALERS. ON MAY 1, 1997 THE MARKET REGULATION COMMITTEE ISSUEDA DECISION AND ORDER OF ACCEPTANCE OF FAHNESTOCK & CO., INC.OFFER OF SETTLEMENT. THE COMMITTEE FINES THAT FAHNESTOCKVIOLATED CONDUCT RULE 2110 AND MARKETPLACE RULE 4730(B)(5) OFTHE RULES OF THE ASSOCIATION. FAHNSTOCK IS CENSURED AND FINED$6,500.***$6,500.00 PAID ON 5/15/97, INVOICE #97-MS-367***Sanctions Ordered:CensureMonetary/Fine $6,500.00Decision & Order of Offer of SettlementiReporting Source:FirmInitiated By:NATIONAL ASSOCIATION OF SECURTIES DEALERS, INC.Principal Sanction(s)/ReliefCensureDate Initiated:04/17/1996Docket/Case Number:CMS950117Principal Product Type:No ProductOther Product Type(s):Allegations:THE MARKET REGULATION COMMITTEE ALLEGED A VIOLATION OFCONDUCT RULE 2110.Current Status:Final229©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSought:Other Sanction(s)/ReliefSought:FINEResolution Date:05/01/1997Resolution:Other Sanctions Ordered:Sanction Details:CENSURE AND FINE OF 6500.00 WAS PAID ON 5/15/97.Firm StatementON APRIL 17, 1996 AND OCTOBER 26, 1996 THE MARKET REGULATIONCOMMITTEE FILED A COMPLAINT ALLEGING VIOLATIONS OF THE RULES.ON MAY 1, 1997 THE REGULATION MADE AN OFFER OF SETTLEMENT.FAHNESTOCK WAS CENSURED AND FINED 6500.00Sanctions Ordered:CensureMonetary/Fine $6,500.00Decision & Order of Offer of Settlement230©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Award - Award / JudgmentBrokerage firms are not required to report arbitration claims filed against them by customers; however, BrokerCheckprovides summary information regarding FINRA arbitration awards involving securities and commodities disputesbetween public customers and registered securities firms in this section of the report. The full text of arbitration awards issued by FINRA is available at www.finra.org/awardsonline.Disclosure 1 of 172Reporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD05/12/200000-01158ACCOUNT RELATED-ERRORS-CHARGES; ACCOUNT RELATED-FAILURE TOSUPERVISE; ACCOUNT RELATED-NEGLIGENCE; ACCOUNT RELATED-TRANSFERDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; OTHER TYPES OFSECURITIES$20,000.01AWARD AGAINST PARTY10/08/2001$8,776.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 2 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:NASD05/26/200000-01631ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT RELATED-BREACHOF CONTRACT; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-NEGLIGENCE231©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:COMMON STOCK; CORPORATE BONDS; DO NOT USE-NO OTHER TYPE OFSEC INVOLVE$1,400,000.00AWARD AGAINST PARTY06/20/2002$295,605.02There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 3 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD06/26/200000-02317ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT RELATED-BREACHOF CONTRACT; ACCOUNT RELATED-NEGLIGENCE; ACCOUNT RELATED-OTHERCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$472,000.00AWARD AGAINST PARTY03/21/2002$197,300.01There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 4 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Allegations:NASDACCOUNT RELATED-COLLECTION; DO NOT USE-NO OTHERCONTROVERSY INVOLVED232©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceCase Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:10/13/200000-04498DO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$288,000.00AWARD AGAINST PARTY03/25/2002$0.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 5 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD01/11/200100-05357ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT ACTIVITY-UNAUTHORIZED TRADINGDO NOT USE-NO OTHER TYPE OF SEC INVOLVE$185,960.01AWARD AGAINST PARTY09/20/2002$80,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 6 of 172iReporting Source:RegulatorType of Event:ARBITRATIONAllegations:ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNT RELATED-233©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD02/15/200101-00114ERRORS-CHARGES; ACCOUNT RELATED-FAILURE TO SUPERVISE;ACCOUNT RELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;MUTUAL FUNDS$123,654.89AWARD AGAINST PARTY05/09/2002$150,312.23There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 7 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD05/09/200101-01340ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNTACTIVITY-SUITABILITYDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$7,916,776.24AWARD AGAINST PARTY12/03/2003$392,927.40There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.i234©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisclosure 8 of 172Reporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD04/19/200101-01931ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-UNAUTHORIZED TRADING;ACCOUNT RELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;MUTUAL FUNDS$500.00AWARD AGAINST PARTY11/05/2002$65,558.01There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 9 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:NASD05/16/200101-02491ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-FAILURETO SUPERVISEDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$167,488.00AWARD AGAINST PARTY06/03/2002235©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSum of All Relief Awarded:$167,488.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 10 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD08/24/200101-03155ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT ACTIVITY-UNAUTHORIZED TRADINGCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$600,000.00AWARD AGAINST PARTY10/28/2002$40,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 11 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:NASD07/18/200101-03417ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-FAILURETO SUPERVISEDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES236©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:$925,000.00AWARD AGAINST PARTY08/13/2002$275,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 12 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD09/06/200101-04440DO NOT USE-EXECUTIONS-FAILURE TO EXECUTE; DO NOT USE-NO OTHERCONTROVERSY INVOLVEDDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$8,652.50AWARD AGAINST PARTY03/28/2002$8,977.50There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 13 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Allegations:NASD09/18/2001ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-OTHER;ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNT RELATED-FAILURETO SUPERVISE237©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceCase Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:01-04829COMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$452,698.61AWARD AGAINST PARTY02/21/2003$226,649.31There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 14 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD11/30/200101-04961ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT RELATED-FAILURETO SUPERVISE; ACCOUNT RELATED-NEGLIGENCE; ACCOUNT RELATED-OTHERCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$1,302,732.00AWARD AGAINST PARTY12/26/2002$273,925.01There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 15 of 172iReporting Source:RegulatorType of Event:ARBITRATIONAllegations:ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-BREACHOF CONTRACT238©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD11/19/200101-04996COMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$1,087,115.00AWARD AGAINST PARTY12/26/2002$130,830.19There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 16 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD10/18/200101-05440ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-UNAUTHORIZED TRADING;ACCOUNT RELATED-MARGIN CALLSCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$952,191.03AWARD AGAINST PARTY03/24/2003$462,808.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 17 of 172iReporting Source:RegulatorType of Event:ARBITRATION239©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD10/25/200101-05665ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT ACTIVITY-UNAUTHORIZED TRADINGDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$302,000.00AWARD AGAINST PARTY11/26/2003$50,150.01There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 18 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD11/15/200101-06025ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT RELATED-BREACHOF CONTRACT; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$163,879.00AWARD AGAINST PARTY12/24/2002$104,000.01There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.i240©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisclosure 19 of 172Reporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD12/17/200101-06124ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT RELATED-NEGLIGENCE; ACCOUNTRELATED-OTHERCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$213,000.00AWARD AGAINST PARTY12/26/2002$20,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 20 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD11/30/200101-06296ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT ACTIVITY-UNAUTHORIZED TRADINGCOMMON STOCK; CORPORATE BONDS; MUTUAL FUNDS; OPTIONS$6,007,450.40AWARD AGAINST PARTY03/17/2003$6,158,176.42241©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceThere may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 21 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD12/12/200101-06366ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MANIPULATION; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNTACTIVITY-OMISSION OF FACTSCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$11,964,183.66AWARD AGAINST PARTY01/17/2003$300,000.01There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 22 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:NASD01/16/200201-06854ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNTRELATED-FAILURE TO SUPERVISECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$33,764.00AWARD AGAINST PARTY242©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisposition Date:Sum of All Relief Awarded:05/20/2003$25,498.01There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 23 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD02/25/200202-00957ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; ACCOUNTRELATED-BREACH OF CONTRACTCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$373,000.00AWARD AGAINST PARTY08/09/2004$140,000.01There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 24 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:NASD03/11/200202-01206ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; ACCOUNTRELATED-BREACH OF CONTRACTDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OF243©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:SECURITIES$10,000,000.00AWARD AGAINST PARTY04/20/2004$179,839.06There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 25 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD04/04/200302-02443ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT RELATED-FAILURETO SUPERVISE; ACCOUNT RELATED-MARGIN CALLS; ACCOUNT RELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$146,000.00AWARD AGAINST PARTY05/07/2004$17,200.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 26 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Allegations:NASDACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-SUITABILITY; DO NOT USE-NO OTHER CONTROVERSYINVOLVED244©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceCase Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:08/20/200202-04609COMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$68,000.00AWARD AGAINST PARTY11/25/2003$99,854.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 27 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD10/15/200202-05978ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-OTHERDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$70,000.00AWARD AGAINST PARTY12/12/2003$10,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 28 of 172iReporting Source:RegulatorType of Event:ARBITRATIONAllegations:ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNT RELATED-245©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD02/10/200302-06681ERRORS-CHARGES; ACCOUNT RELATED-FAILURE TO SUPERVISE;ACCOUNT RELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$40,718.76AWARD AGAINST PARTY07/09/2003$2,902.61There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 29 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD11/13/200202-06758DO NOT USE-EXECUTIONS-FAILURE TO EXECUTE; DO NOT USE-NO OTHERCONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$75,406.58AWARD AGAINST PARTY12/24/2003$50,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 30 of 172iReporting Source:Regulator246©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD12/10/200202-07211ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-OTHER;ACCOUNT RELATED-MARGIN CALLS; DO NOT USE-NO OTHERCONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$992,494.90AWARD AGAINST PARTY02/13/2004$355,255.02There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 31 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD12/19/200202-07551ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-OTHER;ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNT RELATED-NEGLIGENCEDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$160,000.00AWARD AGAINST PARTY04/01/2004$109,649.40There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.247©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisclosure 32 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD12/23/200202-07577ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNT RELATED-FAILURETO SUPERVISE; ACCOUNT RELATED-MARGIN CALLS; ACCOUNT RELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;MUTUAL FUNDS$237,534.00AWARD AGAINST PARTY02/02/2004$113,155.51There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 33 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:NASD02/10/200303-00833ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNTRELATED-NEGLIGENCECORPORATE BONDS; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$245,000.00AWARD AGAINST PARTY05/24/2006248©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSum of All Relief Awarded:$30,300.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 34 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD04/24/200303-02667ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-SUITABILITYCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;MUTUAL FUNDS$200,000.00AWARD AGAINST PARTY08/04/2004$15,225.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 35 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:NASD04/24/200303-02669ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-SUITABILITYCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE249©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:$40,502.21AWARD AGAINST PARTY01/26/2004$10,677.22There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 36 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD06/26/200303-03335ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; ACCOUNTRELATED-MARGIN CALLSDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$1,725,525.00AWARD AGAINST PARTY10/26/2004$36,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 37 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Allegations:NASDACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-NEGLIGENCE250©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceCase Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:06/16/200303-04232COMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$33,000.00AWARD AGAINST PARTY04/22/2004$22,125.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 38 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD11/10/200303-06130ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNTRELATED-NEGLIGENCEDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$125,000.00AWARD AGAINST PARTY02/24/2005$75,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 39 of 172iReporting Source:RegulatorType of Event:ARBITRATIONAllegations:ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-251©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD10/28/200303-07651CHURNING; ACCOUNT ACTIVITY-OTHER; ACCOUNT RELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVEUnspecified DamagesAWARD AGAINST PARTY09/13/2004$101,933.27There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 40 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD12/04/200303-08354ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; ACCOUNTRELATED-FAILURE TO SUPERVISEDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$270,000.00AWARD AGAINST PARTY12/13/2004$15,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 41 of 172iReporting Source:Regulator252©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD12/17/200303-08872ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT RELATED-BREACH OF CONTRACT;ACCOUNT RELATED-FAILURE TO SUPERVISEDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$500,000.00AWARD AGAINST PARTY03/24/2005$37,222.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 42 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD02/03/200404-00171ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; DO NOT USE-NOOTHER CONTROVERSY INVOLVEDANNUITIES; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$49,000.00AWARD AGAINST PARTY01/19/2006$30,675.50There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.253©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisclosure 43 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD05/20/200404-03596ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNT RELATED-FAILURETO SUPERVISE; ACCOUNT RELATED-MARGIN CALLS; ACCOUNT RELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;OPTIONS$9,219,698.88AWARD AGAINST PARTY12/08/2005$23,036.26There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 44 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:NASD08/03/200404-05439ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSIONOF FACTS; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-FAILURETO SUPERVISEDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$190,236.69AWARD AGAINST PARTY254©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisposition Date:Sum of All Relief Awarded:11/07/2005$36,400.01There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 45 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD05/20/200505-02458ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; ACCOUNTRELATED-BREACH OF CONTRACTDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; MUTUAL FUNDS$468,145.00AWARD AGAINST PARTY04/28/2006$356,397.01There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 46 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:NASD06/10/200505-02506ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTRELATED-BREACH OF CONTRACTDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OF255©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:SECURITIESUnspecified DamagesAWARD AGAINST PARTY09/12/2006$20,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 47 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD06/06/200505-02908ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OTHER; ACCOUNT RELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$100,000.00AWARD AGAINST PARTY05/08/2006$102,600.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 48 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Allegations:NASD04/09/2007ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY; DO NOT USE-OTHER-OTHER256©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceCase Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:07-01108COMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;OPTIONSUnspecified DamagesAWARD AGAINST PARTY12/26/2008$138,200.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 49 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA05/01/200808-01074ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNTRELATED-BREACH OF CONTRACTCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVEUnspecified DamagesAWARD AGAINST PARTY04/14/2009$22,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 50 of 172iReporting Source:RegulatorType of Event:ARBITRATIONAllegations:ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT257©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA08/29/200808-03005ACTIVITY-UNAUTHORIZED TRADINGCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;OPTIONS$677,432.78AWARD AGAINST PARTY05/06/2010$328,684.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 51 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA03/02/200909-00878ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT RELATED-FAILURE TO SUPERVISE;ACCOUNT RELATED-NEGLIGENCEAUCTION RATE SECURITIES; DO NOT USE-NO OTHER TYPE OF SECINVOLVE; OTHER TYPES OF SECURITIES; STRUCTURED PRODUCTS$1,012,400,000.00AWARD AGAINST PARTY01/30/2013$30,000,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 52 of 172i258©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA03/13/200909-01309ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT RELATED-NEGLIGENCECOMMON STOCK$74,975.00AWARD AGAINST PARTY12/10/2009$30,225.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 53 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA04/22/200909-01568ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNTRELATED-NEGLIGENCEAUCTION RATE SECURITIES$700,000.00AWARD AGAINST PARTY11/10/2010$18,816.98There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.259©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisclosure 54 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA04/02/200909-01728ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNTACTIVITY-OMISSION OF FACTS; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTACTIVITY-UNAUTHORIZED TRADING; ACCOUNT RELATED-BREACH OFCONTRACT; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-NEGLIGENCE; ACCOUNT RELATED-OTHERCOMMON STOCK$250,000.00AWARD AGAINST PARTY03/16/2011$221,120.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 55 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:FINRA04/17/200909-02041ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-NEGLIGENCEMUTUAL FUNDS; OTHER TYPES OF SECURITIES$1,800,000.00260©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisposition:Disposition Date:Sum of All Relief Awarded:AWARD AGAINST PARTY03/12/2010$110,800.01There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 56 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA08/24/200909-04587ACCOUNT RELATED-BREACH OF CONTRACT; DO NOT USE-EXECUTIONS-FAILURE TO EXECUTE$27,078.00AWARD AGAINST PARTY06/29/2010$8,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 57 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:FINRA09/17/200909-05276ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT RELATED-BREACH OF CONTRACT;ACCOUNT RELATED-NEGLIGENCE261©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:COMMON STOCK; OPTIONS$1,538,000.00AWARD AGAINST PARTY02/03/2011$40,600.01There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 58 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA10/02/200909-05596ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNT RELATED-FAILURETO SUPERVISECOMMON STOCK$4,000,000.00AWARD AGAINST PARTY01/17/2013$1,074,552.22There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 59 of 172iReporting Source:RegulatorType of Event:ARBITRATIONAllegations:ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNTACTIVITY-OMISSION OF FACTS; ACCOUNT ACTIVITY-UNAUTHORIZEDTRADING; ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNT262©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA12/24/200909-07047RELATED-FAILURE TO SUPERVISE; ACCOUNT RELATED-NEGLIGENCEOTHER TYPES OF SECURITIES$5,383,000.00AWARD AGAINST PARTY01/29/2013$2,450,000.01There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 60 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA12/29/200909-07108ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATIONAUCTION RATE SECURITIES; MUTUAL FUNDS$1,075,000.00AWARD AGAINST PARTY09/08/2011$290,625.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 61 of 172iReporting Source:RegulatorType of Event:ARBITRATION263©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA03/24/201010-01145ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MANIPULATION; ACCOUNT RELATED-NEGLIGENCEAUCTION RATE SECURITIES$550,000.00AWARD AGAINST PARTY05/27/2011$428,800.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 62 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA07/08/201010-03067ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-FAILURE TOSUPERVISE; ACCOUNT RELATED-NEGLIGENCEAUCTION RATE SECURITIESUnspecified DamagesAWARD AGAINST PARTY01/05/2012$134,108.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 63 of 172i264©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA08/06/201010-03410ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-OMISSION OF FACTS; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-NEGLIGENCECOMMON STOCK; OPTIONS; PREFERRED STOCK$4,000,000.00AWARD AGAINST PARTY08/26/2011$1,112,500.01There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 64 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA09/15/201010-03776ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-FAILURE TOSUPERVISE; ACCOUNT RELATED-NEGLIGENCEAUCTION RATE SECURITIES$1,025,000.00AWARD AGAINST PARTY11/30/2011$625,000.00265©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceThere may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 65 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA09/23/201010-04145ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-BREACHOF CONTRACT; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-NEGLIGENCE$240,000.00AWARD AGAINST PARTY10/17/2011$52,500.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 66 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:FINRA12/06/201010-05250ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-NEGLIGENCEAUCTION RATE SECURITIES$430,200.00266©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisposition:Disposition Date:Sum of All Relief Awarded:AWARD AGAINST PARTY05/16/2012$143,400.01There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 67 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA02/23/201111-00703ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY;ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNT RELATED-NEGLIGENCEANNUITIES; COMMON STOCK; CORPORATE BONDS; MUNICIPAL BONDS;MUTUAL FUNDS; VARIABLE ANNUITIES$100,000.01AWARD AGAINST PARTY04/30/2012$100,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 68 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:FINRA01/10/201212-00061ACCOUNT RELATED-NEGLIGENCE; DO NOT USE-EXECUTIONS-FAILURE TOEXECUTE267©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:COMMON STOCK$22,524.00AWARD AGAINST PARTY06/29/2012$22,524.01There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 69 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA02/28/201212-00626ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-FAILURETO SUPERVISECOMMON STOCK; MUTUAL FUNDS$261,601.00AWARD AGAINST PARTY10/04/2013$355,482.98There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 70 of 172iReporting Source:RegulatorType of Event:ARBITRATIONAllegations:ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-BREACH OFCONTRACT; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-NEGLIGENCE268©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA06/07/201212-02024COMMON STOCK; PRIVATE EQUITIES$450,000.01AWARD AGAINST PARTY06/24/2014$231,900.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 71 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA06/11/201212-02052ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTRELATED-FAILURE TO SUPERVISE; ACCOUNT RELATED-NEGLIGENCECOMMON STOCK; MUTUAL FUNDS; PRIVATE EQUITIES$99,999.70AWARD AGAINST PARTY10/25/2013$126,512.34There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 72 of 172iReporting Source:RegulatorType of Event:ARBITRATION269©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA10/18/201313-02460ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNTACTIVITY-OMISSION OF FACTS; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTRELATED-BREACH OF CONTRACT; ACCOUNT RELATED-FAILURE TOSUPERVISE; ACCOUNT RELATED-NEGLIGENCECOMMON STOCK$500,000.00AWARD AGAINST PARTY02/13/2015$299,948.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 73 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA11/27/201313-03412ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-MARGIN CALLSOTHER TYPES OF SECURITIES$485,000.00AWARD AGAINST PARTY05/07/2015$434,900.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.270©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisclosure 74 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA03/18/201414-00824ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-BREACH OFCONTRACT; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-NEGLIGENCECOMMON STOCK; MUTUAL FUNDS; UNIT INVESTMENT TRUST$66,964.00AWARD AGAINST PARTY09/26/2014$14,600.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 75 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:FINRA10/28/201414-03220ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT RELATED-FAILURE TO SUPERVISEOTHER TYPES OF SECURITIES$1,500,000.01AWARD AGAINST PARTY271©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisposition Date:Sum of All Relief Awarded:05/18/2017$915,640.25There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 76 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA06/04/201515-01241ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-BREACH OFCONTRACT; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-NEGLIGENCECOMMON STOCK; LIMITED PARTNERSHIPS; REAL ESTATE INVESTMENTTRUSTUnspecified DamagesAWARD AGAINST PARTY10/21/2016$13,050.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 77 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Allegations:FINRAACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNTACTIVITY-OMISSION OF FACTS; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTRELATED-BREACH OF CONTRACT; ACCOUNT RELATED-FAILURE TOSUPERVISE272©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceCase Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:09/22/201515-02440COMMON STOCK; CORPORATE BONDS; MUTUAL FUNDS; OPTIONS; OTHERTYPES OF SECURITIES$150,000.01AWARD AGAINST PARTY08/24/2016$115,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 78 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA02/17/201616-00430ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTACTIVITY-VIOLATE OF BLUE SKY LWS; ACCOUNT RELATED-BREACH OFCONTRACT; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-NEGLIGENCEMUNICIPAL BOND FUNDS$110,000.00AWARD AGAINST PARTY02/14/2017$23,650.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 79 of 172iReporting Source:Regulator273©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA07/01/201616-01829ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-FRAUD;ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSIONOF FACTS; ACCOUNT ACTIVITY-OTHER; ACCOUNT ACTIVITY-SUITABILITY;ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNT RELATED-NEGLIGENCEMUNICIPAL BOND FUNDS; MUTUAL FUNDS$5,000,000.00AWARD AGAINST PARTY05/23/2018$862,117.03There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 80 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA12/22/201616-03687ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTACTIVITY-UNAUTHORIZED TRADING; ACCOUNT RELATED-FAILURE TOSUPERVISE; ACCOUNT RELATED-NEGLIGENCECOMMON STOCK; EXCHANGE-TRADED FUNDS; OPTIONS; OTHER TYPESOF SECURITIES; STRUCTURED PRODUCTS$3,500,000.02AWARD AGAINST PARTY06/04/2018$800,000.00274©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceThere may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 81 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:FINRA02/15/201717-00188ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-OTHER;ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNT RELATED-NEGLIGENCE; ACCOUNT RELATED-OTHERCOMMON STOCK; OPTIONS$396,726.06AWARD AGAINST PARTY02/26/2018$300,300.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 82 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:FINRA03/01/201818-00778ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-FRAUD; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT ACTIVITY-UNAUTHORIZEDTRADING; ACCOUNT ACTIVITY-VIOLATE OF BLUE SKY LWS; ACCOUNTRELATED-FAILURE TO SUPERVISE; ACCOUNT RELATED-NEGLIGENCECOMMON STOCK; OTHER TYPES OF SECURITIES275©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:Unspecified DamagesAWARD AGAINST PARTY01/08/2019$250,495.11There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 83 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD88-00703ACCOUNT ACTIVITY-SUITABILITY; DO NOT USE-NO OTHER CONTROVERSYINVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$9,250.00AWARD AGAINST PARTY11/27/1989$9,250.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 84 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:NASD01/01/198989-01049ACCOUNT RELATED-OTHER; DO NOT USE-NO OTHER CONTROVERSYINVOLVED276©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:DO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$84,505.00AWARD AGAINST PARTY05/18/1990$30,755.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 85 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD01/01/198989-01172ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-OTHER;ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; DO NOT USE-EXECUTIONS-FAILURE TO EXECUTEDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$200,112.50AWARD AGAINST PARTY06/11/1990$27,844.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 86 of 172iReporting Source:RegulatorType of Event:ARBITRATIONAllegations:ACCOUNT RELATED-ERRORS-CHARGES; DO NOT USE-NO OTHERCONTROVERSY INVOLVED; TRADING DISPUTES-BUY IN277©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD03/20/199090-00521COMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$153,612.71AWARD AGAINST PARTY01/30/1992$44,189.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 87 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD02/05/199190-02512ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; DO NOT USE-NO OTHERCONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;WARRANTS/RIGHTS$68,910.00AWARD AGAINST PARTY02/27/1992$4,500.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 88 of 172iReporting Source:RegulatorType of Event:ARBITRATION278©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD05/20/199191-00869ACCOUNT RELATED-NEGLIGENCE; DO NOT USE-EXECUTIONS-FAILURE TOEXECUTE; DO NOT USE-NO OTHER CONTROVERSY INVOLVEDDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; MUNICIPAL BOND FUNDS$494.00AWARD AGAINST PARTY03/26/1992$200.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 89 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD10/23/199191-03131ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY; DO NOTUSE-NO OTHER CONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVEUnspecified DamagesAWARD AGAINST PARTY10/22/1992$35,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 90 of 172iReporting Source:Regulator279©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD12/19/199191-03675ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT RELATED-ERRORS-CHARGES; DO NOT USE-EXECUTIONS-FAILURE TO EXECUTE; DO NOTUSE-NO OTHER CONTROVERSY INVOLVEDDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; OPTIONS$120,000.00AWARD AGAINST PARTY06/30/1992$60,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 91 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD12/12/199191-03843ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-FAILURETO SUPERVISEDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; LIMITED PARTNERSHIPS$60,000.00AWARD AGAINST PARTY12/22/1992$50,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.280©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisclosure 92 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD02/21/199292-00426ACCOUNT RELATED-NEGLIGENCE; DO NOT USE-NO OTHERCONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$4,500.00AWARD AGAINST PARTY06/30/1992$0.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 93 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:NASD04/16/199292-01205ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT RELATED-NEGLIGENCE; DO NOT USE-EXECUTIONS-FAILURE TO EXECUTE; DO NOTUSE-NO OTHER CONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;WARRANTS/RIGHTS$4,200.00AWARD AGAINST PARTY06/07/1993281©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSum of All Relief Awarded:$4,318.75There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 94 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD04/23/199292-01207DO NOT USE-EXECUTIONS-FAILURE TO EXECUTE; DO NOT USE-NO OTHERCONTROVERSY INVOLVEDDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$825.00AWARD AGAINST PARTY05/24/1993$687.50There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 95 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:NASD08/27/199292-02358ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTRELATED-FAILURE TO SUPERVISECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$678,936.00282©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisposition:Disposition Date:Sum of All Relief Awarded:AWARD AGAINST PARTY02/04/1994$585,952.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 96 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD08/17/199292-02673ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT RELATED-BREACHOF CONTRACT; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-NEGLIGENCEDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; OPTIONS$299,234.00AWARD AGAINST PARTY01/05/1995$312,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 97 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:NASD11/03/199292-03342ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY;ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; ACCOUNT RELATED-BREACH OF CONTRACT283©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:DO NOT USE-NO OTHER TYPE OF SEC INVOLVE; LIMITED PARTNERSHIPS$90,000.00AWARD AGAINST PARTY12/06/1993$62,056.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 98 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD10/08/199292-03375ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; DO NOT USE-NO OTHER CONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$503,204.25AWARD AGAINST PARTY02/16/1994$174,460.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 99 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Allegations:NASDACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-FAILURE TOSUPERVISE; DO NOT USE-NO OTHER CONTROVERSY INVOLVED284©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceCase Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:01/04/199392-04309COMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;WARRANTS/RIGHTS$247,708.36AWARD AGAINST PARTY02/17/1994$97,500.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 100 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD05/24/199393-00201ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNTRELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;OPTIONS$735,739.55AWARD AGAINST PARTY12/18/1997$31,185.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 101 of 172iReporting Source:RegulatorType of Event:ARBITRATION285©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD04/07/199393-01136ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-SUITABILITYCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE; LIMITEDPARTNERSHIPS; OPTIONSUnspecified DamagesAWARD AGAINST PARTY08/25/1995$20,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 102 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD05/12/199393-01701ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY;ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNT RELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$41,845.00AWARD AGAINST PARTY03/30/1994$5,778.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.i286©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisclosure 103 of 172Reporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD05/19/199393-01748ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSIONOF FACTS; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT ACTIVITY-UNAUTHORIZED TRADINGCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;OPTIONS$200,000.00AWARD AGAINST PARTY11/25/1994$25,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 104 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD05/19/199393-01989ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTRELATED-FAILURE TO SUPERVISECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$159,362.18AWARD AGAINST PARTY06/22/1994$67,683.50287©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceThere may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 105 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD10/12/199393-04048ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OTHER;ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNT RELATED-NEGLIGENCECOMMODITIES FUTURES; COMMON STOCK; OPTIONS; PREFERRED STOCK$360,000.00AWARD AGAINST PARTY04/10/1995$36,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 106 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:NASD01/06/199493-04410DO NOT USE-EXECUTIONS-EXECUTION PRICE; DO NOT USE-NO OTHERCONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$28,500.00AWARD AGAINST PARTY288©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisposition Date:Sum of All Relief Awarded:12/29/1994$28,506.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 107 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD06/10/199494-00927ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT RELATED-BREACH OF CONTRACT;ACCOUNT RELATED-NEGLIGENCEDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; LIMITED PARTNERSHIPS$103,660.89AWARD AGAINST PARTY05/18/1995$47,700.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 108 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:NASD09/30/199494-03224ACCOUNT ACTIVITY-OTHER; ACCOUNT RELATED-FAILURE TO SUPERVISE;DO NOT USE-EXECUTIONS-FAILURE TO EXECUTE; DO NOT USE-NO OTHERCONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;289©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:PREFERRED STOCK$113,000.00AWARD AGAINST PARTY02/20/1997$31,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 109 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD09/12/199494-03448ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY;ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; DO NOT USE-NO OTHERCONTROVERSY INVOLVEDCOMMON STOCK; CORPORATE BONDS; OPTIONS; WARRANTS/RIGHTS$430,000.00AWARD AGAINST PARTY10/24/1996$131,804.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 110 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Allegations:NASDACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTRELATED-BREACH OF CONTRACT290©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceCase Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:11/03/199494-03489COMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;OPTIONS; WARRANTS/RIGHTS$20,000.00AWARD AGAINST PARTY07/01/1996$30,068.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 111 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD09/13/199494-03630ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSIONOF FACTS; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT ACTIVITY-UNAUTHORIZED TRADINGCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$97,150.96AWARD AGAINST PARTY10/09/1995$24,306.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 112 of 172iReporting Source:RegulatorType of Event:ARBITRATIONAllegations:ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-291©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD11/17/199494-04463MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTACTIVITY-UNAUTHORIZED TRADINGCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;OPTIONS$112,697.69AWARD AGAINST PARTY01/04/1996$36,521.20There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 113 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD01/05/199594-05207ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTACTIVITY-UNAUTHORIZED TRADINGCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;MUNICIPAL BOND FUNDS; MUNICIPAL BONDS$1,000,000.00AWARD AGAINST PARTY12/31/1997$3,675.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.i292©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisclosure 114 of 172Reporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD02/08/199595-00553ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT RELATED-BREACH OF CONTRACT;ACCOUNT RELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$94,152.00AWARD AGAINST PARTY04/16/1996$4,134.59There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 115 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD04/03/199595-01356ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT ACTIVITY-UNAUTHORIZEDTRADING; DO NOT USE-EXECUTIONS-FAILURE TO EXECUTE; DO NOT USE-NO OTHER CONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;WARRANTS/RIGHTS$68,593.00AWARD AGAINST PARTY11/29/1996$21,600.00293©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceThere may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 116 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD04/05/199595-01434ACCOUNT ACTIVITY-SUITABILITY; DO NOT USE-NO OTHER CONTROVERSYINVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;OPTIONS$257,345.00AWARD AGAINST PARTY08/20/1996$119,244.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 117 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:NASD04/28/199595-01977ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSIONOF FACTS; ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNTRELATED-NEGLIGENCEDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$100,000.00294©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisposition:Disposition Date:Sum of All Relief Awarded:AWARD AGAINST PARTY07/20/1998$15,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 118 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD06/19/199595-02289ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNTACTIVITY-UNAUTHORIZED TRADINGCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$336,742.00AWARD AGAINST PARTY02/26/1997$298,912.90There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 119 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:NASD06/27/199595-03000ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; DO NOT USE-NO OTHER CONTROVERSYINVOLVED295©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:COMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;OPTIONS$20,001.00AWARD AGAINST PARTY12/13/1996$15,179.95There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 120 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD07/24/199595-03206ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT RELATED-BREACHOF CONTRACT; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$279,604.00AWARD AGAINST PARTY09/11/1997$18,750.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 121 of 172iReporting Source:RegulatorType of Event:ARBITRATIONAllegations:ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTRELATED-FAILURE TO SUPERVISE296©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD07/28/199595-03636COMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$63,990.50AWARD AGAINST PARTY08/02/1996$40,500.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 122 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD11/22/199595-04065ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; DO NOT USE-NO OTHERCONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$4,920.00AWARD AGAINST PARTY02/20/1996$5,045.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 123 of 172iReporting Source:RegulatorType of Event:ARBITRATIONAllegations:ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-297©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD10/12/199595-04430UNAUTHORIZED TRADING; ACCOUNT RELATED-BREACH OF CONTRACT;ACCOUNT RELATED-FAILURE TO SUPERVISECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$19,015.00AWARD AGAINST PARTY07/11/1996$19,015.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 124 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD11/30/199595-05380ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-FAILURETO SUPERVISEDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; OPTIONS$413,000.00AWARD AGAINST PARTY07/23/1998$269,305.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 125 of 172iReporting Source:Regulator298©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD12/04/199595-05630ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNT RELATED-FAILURE TO SUPERVISE;ACCOUNT RELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$11,681.72AWARD AGAINST PARTY11/22/1996$11,801.50There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 126 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD02/07/199695-05846ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY; DO NOTUSE-NO OTHER CONTROVERSY INVOLVEDDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$608,956.00AWARD AGAINST PARTY12/10/1996$2,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.299©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisclosure 127 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD04/02/199696-00262ACCOUNT ACTIVITY-SUITABILITY; DO NOT USE-NO OTHER CONTROVERSYINVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$5,459.00AWARD AGAINST PARTY11/18/1996$3,150.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 128 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD01/31/199696-00370ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSIONOF FACTS; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-FAILURETO SUPERVISECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVEUnspecified DamagesAWARD AGAINST PARTY03/19/1998$175,000.00300©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceThere may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 129 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD02/21/199696-00751ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT RELATED-BREACHOF CONTRACT; ACCOUNT RELATED-OTHER; DO NOT USE-NO OTHERCONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$27,644.81AWARD AGAINST PARTY12/13/1996$28,916.59There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 130 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:NASD03/04/199696-00901ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNT RELATED-NEGLIGENCE; DO NOT USE-NO OTHER CONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$14,805.00AWARD AGAINST PARTY301©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisposition Date:Sum of All Relief Awarded:02/28/1997$7,292.48There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 131 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD03/12/199696-00963ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT RELATED-BREACHOF CONTRACT; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;WARRANTS/RIGHTS$535,124.05AWARD AGAINST PARTY03/11/1997$980,845.99There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 132 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:NASD04/01/199696-01259ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-FAILURETO SUPERVISE302©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:DO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$80,000.00AWARD AGAINST PARTY09/23/1997$18,500.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 133 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD05/31/199696-01789ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT RELATED-FAILURE TO SUPERVISE; DONOT USE-EXECUTIONS-FAILURE TO EXECUTECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$30,000.00AWARD AGAINST PARTY05/05/1997$29,064.53There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 134 of 172iReporting Source:RegulatorType of Event:ARBITRATIONAllegations:ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; ACCOUNT RELATED-FAILURE TO SUPERVISE;DO NOT USE-NO OTHER CONTROVERSY INVOLVED303©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD06/14/199696-02208COMMON STOCK; CORPORATE BONDS; PREFERRED STOCK;WARRANTS/RIGHTS$65,044.33AWARD AGAINST PARTY04/21/1998$27,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 135 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD06/27/199696-02680ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; ACCOUNT RELATED-FAILURE TO SUPERVISE;DO NOT USE-NO OTHER CONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;WARRANTS/RIGHTS$71,522.00AWARD AGAINST PARTY11/06/1997$40,578.03There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 136 of 172iReporting Source:Regulator304©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD10/02/199696-03074ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNTRELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$120,000.00AWARD AGAINST PARTY07/28/1998$100,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 137 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD08/07/199696-03087ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; ACCOUNT RELATED-NEGLIGENCE; DO NOTUSE-NO OTHER CONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$162,000.00AWARD AGAINST PARTY07/30/1997$20,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.305©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisclosure 138 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD08/16/199696-03439ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-OTHER;ACCOUNT RELATED-NEGLIGENCE; DO NOT USE-EXECUTIONS-FAILURE TOEXECUTECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$20,000.00AWARD AGAINST PARTY05/15/1997$16,500.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 139 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:NASD09/25/199696-03657ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; DO NOT USE-EXECUTIONS-FAILURE TO EXECUTE; DO NOT USE-NO OTHER CONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;WARRANTS/RIGHTS$6,573.00AWARD AGAINST PARTY06/12/1997306©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSum of All Relief Awarded:$1,389.11There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 140 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD09/25/199696-04004ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-OTHER;ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNT RELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$26,735.59AWARD AGAINST PARTY12/15/1997$6,577.07There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 141 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:NASD11/05/199696-04088ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT RELATED-NEGLIGENCE; DO NOT USE-NO OTHER CONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;OPTIONS$62,515.02307©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisposition:Disposition Date:Sum of All Relief Awarded:AWARD AGAINST PARTY10/13/1997$63,015.02There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 142 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD10/28/199696-04130ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-UNAUTHORIZED TRADING;ACCOUNT RELATED-FAILURE TO SUPERVISECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE; OTHERTYPES OF SECURITIES$630,000.00AWARD AGAINST PARTY04/03/1998$367,045.59There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 143 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:NASD10/07/199696-04209ACCOUNT RELATED-OTHER; DO NOT USE-NO OTHER CONTROVERSYINVOLVED308©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:COMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;PREFERRED STOCK$50,000.00AWARD AGAINST PARTY04/11/2001$50,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 144 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD12/11/199696-04612ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTRELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$14,099.40AWARD AGAINST PARTY12/18/1997$15,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 145 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Allegations:NASDACCOUNT RELATED-FAILURE TO SUPERVISE; DO NOT USE-EXECUTIONS-FAILURE TO EXECUTE; DO NOT USE-NO OTHER CONTROVERSY INVOLVED309©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceCase Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:12/20/199696-05586COMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$90,758.50AWARD AGAINST PARTY12/24/1997$10,200.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 146 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD12/30/199696-05716ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; DO NOT USE-EXECUTIONS-FAILURE TO EXECUTECORPORATE BONDS; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$18,123.11AWARD AGAINST PARTY12/02/1997$2,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 147 of 172iReporting Source:RegulatorType of Event:ARBITRATIONAllegations:DO NOT USE-EXECUTIONS-FAILURE TO EXECUTE; DO NOT USE-NO OTHERCONTROVERSY INVOLVED310©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD01/24/199797-00117DO NOT USE-NO OTHER TYPE OF SEC INVOLVE; OPTIONS$1,250.00AWARD AGAINST PARTY10/21/1997$560.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 148 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD03/18/199797-01204ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTRELATED-FAILURE TO SUPERVISECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$60,004.09AWARD AGAINST PARTY12/19/1997$13,960.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 149 of 172iReporting Source:RegulatorType of Event:ARBITRATION311©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD04/28/199797-02028ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNTRELATED-FAILURE TO SUPERVISECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$32,000.00AWARD AGAINST PARTY02/12/1998$33,250.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 150 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD06/13/199797-02898ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT RELATED-BREACHOF CONTRACT; ACCOUNT RELATED-FAILURE TO SUPERVISE; ACCOUNTRELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$89,000.00AWARD AGAINST PARTY04/20/1999$15,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 151 of 172i312©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD07/17/199797-03067ACCOUNT ACTIVITY-OMISSION OF FACTS; ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; DO NOT USE-NO OTHER CONTROVERSYINVOLVEDDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$50,000.00AWARD AGAINST PARTY01/26/1998$4,200.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 152 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD09/23/199797-04322ACCOUNT ACTIVITY-MANIPULATION; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTSDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$78,499.39AWARD AGAINST PARTY08/06/1998$19,810.00There may be a non-monetary award associated with this arbitration.313©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePlease select the Case Number above to view more detailed information.Disclosure 153 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD10/02/199797-04536ACCOUNT ACTIVITY-OTHER; ACCOUNT RELATED-BREACH OF CONTRACT;ACCOUNT RELATED-NEGLIGENCE; DO NOT USE-NO OTHERCONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$411,000.00AWARD AGAINST PARTY03/02/1999$311,549.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 154 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:NASD10/29/199797-05100ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; ACCOUNT RELATED-OTHER; DO NOT USE-NOOTHER CONTROVERSY INVOLVEDDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; OPTIONS$39,000.00AWARD AGAINST PARTY02/23/1999314©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSum of All Relief Awarded:$28,006.61There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 155 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD01/06/199897-05893ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-UNAUTHORIZED TRADINGCOMMON STOCK; CORPORATE BONDS; DO NOT USE-NO OTHER TYPE OFSEC INVOLVE$327,000.00AWARD AGAINST PARTY12/18/1998$107,750.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 156 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:NASD12/29/199797-05930ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-UNAUTHORIZEDTRADING; DO NOT USE-NO OTHER CONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$9,815.61315©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceDisposition:Disposition Date:Sum of All Relief Awarded:AWARD AGAINST PARTY04/14/1998$8,291.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 157 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD12/31/199797-05975ACCOUNT ACTIVITY-MISREPRESENTATION; DO NOT USE-NO OTHERCONTROVERSY INVOLVEDCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$5,524.88AWARD AGAINST PARTY09/01/1998$2,912.44There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 158 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:NASD01/27/199898-00133ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTACTIVITY-UNAUTHORIZED TRADINGDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OF316©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:SECURITIES$450,000.00AWARD AGAINST PARTY06/11/1999$180,000.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 159 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD04/13/199898-00492ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-UNAUTHORIZED TRADINGDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$67,326.00AWARD AGAINST PARTY08/16/1999$50,300.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 160 of 172iReporting Source:RegulatorType of Event:ARBITRATIONAllegations:ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT RELATED-FAILURE TO SUPERVISE317©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD03/03/199898-00681COMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$77,000.00AWARD AGAINST PARTY06/30/1999$4,500.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 161 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD03/12/199898-00761ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-UNAUTHORIZED TRADINGCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$213,000.00AWARD AGAINST PARTY03/23/2000$156,693.10There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 162 of 172iReporting Source:RegulatorType of Event:ARBITRATION318©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD05/11/199898-01544ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-OMISSION OF FACTS; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTRELATED-NEGLIGENCECOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$100,000.00AWARD AGAINST PARTY09/07/1999$27,445.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 163 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD06/04/199898-01947ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-SUITABILITYCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$90,534.00AWARD AGAINST PARTY09/07/1999$40,889.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 164 of 172i319©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD10/05/199898-02687ACCOUNT RELATED-NEGLIGENCE; ACCOUNT RELATED-OTHER; DO NOTUSE-NO OTHER CONTROVERSY INVOLVEDDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$43,372.00AWARD AGAINST PARTY01/01/2000$21,138.01There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 165 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD02/08/199999-00168ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT ACTIVITY-UNAUTHORIZED TRADINGCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE;OPTIONS$117,008.30AWARD AGAINST PARTY12/13/1999$10,000.00There may be a non-monetary award associated with this arbitration.320©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidancePlease select the Case Number above to view more detailed information.Disclosure 166 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD05/20/199999-01524ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-OTHER;ACCOUNT ACTIVITY-UNAUTHORIZED TRADING; ACCOUNT RELATED-BREACH OF CONTRACTCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$45,000.00AWARD AGAINST PARTY07/10/2000$27,810.34There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 167 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:NASD06/03/199999-02291ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT RELATED-BREACH OF CONTRACT; ACCOUNTRELATED-NEGLIGENCECOMMON STOCK$25,000.00AWARD AGAINST PARTY06/21/2000321©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSum of All Relief Awarded:$16,463.20There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 168 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD06/23/199999-02356ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSIONOF FACTS; ACCOUNT ACTIVITY-SUITABILITY; DO NOT USE-NO OTHERCONTROVERSY INVOLVEDDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$622,508.00AWARD AGAINST PARTY01/04/2001$85,107.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 169 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:NASD06/28/199999-02708ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNTACTIVITY-UNAUTHORIZED TRADINGCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE322©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceSum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:$70,112.50AWARD AGAINST PARTY01/23/2001$112.50There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 170 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD07/21/199999-03152ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-OMISSION OF FACTS;ACCOUNT ACTIVITY-SUITABILITYCOMMON STOCK; DO NOT USE-NO OTHER TYPE OF SEC INVOLVE$350,196.00AWARD AGAINST PARTY06/05/2000$119,216.39There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 171 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Allegations:NASD08/18/1999ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-MISREPRESENTATION; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNTRELATED-NEGLIGENCE323©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceCase Number:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:99-03213DO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$500,000.00AWARD AGAINST PARTY04/14/2000$0.00There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.Disclosure 172 of 172iReporting Source:RegulatorType of Event:ARBITRATIONArbitration Forum:Case Initiated:Case Number:Allegations:Disputed Product Type:Sum of All Relief Requested:Disposition:Disposition Date:Sum of All Relief Awarded:NASD12/06/199999-05308ACCOUNT ACTIVITY-BRCH OF FIDUCIARY DT; ACCOUNT ACTIVITY-CHURNING; ACCOUNT ACTIVITY-SUITABILITY; ACCOUNT RELATED-NEGLIGENCEDO NOT USE-NO OTHER TYPE OF SEC INVOLVE; UNKNOWN TYPE OFSECURITIES$2,069,000.00AWARD AGAINST PARTY02/21/2001$74,241.25There may be a non-monetary award associated with this arbitration.Please select the Case Number above to view more detailed information.324©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceCivil BondThis type of disclosure event involves a civil bond for the brokerage firm that has been denied, paid, or revoked by abonding company.Disclosure 1 of 2Reporting Source:FirmPolicy Holder:FAHNESTOCK & CO. INC.Bonding Company Name:CONTINENTAL CASUALTY COMPANYDisposition:PayoutDisposition Date:07/25/1996Payout Details:$70,000Firm StatementASSISTANT MADE FRAUDULENT MARGIN CALLSDisclosure 2 of 2iReporting Source:FirmPolicy Holder:FAHNESTOCK & CO. INC.Bonding Company Name:CONTINENTAL CASUALTY COMPANYDisposition:PayoutDisposition Date:07/06/1995Payout Details:$133,614.55Firm StatementIT IS ALLEGED THAT A REGISTERED REPRESENTATIVE STOLE MONEYFROM A CLIENTS ACCOUNT.325©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. www.finra.org/brokercheckUser GuidanceEnd of ReportThis page is intentionally left blank.326©2019 FINRA. All rights reserved. Report about OPPENHEIMER & CO. INC. Table of Contents As filed with the U.S. Securities and Exchange Commission on March 1, 2019 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-12043 OPPENHEIMER HOLDINGS INC. (Exact name of registrant as specified in its charter) Delaware 98-0080034 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 85 Broad Street, New York, NY 10004 (Address of principal executive offices)(Zip Code) Registrant's Telephone number, including area code: (212) 668-8000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Class A non-voting common stock New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: Not Applicable (Title of class) Table of Contents Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No The aggregate market value of the voting stock of the Company held by non-affiliates of the Company cannot be calculated in a meaningful way because there is only limited trading in the class of voting stock of the Company. The aggregate market value of the Class A non-voting common stock held by non-affiliates of the Company at June 29, 2018 was $368.4 million based on the per share closing price of the Class A non-voting common stock on the New York Stock Exchange on June 29, 2018 of $28.00. The number of shares of the Company's Class A non-voting common stock and Class B voting common stock (being the only classes of common stock of the Company) outstanding on February 28, 2019 was 12,946,841 and 99,665 shares, respectively. DOCUMENTS INCORPORATED BY REFERENCE The Company's definitive Proxy Statement for the 2019 Annual Meeting of Stockholders to be filed by the Company pursuant to Regulation 14A is incorporated into Items 10, 11, 12, 13 and 14 of Part III of this Form 10-K. Table of Contents TABLE OF CONTENTS Item Number Page PART 1 1 Business 1A.Risk Factors 1B.Unresolved Staff Comments 2 Properties 3 Legal Proceedings 4 Mine Safety Disclosures PART II 5 Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 6 Selected Financial Data 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 7A.Quantitative and Qualitative Disclosures About Market Risk 8 Financial Statements and Supplementary Data 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 9A.Controls and Procedures 9B.Other Information PART III 10 Directors, Executive Officers and Corporate Governance 11 Executive Compensation 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 13 Certain Relationships and Related Transactions and Director Independence 14 Principal Accountant Fees and Services PART IV 15 Exhibits and Financial Statement Schedules Signatures 2 16 33 33 34 38 39 41 42 63 66 132 132 132 133 133 133 133 133 134 137 Table of Contents 2 Throughout this annual report, we refer to Oppenheimer Holdings Inc., collectively with its subsidiaries, as the "Company." We refer to the directly and indirectly owned subsidiaries of Oppenheimer Holdings Inc. collectively as the "Operating Subsidiaries." PART I Item 1. BUSINESS OVERVIEW Oppenheimer Holdings Inc. ("OPY" or the "Parent"), through its Operating Subsidiaries, is a leading middle-market investment bank and full service broker-dealer. With roots tracing back to 1881, the Company is engaged in a broad range of activities in the financial services industry, including retail securities brokerage, institutional sales and trading, investment banking (both corporate and public finance), equity & fixed income research, market-making, trust services and investment advisory and asset management services. The Company owns, directly or through subsidiaries, Oppenheimer & Co. Inc. ("Oppenheimer"), a New York-based securities broker-dealer and investment adviser, Oppenheimer Asset Management Inc. and its subsidiary advisers ("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. ("OPY Credit"), a New York corporation organized to trade and clear syndicated corporate loans. The Company's international businesses are carried on through Oppenheimer Europe Ltd. (United Kingdom with offices in the Isle of Jersey, Germany and Switzerland), Oppenheimer Investments Asia Limited (Hong Kong), and Oppenheimer Israel (OPCO) Ltd. (Israel). Oppenheimer Holdings Inc. was originally incorporated under the laws of British Columbia. Pursuant to its Certificate and Articles of Incorporation, effective on May 11, 2005, the Company's legal existence was continued under the Canada Business Corporations Act. Effective May 11, 2009, the Company changed its jurisdiction of incorporation from the federal jurisdiction of Canada to the State of Delaware in the United States with the approval of its shareholders. PRIVATE CLIENT Through its Private Client Division, Oppenheimer provides a comprehensive array of financial services through a network of 1,073 financial advisers in 92 offices located throughout the United States. Clients include high-net-worth individuals and families, corporate executives, and public and private businesses. 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, 2018, the Company held client assets under administration of $80.1 billion. 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 and futures contracts, municipal bonds, mutual funds, and unit investment trusts. 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 recent years, an increasing number of clients have chosen to do business through fee-based accounts. Wealth Planning — Oppenheimer also offers financial and wealth planning services which include asset management, individual and corporate retirement solutions, including insurance and annuity products, IRAs and 401(k) plans, U.S. stock plan services to corporate executives and businesses, education savings programs, and trust and fiduciary services to individual and corporate clients. 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 charged on such extensions of credit. The customer is charged for such margin financing at interest rates derived from Oppenheimer's rate. Table of Contents 3 ASSET MANAGEMENT OAM is responsible for the Company's advisory programs and alternative investments businesses. 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. OAM offers tailored investment management solutions and services to high-net-worth private clients, institutions and investment advisers. These include, but are not limited to, portfolio management, manager research and due diligence, asset allocation advice and financial planning. 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. Platform support functions include sales and marketing along with administrative services such as trade execution, client services, records management and client reporting and custody through Oppenheimer. At December 31, 2018, the Company had $26.7 billion of client assets under management ("AUM") in fee-based programs. Revenues for OAM are generated by investment 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. These fees are typically billed quarterly, in advance, and are calculated based on all fee based AUM balances at the end of the prior quarter. Revenue sharing arrangements for management and incentive fees in alternative investments are calculated on a pre-determined basis with registered and private investment companies. The Company's asset management services include: Separately Managed Accounts - The Company provides clients with two fee-based programs: (i) a Unified Managed Account which allows multiple investment managers, mutual funds and exchange-traded funds to be combined in a single custodial account; and (ii) a Strategic Asset Review dual contract program designed for clients seeking a direct contractual relationship with investment managers. Mutual Fund Managed Accounts - The Company offers two fee-based mutual fund managed account programs through Portfolio Advisory Services ("PAS"): (i) PAS, a non-discretionary advisory program where clients choose mutual funds approved by the Company to create strategic asset allocations; and (ii) PAS Directed, a discretionary advisory program where an Oppenheimer adviser chooses the mutual funds to create the asset allocation and portfolio construction. Discretionary Advisory Accounts - Oppenheimer offers three discretionary portfolio management programs. Through its Omega and Fahnestock Asset Management programs, Oppenheimer offers client-focused discretionary fee-based investment programs managed by Oppenheimer advisers. Non-Discretionary Advisory Accounts - Under Oppenheimer's Preference Program, Oppenheimer provides fee-based non- discretionary investment advisory services and consultation to clients. Alternative Investments - The Company offers high-net-worth and institutional investors the opportunity to participate in a wide range of non-traditional investment strategies. Strategies include single manager hedge funds, fund of funds, diversified private equity funds and single investment late stage private equity funds. For proprietary funds, the Company, through its subsidiaries, acts as a general partner. Portfolio Enhancement Program - The Company offers qualified option investors the opportunity to participate in the Portfolio Enhancement Program which sells uncovered, out-of-the-money puts and calls on the S&P 500 Index. The program is funded and supported through special memorandum account releases from the collateral in an account owned by the investor. Oppenheimer Investment Advisers - OIA provides taxable and non-taxable fixed income portfolios and strategies managed by internal portfolio managers. Oppenheimer Investment Management LLC - OIM provides institutional taxable fixed income portfolio management strategies and solutions to Taft-Hartley funds, public pension funds, corporate pension funds, insurance companies, foundations and endowments. Table of Contents 4 CAPITAL MARKETS Investment Banking Oppenheimer employs approximately 100 investment banking professionals in the United States, the United Kingdom, Germany and Israel. Oppenheimer's investment banking division provides strategic advisory services and capital markets products to emerging growth and middle market businesses as well as financial sponsors. The investment banking industry coverage groups focus on the consumer, energy, financial institutions, healthcare, rental services, technology and transportation and logistics sectors. Oppenheimer's industry coverage teams partner with Oppenheimer's Mergers and Acquisitions practice as well as Equities and Fixed Income platforms to provide its clients with tailored advice and access to capital markets. Mergers and Acquisitions — Oppenheimer advises buyers and sellers on sales, divestitures, mergers, acquisitions, tender offers, privatizations, restructurings, spin-offs and joint ventures. Oppenheimer provides dedicated senior banker focus to clients throughout the financial advisory process, which combines our structuring and negotiating expertise with our industry knowledge, extensive relationships, and capital markets capabilities. Equities Capital Markets — Oppenheimer provides capital raising solutions for corporate clients through initial public offerings, follow-on offerings, equity-linked offerings, private investments in public entities, and private placements. Oppenheimer focuses on emerging companies in growth industries, including consumer, energy, financial institutions, healthcare, rental services, technology and transportation and logistics. Debt Capital Markets — Oppenheimer offers a full range of debt capital markets solutions for emerging growth and middle market companies and financial sponsors. Oppenheimer focuses on structuring and distributing public and private debt through finance transactions, including leveraged buyouts, acquisitions, growth capital financings, recapitalizations and Chapter 11 exit financings. Oppenheimer also participates in high yield debt and fixed and floating-rate senior and subordinated debt offerings. In addition, Oppenheimer advises on and acts as underwriter or placement agent on bond financings for both sovereign and corporate emerging market issuers. Equities Division Oppenheimer employs 32 senior analysts covering over 500 equity securities, primarily listed in the U.S. and over 75 dedicated equity sales and trading professionals in offices throughout the U.S., in the EU (London and Geneva), and in Asia (Hong Kong). 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's clients include domestic and international investors such as investment advisers, banks, mutual funds, insurance companies, hedge funds, and pension and profit sharing plans, attracted by the research product, insights and market intelligence provided by sales and trading staff as well as by the quality of execution (measured by volume, timing, price and other factors), and competitive negotiated commission rates. Institutional Equity Sales and Trading — Oppenheimer acts as both principal and agent in the execution of its customers' orders. Oppenheimer buys, sells and maintains an inventory in order to "make a market". 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. When an order is in a security in which Oppenheimer makes a market, Oppenheimer normally acts as principal and purchases from or sells to its brokerage customers at a price which is approximately equal to the current inter-dealer market price plus or minus a mark-up or mark-down. 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. Oppenheimer arranges for company managements to meet with interested investors through arranged meetings wherein management representatives travel to various sites to meet with Oppenheimer representatives and with investors. Oppenheimer's analysts use a variety of quantitative and qualitative tools, integrating field analysis, proprietary channel checks and ongoing dialogue with the managements of the companies they cover in order to produce reports and studies on individual companies and industry developments. Table of Contents 5 Equity Derivatives and Index Options — Oppenheimer offers listed equity and index options strategies for investors seeking to manage risk and optimize returns within the equities market. Oppenheimer's experienced professionals have expertise in many listed derivative products designed to serve the diverse needs of its institutional, corporate and private client base. Convertible Bonds — Oppenheimer offers expertise in the sales, trading and analysis of U.S. domestic convertible bonds, convertible preferred shares and warrants, with a focus on minimizing transaction costs and maximizing liquidity. In addition Oppenheimer offers hedged (typically long convertible bonds and short equities) positions to its clients on an integrated trade basis. Event Driven Sales and Trading — Oppenheimer has a dedicated team focused on providing specialized advice and trade execution expertise to institutional clients with an interest in investment strategies such as: risk / merger arbitrage, Dutch tender offers, splits and spin-offs, recapitalizations, corporate reorganizations, and other event-driven trading strategies. Taxable Fixed Income Oppenheimer employs over 85 dedicated fixed income sales and trading professionals in offices in the U.S., the European Union ("EU") (London and Isle of Jersey) and Asia (Hong Kong). Oppenheimer offers capabilities in trading and sales in highly rated ("investment grade") and non-highly rated ("non-investment grade") corporate bonds, mortgage-backed securities, U.S. government and agency bonds 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. 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. These issuers usually have high levels of indebtedness and are more sensitive to adverse economic conditions, such as recession or increasing interest rates, than are investment grade issuers. Oppenheimer also participates in auctions for U.S. government securities conducted by the Federal Reserve Bank of New York on behalf of the U.S. Treasury Department. 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. There may be a limited market for some of these securities and market quotes may be available from only a small number of dealers or inter-dealer brokers. While Oppenheimer normally holds such securities for a short period of time in order to facilitate client transactions, there is a risk of loss upon default by the borrower or from a change in interest rates affecting the value of the security. These issuers may have high levels of indebtedness and be sensitive to adverse economic conditions, such as recession or increasing interest rates. Fixed Income Research - Oppenheimer has a total of eight fixed income research professionals. There are two dedicated research analysts covering companies that have issued high yield bonds in the United States. Oppenheimer's high yield corporate bond research effort is designed to identify debt issues that provide a combination of high yield plus capital appreciation over the short to medium term. One mortgage backed securities analyst focuses on the detailed analysis of individual agency and non-agency mortgage backed securities. Three professionals cover emerging markets fixed income issuers, including a publishing research analyst focused exclusively on sovereign bonds and a strategist providing commentary on emerging market corporate bond issuers. Two municipal bond research analysts are dedicated on the tax-exempt municipal bond market. Public Finance and Municipal Trading Public Finance - Oppenheimer's public finance group advises and raises capital for state and local governments, public agencies, private developers and other borrowers. The group assists its clients by developing and executing capital financing plans that meet our clients' objectives and by maintaining strong national institutional and retail securities distribution capabilities. Public finance bankers have expertise in specific areas, including local governments and municipalities, primary and secondary schools, post-secondary and private schools, state and local transportation entities, health care institutions, senior-living facilities, public utility providers and project financing. In addition to underwriting longer-term municipal securities, Oppenheimer also provides advice to municipal issuers with respect to the timing and issuance of short-term municipal notes, which Oppenheimer then underwrites and distributes as well as short-term notes for bridge financing of real estate projects. Table of Contents 6 Municipal Trading - Oppenheimer has regionally based municipal bond trading desks serving retail financial advisers and clients within their regions. The desks serve Oppenheimer's financial advisers in supporting their high-net-worth clients' needs for taxable and non-taxable municipal securities. The firm also maintains a dedicated institutional municipal bond sales and trading effort focused on serving mid-tier and national institutional accounts. The institutional desks assist in underwriting municipal securities originated by the Public Finance Department. Proprietary Trading and Investment Activities In the regular course of its business, Oppenheimer takes securities positions as a market maker and/or principal to facilitate customer transactions and for investment purposes. In making markets and when trading for its own account, Oppenheimer exposes its own capital to the risk of fluctuations in market value. In 2010, Congress enacted the Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") that prohibits proprietary trading by certain financial institutions (the "Volcker Rule") except where facilitating customer trades. The Volcker Rule went into effect in July 2015 and does not impact the Company's business or operations as it applies to banks and other subsidiaries of bank holding companies only. The size of Oppenheimer's securities positions vary 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. See "Regulatory Capital Requirements" herein and "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources" in Item 7. The Company, through its subsidiaries, holds investments as general partner in a range of investment partnerships (hedge funds, fund of funds, private equity partnerships and real estate partnerships) which are offered to Oppenheimer hedge fund- qualified clients and on a limited basis to qualified clients of other broker-dealers. Repurchase Agreements Additionally, through the use of securities sold under agreements to repurchase and securities purchased under agreements to resell, the Company acts as an intermediary between borrowers and lenders of short-term funds and provides funding for various inventory positions. Securities Lending In connection with both its trading and brokerage activities, Oppenheimer borrows securities to cover short sales and to complete transactions in which customers have failed to deliver securities by the required settlement date and lends securities to other brokers and dealers for similar purposes. Oppenheimer earns interest on its cash collateral provided and pays interest on the cash collateral received less a rebate earned for lending securities. CONSOLIDATED SUBSIDIARIES Oppenheimer & Co. Inc. Oppenheimer is registered as a broker-dealer in securities with the U.S. Securities Exchange Commission (the "SEC") under the Securities Exchange Act of 1934 and an investment adviser under the Investment Adviser Act of 1940, as amended (the "Adviser Act") and transacts business on various exchanges. 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. OAM is registered as an investment adviser with the SEC under the Advisers Act. OAM provides investment advice to clients through separate accounts and wrap fee programs. OPY Credit Corp. OPY Credit was formed in order to facilitate leveraged loan transactions on behalf of investment banking clients seeking such services. Table of Contents 7 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, 2018, Oppenheimer Trust held custodial assets of $290.4 million. See "Other Requirements" herein. Freedom Investments, Inc. Freedom presently offers discount services to a small number of individual clients. The Company is exploring expanding its services to offer a full spectrum of services to independent advisers and Registered Investment Advisers ("RIAs") clearing through Oppenheimer. The Company is currently developing the technology platform that would potentially support such a service offering. 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. Oppenheimer executes its own and certain of its correspondents' securities transactions on all United States exchanges as well as many non-U.S. exchanges and in the over-the-counter market. Oppenheimer clears all of its securities transactions (i.e., it delivers securities that it has sold, receives securities that it has purchased and transfers related funds) through its own facilities and through memberships in various clearing corporations and accounts with custodian banks in the United States as well as non-U.S. securities through EuroClear. 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. Oppenheimer operates as an introducing broker and introduces its clients' commodities transactions through a correspondent firm on a fully disclosed basis. Through this arrangement, Oppenheimer offers full commodity services on all commodity exchanges. EMPLOYEES At December 31, 2018, the Company employed 2,976 employees (2,918 full-time and 58 part-time), of whom 1,073 were financial advisers. COMPETITION Oppenheimer encounters intense competition in all aspects of the securities business and competes directly with other securities firms, a significant number of which have substantially greater resources and offer a wider range of financial services. In addition, there has been increasing competition from other sources, such as commercial banks, insurance companies, private equity and financial sponsors and certain major corporations that have entered the securities industry through acquisition, and from other entities. Additionally, foreign-based securities firms and commercial banks regularly offer their services in performing a variety of investment banking functions including mergers and acquisitions advice, leveraged buy-out financing, merchant banking, and bridge financing, all in direct competition with U.S. broker-dealers. Several key market events drastically altered the landscape for financial institutions since the financial crisis of 2008-9. Voluntary and involuntary consolidations as well as government assistance provided to U.S. financial institutions led to a greater concentration of capital and market share among large financial institutions. This, coupled with the ability of these financial institutions to finance their securities businesses with capital from other businesses, such as commercial banking deposits, as such institutions derive an aura of stability in the mind of the public ("too big to fail") and may put the Company at a significant competitive disadvantage. We also compete with companies that offer web-based financial services and discount brokerage services, usually with lower levels of service, to individual clients. We also compete with advisers holding themselves out as "independent" and who are registered investment advisers or RIAs. We compete principally on the basis of the quality of our advisers, services, product selection, location and reputation in local markets. 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 advisers, research analysts, investment bankers, trading professionals, portfolio managers and other revenue producing or specialized personnel. Table of Contents 8 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. In some instances, competition within the industry can be impacted by the credit ratings assigned to the firm offering services when potential clients are making a determination of acceptable counterparties. The ability of securities industry participants to offer credit facilities to potential investment banking clients may affect the assignment of individual transactions. The Company's ability to compete depends substantially on its ability to attract and retain qualified employees while managing compensation and other costs. Oppenheimer and its competitors employ advertising and direct solicitation of potential customers in order to increase business and furnish investment research publications in an effort to retain existing and attract potential clients. Many of Oppenheimer's competitors engage in these programs more extensively than Oppenheimer. Increasingly, securities firms are providing automated investment advisory services that employ algorithms to determine recommended portfolio allocations at a much lower price point. This model is in early stage and it is not yet clear whether this type of investment advisory service will provide meaningful competition to the full service investment model. BUSINESS CONTINUITY PLAN The Company has a business continuity plan in place which is designed to enable it to continue to operate and provide services to its clients under a variety of circumstances in which one or more events may make one or more firm operating locations unavailable due to a local, regional or national emergency, or due to the failure of one or more systems that the Company relies upon to provide the services that it routinely provides to its clients, employees and various business partners and counterparties. The plan covers all business areas of the Company and provides contingency plans for technology, staffing, equipment, and communication to employees, clients and counterparties. While the plan is intended to address many types of business continuity issues, there could be certain occurrences which, by their very nature are unpredictable, and can occur in a manner that is outside of our planning guidelines and could render the Company's estimates of timing for recovery inaccurate. Under all circumstances, it is the Company's intention to remain in business and to provide ongoing investment services as if no disruption had occurred. Oppenheimer maintains its headquarters and principal operating locations in New York City. In order to provide continuity for these services, the Company operates a primary data center as well as maintains back-up facilities (information technology, operations and data processing) in sites with requisite communications back-up systems. In addition, the Company occupies significant office facilities in locations around the United States which could, in an emergency, house dislocated staff members for a short or intermediate time frame. Oppenheimer relies on public utilities for power and phone services, industry specific entities for ultimate custody of client securities and market operations, and various industry vendors for services that are significant and important to its business for the execution, clearance and custody of client holdings, for the pricing and valuing of client holdings, and for permitting our Company's employees to communicate on an efficient basis. The Company's headquarters and the primary location 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. CYBERSECURITY Cybersecurity presents significant challenges to the business community in general, as well as to the financial services industry. Increasingly, bad actors, both domestically and internationally, attempt to steal personal data and/or interrupt the normal functioning of businesses through accessing individuals' and companies' files and equipment connected to the internet. Recent incidents have reflected the increasing sophistication of intruders and their intent to steal personally identifiable information as well as funds and securities. These intruders sometimes use instructions seemingly from authorized parties but in fact from parties intent on attempting to steal. In other instances these intruders attempt to bypass normal safeguards and disrupt or steal significant amounts of information and then either release it to the internet or hold it for ransom. Regulators are increasingly requiring companies to provide increased levels of sophisticated defenses. The Company maintains vigilance and ongoing planning and systems to prevent 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 has implemented new systems to detect and defend from such attacks and has appointed a Corporate Information Security Officer and put in place a department of dedicated staff to provide ongoing development and oversight of the Company's systems and defenses. See "Risk Factors — The Company may be exposed to damage to its business or its reputation by cybersecurity incidents" in Item 1A. Table of Contents 9 REGULATION Self-Regulatory Organization Membership — Oppenheimer is a member firm of the following self-regulatory organizations ("SROs"): the Financial Industry Regulatory Authority ("FINRA"), the Intercontinental Exchange, Inc., known as ICE Futures U.S., and the National Futures Association ("NFA"). In addition, Oppenheimer has satisfied the requirements of the Municipal Securities Rulemaking Board ("MSRB") for effecting customer transactions in municipal securities. Freedom is also a member of FINRA. Oppenheimer Europe Ltd. is regulated by the Financial Conduct Authority ("FCA") in the United Kingdom and the Jersey Financial Services Commission ("JFSC") in the Isle of Jersey. Oppenheimer Investments Asia Limited is regulated by the Securities and Futures Commission ("SFC") in Hong Kong. Oppenheimer is also a member of the Securities Industry and Financial Markets Association ("SIFMA"), a non-profit organization that represents the shared interests of participants in the United States financial markets. 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. The Commodities Futures Trading Commission ("CFTC") is the federal agency charged with administration of the federal laws governing commodities and future trading. Much of the regulation of broker-dealers has been delegated to SROs such as FINRA and the NFA. FINRA has been designated as the primary regulator of Oppenheimer and Freedom with respect to securities and option trading activities and the NFA has been designated as Oppenheimer's primary regulator with respect to commodities activities. SROs adopt rules (subject to approval by the SEC or the CFTC, as the case may be) governing the industry and conduct periodic examinations of Oppenheimer's and Freedom's operations. In recent years, the SEC has increased its programs for examinations of registrants, even where such examinations overlap with examinations conducted by other entities. Securities firms are also subject to regulation by state securities commissions in the states in which they do business. Oppenheimer and Freedom are each registered as a broker-dealer in the 50 states and the District of Columbia and Puerto Rico. 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. The SEC has adopted rules requiring underwriters to ensure that municipal securities issuers provide current financial information and imposing limitations on political contributions to municipal issuers by brokers, dealers and other municipal finance professionals. Additional legislation, changes in rules promulgated by the SEC, the CFTC and by SROs, or changes in the interpretation or enforcement of existing laws and rules may directly affect the method of operation and profitability of broker-dealers. The SEC, SROs (including FINRA) and state securities commissions may conduct administrative proceedings which can result in censure, fine, issuance of cease and desist orders or suspension or expulsion of a broker-dealer (for all or part of its activities), its officers, or employees. These administrative proceedings, whether or not resulting in adverse findings, can require substantial expenditures of time and money and can have an adverse impact on the reputation of a broker-dealer. The principal purpose of regulating and disciplining broker-dealers is to protect customers and the securities markets rather than to protect creditors and shareholders. Regulation NMS and Regulation SHO have substantially affected the trading of equity securities. These regulations were intended to increase transparency in the markets and have acted to further reduce spreads and, with competition from electronic marketplaces, to reduce commission rates paid by institutional investors. These rules have also reduced liquidity in some markets under some circumstances. Oppenheimer and certain of its affiliates are also subject to regulation by the SEC and under certain state laws in connection with its business as an investment adviser. The SEC has announced its intention to place additional oversight and scrutiny over dual registrants such as the Company, where the registrant conducts business as a broker-dealer and investment adviser. Margin lending by Oppenheimer is subject to the margin rules of the Board of Governors of the Federal Reserve System and FINRA. Under such rules, Oppenheimer is limited in the amount it may lend in connection with certain purchases of securities and is also required to impose certain maintenance requirements on the amount of securities and cash held in margin accounts. In addition, Oppenheimer may (and currently does) impose more restrictive margin requirements than required by such rules. Table of Contents 10 The Sarbanes-Oxley Act of 2002 — The Sarbanes-Oxley Act effected significant changes to corporate governance, auditing requirements and corporate reporting. This law generally applies to all companies, including the Company, with equity or debt securities registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company has taken numerous actions, and incurred substantial expenses, since the passage of the legislation to comply with the Sarbanes-Oxley Act, related regulations promulgated by the SEC and other corporate governance requirements of the NYSE. On May 14, 2013, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) released an updated version of its Internal Control - Integrated Framework (the "2013 Framework"), which supersedes the original framework that was developed in 1992. The Company adopted the 2013 Framework on December 15, 2014 as a basis for their compliance with the Sarbanes- Oxley Act of 2002. Management has determined that the Company's internal control over financial reporting as of December 31, 2018 was effective. See "Management's Report on Internal Control over Financial Reporting." Wall Street Reform & Consumer Protection Act (the "Dodd-Frank Act") — In July 2010, Congress enacted extensive legislation entitled the Dodd-Frank Act in which it mandated that the SEC and other regulators conduct comprehensive studies and issue new regulations based on their findings to control the activities of financial institutions in order to protect the financial system, the investing public and consumers from issues and failures that occurred in the 2008-9 financial crisis. This effort has extensively impacted the regulation and practices of financial institutions including the Company. The changes have significantly reduced leverage available to financial institutions and increased transparency to regulators and investors of risks taken by such institutions. 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, create new regulations around financial transactions with retirement plans due to the adoption of a uniform fiduciary standard of care of broker-dealers and investment advisers providing personalized investment advice about securities to such plans, increase the disclosures provided to clients, and in some European jurisdictions create a tax on securities transactions. The Consumer Financial Protection Bureau also implemented new rules affecting the interaction between financial institutions and consumers. 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 may result in the need for new written representations by issuers. They may also limit the manner in which we, in our capacity as an underwriter or in our other professional roles, interact with municipal issuers. Oppenheimer registered as a municipal adviser and by virtue of such registration is now subject to additional regulation and oversight in respect of its municipal finance business. These rules impact the nature of Oppenheimer's interactions with public finance clients, and may have a negative impact on the volume of public finance transactions in which we maybe engaged. Section 956 of the Dodd-Frank Act required the SEC, Federal Reserve, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Federal Housing Finance Agency and National Credit Union Administration (the "agencies") to jointly prescribe regulations or guidelines related to the prohibition of incentive-based compensation arrangements that encourage inappropriate risks at certain financial institutions. The agencies have released a proposed rule that would prohibit certain forms of incentive-based compensation arrangements for financial institutions with greater than $1 billion in total assets (the "Incentive-Based Compensation Proposal"). Much of the Incentive-Based Compensation Proposal would apply to financial institutions categorized as either "Level 1" institutions (assets of $250 billion or more) or "Level 2" institutions (assets of $50 billion to $250 billion), while "Level 3" institutions (assets of $1 billion to $50 billion) would be subject to less extensive obligations. All covered financial institutions would be required to, among other requirements: (i) annually document the structure of their incentive-based compensation arrangements; (ii) retain records of such annual documentation for at least seven years; and (iii) comply with general prohibitions on incentive-based compensation arrangements that could encourage inappropriate risk-taking. Should the Incentive-Based Compensation Proposal be adopted, we would be subject to the rule's requirements as a "Level 3" financial institution, which would require us to incur additional legal and compliance costs, as well as subject us to increased legal risks. 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. 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; 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 Table of Contents 11 in terrorism, money laundering and other crimes. 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. 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. Markets in Financial Instruments Directive (known as "MiFID II") — MiFID II became effective on January 3, 2018 in the United Kingdom and all of Europe. The Directive is intended to strengthen investor protection and improve the functioning of financial markets making them more efficient, resilient and transparent. MiFID II sets out: (i) conduct of business and organizational requirements for investment firms; (ii) authorization requirements for regulated markets; (iii) regulatory reporting to avoid market abuse; (iv) trade transparency obligation for shares; and (v) rules on the admission of financial instruments to trading. The new rulemaking has and will fundamentally alter the provision of research to financial institutions as well as require the registration of all market participants. It is anticipated that this rulemaking will negatively impact the overall availability of commission revenue in payment for equity research and possibly negatively impact the liquidity of markets for equities and fixed income securities in Europe. It is possible that these new business practices may be adopted in the U.S. although there is currently no such regulatory requirement in the U.S. Fiduciary Standard — Rulemaking by the U.S. Department of Labor and SEC— In April 2016, the U.S. Department of Labor ("DOL") finalized its definition of fiduciary under the Employee Retirement Income Security Act ("ERISA") through the release of new rules and changes to interpretations of six prohibited transaction exemptions which together set a new standard for the treatment and effects of advice given to retirement investors. Under this new rule, investment advice given to an employee benefit plan or an individual retirement account ("IRA") is considered fiduciary advice. In March 2018, the U.S. 5th Circuit Court of Appeals found that the DOL did not have the jurisdiction to adopt the aforementioned rules and vacated the DOL Fiduciary Rules effective in June 2018. On April 18, 2018, the SEC announced its proposed "Regulation Best Interest," a package of rulemakings and interpretations that address customers' relationships with investment advisers and broker-dealers. Regulation Best Interest would create an intermediate standard requiring advisers and broker-dealers to act in the clients' "best interest" at all times. The proposal did not provide a definition of "best interest'. The proposed rules would require substantially greater record keeping than is currently the case. The rules would be applicable to all customers of broker-dealers and investment advisers. The public comment period applicable to Regulation Best Interest expired on August 7, 2018. The SEC has indicated its intention to move forward with a final rule proposal in 2019. It is too soon to predict whether and in what form the SEC will adopt Regulation Best Interest, the effect it may have on broker-dealers and investment advisers generally, the specific effect it will have on the Company's broker- dealer and investment management businesses, and the effect it will have on the Company’s competitive position in the financial services industry. During 2017, the Company reviewed its business and operating models in light of the DOL Fiduciary Rules and made structural and operational changes to the Company's broker-dealer and investment management businesses. The changes have had a negative impact on revenues derived from retirement accounts and the desirability of servicing such accounts, except when they are participating in fixed fee based programs. The Company is reviewing its business and operating models in light of the 5th Circuit ruling and the proposed Regulation Best Interest and may make further structural and operational changes in light of the vacated DOL Fiduciary Rules and in anticipation of the SEC adopting a version of the proposed Regulation Best Interest. The Company believes new regulations generally increase the associated costs of doing business and put further pressure on conventional agency commission business conducted by broker-dealers. Privacy — U.S. federal law establishes minimum federal standards for financial privacy by, among other provisions, requiring financial institutions to adopt and disclose privacy policies with respect to consumer information and setting forth certain limitations on disclosure to third parties of consumer information. U.S. state law and regulations adopted under U.S. federal law impose obligations on Oppenheimer 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. The General Data Protection Regulation (“GDPR”) imposes additional requirements for companies that collect or store personal data of European Union residents. 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. Oppenheimer has adopted and disseminated privacy policies, and communicates required information relating to financial privacy and data security, in accordance with applicable law. Table of Contents 12 Money Market Funds — In July 2014, 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. Oppenheimer utilizes such funds to a small extent for its own investment purposes and, as a result of the new rules, has extensively limited the availability of money market funds to its clients. Instead the Company now offers FDIC short-term bank deposits alternatives as cash sweep investments. The SEC has recently announced its intention to review the programs under which broker-dealers offer FDIC-insured accounts to clients and their potential impact on the financial system. Consolidated Audit Trail — The SEC approved Rule 613 on October 1, 2012 which introduced the requirement for a Consolidated Audit Trail ("CAT"), a central repository for all U.S. securities transactions that is to be utilized for monitoring of markets and for regulatory purposes by SROs and the SEC. The rule was issued as a response to Wall Street's May 6, 2010 "Flash Crash", during which the market sustained a significant decline without any underlying news or economic rationale. The CAT will be utilized to identify the beneficiary owner of every securities transaction and to correlate that information across market participants. In February 2015, the SROs submitted the CAT National Market System ("NMS") Plan to create the CAT and to announce the requirements for market participants. On November 15, 2016, the NMS Plan was unanimously approved by the SEC. The NMS Plan outlines the reporting requirements for industry participants, as well as the requirements for the Plan Processor, the entity that will hold and protect the data, while making it available to authorized users. When CAT goes into operation, all U.S. broker-dealers and SROs will be required to report all equity and options life cycle events to the repository on a daily basis. In addition, U.S. broker-dealers will be required to submit customer account information to the repository. This will make CAT the world's largest repository of securities transactions, receiving an estimated 58 billion records per day. The SROs will have 12 months to submit equity and options life cycle events to the CAT. Large broker-dealers, which includes Oppenheimer, will be required to begin reporting within 24 months, and small broker- dealers will be required to report within 36 months. It is anticipated that there will be duplicative reporting by the SROs and the industry, however, the CAT NMS Plan requires SROs to define plans to eliminate duplicative reporting. The Company anticipates that the requirements of the CAT will be expensive to implement, require significant amounts of planning and will present potential privacy issues that may not be protected under existing rule-making and may make the Company liable for improper disclosure or cybersecurity hacking of the CAT database. Trust Company Regulation — Oppenheimer Trust is a limited purpose trust company organized under the laws of Delaware and is regulated by the Office of the State Banking Commissioner. The impact of any of, or more than one of, the foregoing could have a material adverse effect on our business, financial condition and results of operations. Certain of the rulemaking described above remains under consideration and has been subject to numerous changes and postponements in both the requirements and implementation date(s). 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. 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. Oppenheimer elects to compute net capital under the alternative method of calculation permitted by the Net Capital Rule. (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. "Aggregate debit items" are assets that have as their source transactions with customers, primarily margin loans. Failure to maintain the required net capital may subject a firm to suspension or expulsion by FINRA, the SEC and other regulatory bodies and ultimately may require the firm's liquidation. The Net Capital Rule also prohibits payments of dividends, redemption of stock and the prepayment of subordinated indebtedness if net capital thereafter would be less than 5% of aggregate debit items (or 7% of the funds required to be segregated pursuant to the Commodity Exchange Act and the regulations thereunder, if greater) and payments in respect of principal of subordinated indebtedness if net capital thereafter would be less than 5% of aggregate Table of Contents 13 debit items (or 6% of the funds required to be segregated pursuant to the Commodity Exchange Act and the regulations thereunder, if greater). The Net Capital Rule also provides that the total outstanding principal amounts of a broker-dealer's indebtedness under certain subordination agreements (the proceeds of which are included in its net capital) may not exceed 70% of the sum of the outstanding principal amounts of all subordinated indebtedness included in net capital, par or stated value of capital stock, paid-in capital in excess of par, retained earnings and other capital accounts for a period in excess of 90 days. Net capital is essentially defined in the Net Capital Rule as net worth (assets minus liabilities), plus qualifying subordinated borrowings minus certain mandatory deductions that result from excluding assets that are not readily convertible into cash and deductions for certain operating charges. The Net Capital Rule values certain other assets, such as a firm's positions in securities, conservatively. Among these deductions are adjustments (referred to as "haircuts") in the market value of securities to reflect the possibility of a market decline prior to disposition. Compliance with the Net Capital Rule could limit those operations of the brokerage subsidiaries of the Company that require the intensive use of capital, such as underwriting and trading activities and the financing of customer account balances, and also could restrict the Company's ability to withdraw capital from its brokerage subsidiaries, which in turn could limit the Company's ability to pay dividends, repay debt and redeem or purchase shares of its outstanding capital stock. Under the Net Capital Rule, broker-dealers are required to maintain certain records and provide the SEC with quarterly reports with respect to, among other things, significant movements of capital, including transfers to a holding company parent or other affiliate. 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. Oppenheimer Europe Ltd. is authorized by the FCA of the United Kingdom to provide investment services under MiFID II. New Basel III requirements being implemented in the European Union have changed how capital adequacy is reported under the Capital Requirements Directive ("CRD IV"), effective January 1, 2014, for Oppenheimer Europe Ltd. There are three capital ratios Oppenheimer Europe Ltd. must meet: 1) Common Equity Tier 1 ratio of 4.5%; 2) Tier 1 Capital ratio of 6.0%; and 3) Total Capital ratio of 8.0%. Under MiFID II, Oppenheimer Europe has applied for and received increased permissions, effective January 1, 2018, to be treated as a liquidity provider and as such may trade as principal with its institutional counter- parties in fixed income securities. This registration will require that Oppenheimer Europe Ltd. dedicate increased capital to its European business. Oppenheimer Investments Asia Limited was approved by the SFC to provide institutional fixed income and equities brokerage services to institutional investors and corporate finance advisory services to Hong Kong institutional clients. 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. See note 17 to the consolidated financial statements appearing in Item 8 for further information on the Company's regulatory capital requirements. Table of Contents 14 OTHER REQUIREMENTS Senior Secured Notes On June 23, 2017, the Parent issued in a private offering $200.0 million aggregate principal amount of 6.75% Senior Secured Notes due 2022 (the "Unregistered Notes") under an indenture at an issue price of 100% of the principal amount. On September 19, 2017, the Parent completed an exchange offer in which the Parent exchanged 99.8% of its Unregistered Notes for a like principal amount of notes with identical terms except that such new notes have been registered under the Securities Act of 1933, as amended (the "Notes"). The Parent did not receive any proceeds in the exchange offer. The interest on the Notes is payable semi-annually on January 1st and July 1st, beginning January 1, 2018. See note 11 to the consolidated financial statements appearing in Item 8 for further discussion. The indenture governing the Notes contains covenants which place restrictions on the incurrence of indebtedness, the payment of dividends, the repurchase of equity, the sale of assets, mergers and acquisitions and the granting of liens. The Notes provide for events of default including, among other things, nonpayment, breach of covenants and bankruptcy. The Parent's obligations under the Notes are guaranteed by certain of the Parent's subsidiaries and are secured by a first-priority security interest in substantially all of the assets of the Parent and the subsidiary's guarantors. These guarantees and the collateral may be shared, on a pari passu basis, under certain circumstances, with debt incurred. As of December 31, 2018, the Parent was in compliance with all of its covenants. Securities Investor Protection Corporation ("SIPC") Oppenheimer and Freedom are each members of the SIPC, which provides, in the event of the liquidation of a broker-dealer, protection for customers' accounts (including the customer accounts of other securities firms when it acts on their behalf as a clearing broker) held by the firm of up to $500,000 for each customer, subject to a limitation of $250,000 for claims for cash balances. SIPC is funded through assessments on registered broker-dealers. In addition, Oppenheimer has purchased additional "excess of SIPC" policy protection from certain underwriters at Lloyd's of London of an additional $99.5 million (and $900,000 for claims for cash balances) per customer. The "excess of SIPC" policy has an overall aggregate limit of liability of $300.0 million. The Company has entered into an indemnity agreement with Lloyd's of London pursuant to which the Company has agreed to indemnify Lloyd's of London for losses incurred by Lloyd's under the policy. Table of Contents 15 AVAILABLE INFORMATION The Company's principal place of business is at 85 Broad Street, New York, NY 10004 and its telephone number is (212) 668-8000. The Company's internet address is http://www.oppenheimer.com. 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. Table of Contents 16 Item 1A. RISK FACTORS The Company's business and operations are subject to numerous risks. The material risks and uncertainties that management believes affect the Company are described below. The risks and uncertainties described below are not the only ones facing the Company. Additional risks and uncertainties that management is not aware of or focused on or that management currently deems immaterial may also impair the Company's business operations. If any of the following risks actually occur, the Company's financial condition and results of operations may be materially and adversely affected. The Company may continue to be adversely affected by the failure of the Auction Rate Securities Market. In February 2008, the market for auction rate securities ("ARS") began experiencing disruptions due to the failure of auctions for preferred stocks issued to leverage closed end funds, municipal bonds backed by tax exempt issuers, and student loans backed by pools of student loans guaranteed by U.S. government agencies. The failure of the ARS market prevented clients of the Company from liquidating holdings in these positions or, in many cases, posting these securities as collateral for loans. The Company had operated in an agency capacity in this market and held and continues to hold ARS in its proprietary accounts and, as a result of this and the Company's ongoing repurchases from customers discussed below, is exposed to these liquidity issues as well. While a significant number of clients have had their ARS redeemed, there is no guarantee that any future ARS issuer redemptions will occur and, if so, that the Company's clients' ARS, or ARS held by the Company will be redeemed. In February 2010, Oppenheimer finalized settlements with each of the New York Attorney General's office ("NYAG") and the Massachusetts Securities Division ("MSD" and, together with the NYAG, the "Regulators") concluding investigations and administrative proceedings concerning Oppenheimer's marketing and sale of ARS. Pursuant to the settlements with the Regulators, Oppenheimer agreed to extend offers to repurchase ARS from certain of its clients subject to certain terms and conditions. In addition to the settlements with the Regulators, Oppenheimer has also reached settlements of and received adverse awards in legal proceedings with various clients where the Company is obligated to purchase ARS. If the ARS market remains frozen, the Company may likely be further subject to claims by its clients. There can be no guarantee that the Company will be successful in defending any future actions against it. See "Management's Discussion and Analysis of Financial Condition and Results of Operations — Regulatory and Legal Environment — Other Regulatory Matters", Legal Proceedings in Item 3 and "Management's Discussion and Analysis of Financial Condition and Results of Operations — Off-Balance Sheet Arrangements" in Item 7 for additional details. Damage to our reputation could damage our businesses. Maintaining our reputation is critical to our attracting and maintaining customers, investors and employees. If we fail to deal with, or appear to fail to deal with, various issues that may give rise to reputational risk, we could significantly harm our business prospects. These issues include, but are not limited to, any of the risks discussed in this section, appropriately dealing with potential conflicts of interest, legal and regulatory requirements, employee misconduct, ethical issues, money-laundering, privacy, record keeping, cybersecurity protections, sales and trading practices, failure to sell securities we have underwritten at the anticipated price levels, and the proper identification of the legal, reputational, credit, liquidity, and market risks inherent in our products. A failure to deliver appropriate standards of service and quality, or a failure or perceived failure to treat customers and clients fairly, can result in customer dissatisfaction, litigation and heightened regulatory scrutiny, all of which can lead to lost revenue, higher operating costs and harm to our reputation. Further, negative publicity regarding us, whether or not true, may also result in harm to our prospects. Increasingly, the internet, through investor blogs or other sites, is being used to publish information that is untrue, significantly skewed or in some cases slanderous about companies and individuals that are published anonymously and are difficult to refute. Such stories can negatively impact the reputation of companies that are the subject of such attacks. See "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" herein. 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 Company may be adversely affected by changes in the interpretation or enforcement of existing laws and rules by these governmental authorities and self-regulatory organizations or by new or revised legislation or regulations imposed by them. Table of Contents 17 As a result of the financial crisis there was a call by politicians, commentators and various sections of the public for more stringent legislation and regulation in the United States and abroad. The Dodd-Frank Act of 2010 enacted sweeping changes and an unprecedented increase in the supervision and regulation of the financial services industry (see "Business — Regulation" in Item 1). The ultimate impact that the Dodd-Frank Act of 2010 and implementing regulations will have on us, the financial industry and the economy at large cannot be quantified until all of the implementing regulations called for under the legislation have been finalized and fully implemented. We are evaluating the impact of the proposed "Regulation Best Interest" on our business (see "Business — Regulation — Fiduciary Standard — Rulemaking by the U.S. Department of Labor and SEC" in Item 1). The implementation of this proposed rule may negatively impact our business. Oppenheimer is a broker-dealer and investment adviser registered with the SEC and is primarily regulated by FINRA. Broker- dealers are subject to regulations which cover all aspects of the securities business, including, without limitation: • sales methods and supervision; • 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 (the "Patriot Act") compliance; • capital structure of securities firms; • trade and regulatory reporting; • cybersecurity; • pricing of services; • compliance with DOL rules and regulations for retirement accounts; • compliance with lending practices (Regulation T); • record keeping; and • the conduct of directors, officers and employees. Compliance with many of the regulations applicable to the Company involves a number of risks, particularly in areas where applicable regulations may be subject to varying interpretation. The requirements imposed by these regulations are designed to ensure the integrity of the financial markets and to protect customers and other third parties who deal with the Company. 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. FINRA adopts rules, subject to approval by the SEC, which govern its members and conducts periodic examinations of member firms' operations. The SEC has passed a requirement for custodians of securities on behalf of investment advisers, such as the Company, to conduct an annual "surprise audit", in addition to the annual audit, and to issue an annual controls report to its clients, issued by a qualified accounting firm, describing its processes and controls affecting custody operations. A failure to conduct such an audit or issue the report with favorable findings could adversely affect a sizable portion of the Company's businesses. If the Company is found to have violated any applicable regulations, formal administrative or judicial proceedings may be initiated against it that may result in: • censure; • fine; • civil penalties, including treble damages in the case of insider trading violations; • the issuance of cease-and-desist orders; • the deregistration or suspension of our broker-dealer activities; • the suspension or disqualification of our officers or employees; or • other adverse consequences. Table of Contents 18 The imposition of any of the above or other penalties could have a material adverse effect on our operating results and financial condition. For a more detailed description of the regulatory scheme under which the Company operates, see "Business — Regulation" in Item 1 and "Management's Discussion and Analysis of Financial Condition and Results of Operations — Regulatory and Legal Environment" in Item 7. Financial services firms have been subject to increased regulatory scrutiny over the last several years, increasing the risk of financial liability and reputational harm resulting from adverse regulatory actions. Firms in the financial services industry have been operating in an onerous regulatory environment, which has become even more stringent in light of well-publicized fraud or "Ponzi" schemes. 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 over the last several years. We may be adversely affected by changes in the interpretation or enforcement of existing laws and rules by these governmental authorities and SROs. Each of the regulatory bodies with jurisdiction over us has regulatory powers dealing with many different aspects of financial services, including, but not limited to, the authority to fine us and to grant, cancel, restrict or otherwise impose conditions on the right to continue operating particular businesses. 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 (the "1940 Act"), could result in investigations, sanctions and reputational damage. 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. Substantial legal liability or significant regulatory action taken against us could have a material adverse effect on our business prospects including our cash position. Changes in regulations resulting from either the Dodd-Frank Act or any new regulations or laws may affect our businesses. The market and economic conditions in the period after the financial crisis have directly led to a demand by the public for changes in the way the financial services industry is regulated, including a call for more stringent legislation and regulation in the United States and abroad. The Dodd-Frank Act enacted sweeping changes and an unprecedented increase in the supervision and regulation of the financial services industry (see "Business — Regulation" in Item 1 for a discussion of such changes, including the Volcker Rule). The Dodd-Frank Act impacts the manner in which we market our products and services, manage our business and operations, and interact with regulators, all of which could materially impact our results of operations, financial condition and liquidity. Certain provisions of the Dodd-Frank Act or other legislation that have or may impact our businesses include: the establishment of a fiduciary standard for broker-dealers; regulatory oversight of incentive compensation; the imposition of capital requirements on financial holding companies and to a lesser extent, greater oversight over derivatives trading; and restrictions on proprietary trading. To the extent the Dodd-Frank Act or other legislation impacts the operations, financial condition, liquidity and capital requirements of unaffiliated financial institutions with whom we transact business, those institutions may seek to pass on increased costs, reduce their capacity to transact, or otherwise present inefficiencies in their interactions with us. Numerous regulatory changes, and enhanced regulatory and enforcement activity, relating to the asset management business may increase our compliance and legal costs and otherwise adversely affect our business. The SEC has proposed certain measures that would establish a new framework to replace the requirements of Rule 12b-1 under the 1940 Act with respect to how mutual funds pay fees to cover the costs of selling and marketing their shares. The staff of the SEC's Office of Compliance, Inspections and Examinations has indicated that it is reviewing the use of fund assets to pay for fees to sub-transfer agents and sub-administrators for services that may be deemed to be distribution-related. As these measures are neither final nor undergoing implementation throughout the financial services industry, their impact cannot be fully ascertained at this time. As this regulatory trend continues, it could adversely affect our operations and, in turn, our financial results. Asset management businesses have experienced a number of highly publicized regulatory inquiries, which have resulted in increased scrutiny within the industry and new rules and regulations for mutual funds, investment advisers and broker-dealers. As some of our wholly owned subsidiaries are registered as investment advisers with the SEC, increased regulatory scrutiny and rulemaking initiatives may result in augmented operational and compliance costs or the assessment of significant fines or penalties against our asset management business, and may otherwise limit our ability to engage in certain activities. Table of Contents 19 It is not possible to determine the extent of the impact of any new laws, regulations or initiatives that may be proposed, or whether any of the 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. In 2018, the SEC has proposed Regulation Best Interest which many expect to result in a heightened standard of fiduciary conduct for broker-dealers. Any such standard, if mandated, would likely require us to review our product and service offerings and implement certain changes, as well as require that we incur additional regulatory costs in order to ensure compliance. see "Management's Discussion and Analysis of Financial Condition and Results of Operations — Regulatory and Legal Environment" in Item 7. In addition, U.S. and foreign governments have taken regulatory actions impacting the investment management industry, and may continue to take further actions, including expanding current (or enacting new) standards, requirements and rules that may be applicable to us and our subsidiaries. For example, the SEC and several states and municipalities in the United States have adopted "pay-to-play" rules, which could limit our ability to charge advisory fees. Such "pay-to-play" rules could affect the profitability of that portion of our business. 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 advisers, is periodically reexamined and may be limited or modified in the future. In Europe, the recent effectiveness of MiFID II has eliminated the use of securities transactions to pay for research (see "Business — Regulation" in Item 1). 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. Legislation has and may continue to result in changes to rules and regulations applicable to our business, which may negatively impact our business and financial results. The securities industry is subject to extensive and constantly changing regulation. Broker-dealers and investment advisors are subject to regulations covering all aspects of the securities business. Any violation of these laws or regulations could subject us to the following events, any of which could have a material adverse effect on our business, financial condition and prospects: civil and criminal liability; sanctions, which could include the revocation of our subsidiaries' registrations as investment advisors or broker-dealers; the revocation of the licenses of our financial advisors; censures; fines; or a temporary suspension or permanent bar from conducting business. The SEC announced its proposed "Regulation Best Interest," a package of rulemakings and interpretations that address customers' relationships with investment advisers and broker-dealers. Regulation Best Interest would enact an intermediate standard requiring advisers and broker-dealers to act in the clients' "best interest" at all times. The proposed rules would require substantially greater record keeping than is currently the case. The rules would be applicable to all customers of broker-dealers and investment advisers. Additional rulemaking or legislative action could negatively impact the Company’s business and financial results. It is difficult to determine what impact “Regulation Best Interest” will have on our compliance costs, business, operations and profitability, although it appears likely to increase the cost of compliance. Failure to comply with capital requirements could subject the Company to suspension or revocation by the SEC or suspension or expulsion by FINRA, the FCA and the SFC. Oppenheimer and Freedom are subject to the SEC's Net Capital Rule which requires the maintenance of minimum net capital. For a more detailed description of the regulatory scheme under which the Company operates, see "Business — Regulatory Capital Requirements" in Item 1. Failure to comply with net capital requirements could subject the Company to suspension or revocation by the SEC or suspension or expulsion by FINRA. In addition, Oppenheimer Europe Ltd. and Oppenheimer Investments Asia Limited are regulated by the FCA of the United Kingdom and the SFC in Hong Kong, respectively. Failure of these entities to comply with capital requirements could subject those entities to suspension or expulsion by their respective regulators. Developments in market and economic conditions have adversely affected, and may in the future adversely affect, the Company's business and profitability. Performance in the financial services industry is heavily influenced by the overall strength of economic conditions and financial market activity, which generally have a direct and material impact on the Company's results of operations and financial condition. These conditions are a product of many factors, which are mostly unpredictable and beyond the Company's control, and may affect the decisions made by financial market participants. Table of Contents 20 Changes in economic and political conditions, including economic output levels, interest and inflation rates, employment levels, prices of commodities including oil and gas, consumer confidence levels, and fiscal and monetary policy can affect market conditions. For example, the Federal Reserve's policies determine, in large part, the cost of funds for lending and investing and the return earned on those loans and investments. The market impact from such policies also can decrease materially the value of certain of our financial assets, most notably debt securities. Changes in the Federal Reserve's policies are beyond our control and, consequently, the impact of these changes on our activities and results of our operations are difficult to predict. While global financial markets have shown signs of improvement in recent years, uncertainty remains. A period of sustained downturns and/or volatility in the securities markets, prolonged levels increasing short-term interest rates, could lead to a return to increased credit market dislocations, reductions in the value of real estate, and other negative market factors could significantly impair our revenues and profitability. 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 anticipated exit from the EU ("Brexit"), and the stability of the EU's sovereign debt, has caused uncertainty and disruption for financial markets globally. 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. Uncertain or unfavorable market or economic conditions could result in reduced transaction volumes, reduced revenue and reduced profitability in any or all of the Company's principal businesses. For example: • The Company's investment banking revenue, in the form of underwriting, placement and financial advisory fees, is directly related to the volume and value of transactions as well as the Company's role in these transactions. In an environment of uncertain or unfavorable market or economic conditions such as we have observed in recent years, the volume and size of capital-raising transactions and acquisitions and dispositions typically decreases, thereby reducing the demand for the Company's investment banking services and increasing price competition among financial services companies seeking such engagements. The completion of anticipated investment banking transactions in the Company's pipeline is uncertain and beyond its control, and its investment banking revenue is typically earned upon the successful completion of a transaction. In most cases, the Company receives little or no payment for investment banking engagements that do not result in the successful completion of a transaction. For example, a client's acquisition transaction may be delayed or terminated because of a failure to agree upon final terms with the counterparty, failure to obtain necessary regulatory consents or board or stockholder approvals, failure to secure necessary financing, adverse market conditions or unexpected financial or other problems in the client's or counterparty's business. If the parties fail to complete a transaction on which the Company is advising or an offering in which it is participating, the Company will earn little or no revenue from the transaction but may incur expenses including, but not limited, to legal fees. The Company may perform services subject to an engagement agreement and the client may refuse to pay fees due under such agreement, requiring the Company to re-negotiate fees or commence legal action for collection of such earned fees. Accordingly, the Company's business is highly dependent on market conditions, the decisions and actions of its clients and interested third parties. 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 fees generated from its asset management business segment. Asset management fees often are primarily comprised of base management and performance (or incentive) fees. 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. Poor investment performance by the Company's funds and portfolio managers could result in a loss of managed accounts and could result in reputational damage that might make it more difficult to attract new investors and thus further impact the Company's business and financial condition. If the Company experiences losses of managed accounts, fee revenue will decline. In addition, in periods of declining market values, the values under management may ultimately decline, which would negatively impact fee revenues. • In the past decade, passively managed index funds have seen greater investor interest, and this trend has become more prevalent in recent years. This has led to a decline in the revenue the Company generates from commissions on the execution of trading transactions as turnover in client account diminishes. 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. Table of Contents 21 • Financial markets are susceptible to severe events such as dislocations which may lead to reduced liquidity. Under these extreme conditions, the Company's risk management strategies may not be as effective as they might otherwise be under normal market conditions. • Liquidity is essential to the Company's businesses. The Company's liquidity could be negatively affected by an inability to obtain funding on a regular basis either in the short term market through bank borrowings or in the long term market through senior and subordinated borrowings. Such illiquidity could arise through a lowering of the Company's credit rating or through market disruptions unrelated to the Company. The availability of unsecured financing is largely dependent on our credit rating which is largely determined by factors such as the level and quality of our earnings, capital adequacy, risk management, asset quality and business mix. As noted above, the Company has purchased, and will continue to purchase, auction rate securities from its clients which will reduce liquidity available to the Company for other purposes. The failure to secure the liquidity necessary for the Company to operate and grow could have a material adverse effect on the Company's financial condition and results of operations. See "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources" in Item 7. • Changes in interest rates (especially if such changes are rapid), sustained low or high interest rates or uncertainty regarding the future direction of interest rates, may create a less favorable environment for certain of the Company's businesses, particularly its fixed income business, resulting in reduced business volume and reduced revenue. • The reduction of interest rates substantially reduced the interest profits available to the Company through its margin lending and also reduced profit contributions from cash sweep products such as the FDIC-insured Bank Deposit program. If interest rates remain at low levels, despite the recent moves upward by the Federal Reserve, the Company's profitability will be negatively impacted. • The Company expects to continue to commit its own capital to engage in proprietary trading, investing and similar activities, and uncertain or unfavorable market or economic conditions may reduce the value of its positions, resulting in reduced revenue. The cyclical nature of the economy and the financial services industry leads to volatility in the Company's operating margins, due to the fixed nature of a portion of compensation expenses and many non-compensation expenses, as well as the possibility that the Company will be unable to scale back other costs at an appropriate time to match any decreases in revenue relating to changes in market and economic conditions. As a result, the Company's financial performance may vary significantly from quarter to quarter and year to year. Table of Contents 22 Markets have experienced, and may continue to experience, periods of high volatility accompanied by reduced liquidity and periods of low volatility resulting in a reduction in trading volumes which may have an adverse effect on our revenues. Financial markets are susceptible to severe events evidenced by rapid depreciation in asset values accompanied by a reduction in asset liquidity. Under these extreme conditions, hedging and other risk management strategies may not be effective. Severe market events have historically been difficult to predict, and significant losses could be realized in the wake of such events. The "Flash Crash" on May 6, 2010 was driven not by external economic events but by internal market dynamics and automated systems. Such events cannot be predicted nor can anyone, including the Company, predict the effectiveness of controls put in place to prevent such incidents. Increasingly, threats of terrorism and terrorist acts have disrupted markets and increased the perception of risk to the worldwide economy. Any such act or threat may impact markets, and consequently the Company's business, in an adverse manner. The Company has experienced significant pricing pressure in areas of its business, which may impair its revenues and profitability. 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 equity market, the Company has experienced increased pricing pressure from institutional clients to reduce commissions, and this pressure has been augmented by the increased use of electronic and direct market access trading, which has created additional downward pressure on trading margins. The trend toward using alternative trading systems is continuing to grow, which may result in decreased commission and trading revenue, reduce the Company's participation in the trading markets and its ability to access market information, and lead to the creation of new and stronger competitors. Institutional clients also have pressured financial services firms to alter "soft dollar" practices under which brokerage firms bundle the cost of trade execution with research products and services. Some institutions are entering into arrangements that separate (or "unbundle") payments for research products or services from sales commissions. Institutions subject to MiFID II, which the Company does business with primarily through its European based subsidiary, were required to unbundle such payments commencing January 3, 2018. These arrangements have increased the competitive pressures on sales commissions and have affected the value the Company's clients place on high-quality research. Moreover, the Company's inability to reach agreement regarding the terms of unbundling arrangements with institutional clients who are actively seeking such arrangements could result in the loss of those clients, which would likely reduce the level of institutional commissions. 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 some of our competitors seek to obtain market share by reducing fees, commissions or margins. Additional pressure on sales and trading revenue may impair the profitability of the Company's business. The ability to attract, develop and retain highly skilled and productive employees, particularly qualified financial advisers, is critical to the success of the Company's business. The Company faces intense competition for qualified employees from other businesses in the financial services industry, and the performance of its business may suffer to the extent it is unable to attract and retain employees effectively, particularly given the relatively small size of the Company and its employee base compared to some of its competitors. The primary sources of revenue in each of the Company's business lines are commissions and fees earned on advisory and underwriting transactions and customer accounts managed by its employees, who are regularly recruited by other firms and in certain cases are able to take their client relationships with them when they change firms. Experienced employees are regularly offered financial inducements by larger competitors to change employers, and thus competitors can de-stabilize the Company's relationship with valued employees. Some specialized areas of the Company's business are operated by a relatively small number of employees, the loss of any of whom could jeopardize the continuation of that business following the employee's departure. Turnover in the financial services industry is high. The cost of retaining skilled professionals in the financial services industry has escalated considerably. Financial industry employers are increasingly offering guaranteed contracts, upfront payments, and increased compensation. These can be important factors in a current employee's decision to leave us as well as in a prospective employee's decision to join us. As competition for skilled professionals in the industry remains intense, we may have to devote significant resources to attracting and retaining qualified personnel. To the extent we have compensation targets, we may not be able to retain our employees, which could result in increased recruiting expense or result in our recruiting additional employees at compensation levels that are not within our target range. In particular, our financial results may be adversely affected by the costs we incur in connection with any upfront loans or other incentives we may offer to newly recruited financial advisers and other key personnel. If we were to lose the services of any of our investment bankers, senior equity research, sales and trading Table of Contents 23 professionals, asset managers, or executive officers to a competitor or otherwise, we may not be able to retain valuable relationships and some of our clients could choose to use the services of a competitor instead of our services. If we are unable to retain our senior professionals or recruit additional professionals, our reputation, business, results of operations and financial condition could be adversely affected. Further, new business initiatives and efforts to expand existing businesses generally require that we incur compensation and benefits expense before generating additional revenues. Moreover, companies in our industry whose employees accept positions with competitors frequently claim that those competitors have engaged in unfair hiring practices. We have been subject to such claims and may be subject to additional claims in the future as we seek to hire qualified personnel, some of whom may work for our competitors. Some of these claims may result in material litigation. We could incur substantial costs in defending against these claims, regardless of their merits. Such claims could also discourage potential employees who work for our competitors from joining us. Recent actions by some larger competitors to reject the "Recruiting Protocol", an industry adopted set of practices permitting financial advisers to port their client relationships to a new firm under strict rules, is likely to increase the likelihood of litigation among competitors surrounding the employment of new advisers and their solicitation of their clients and may act as a new barrier to recruitment of financial advisers. The Company depends on its senior employees and the loss of their services could harm its business. The Company's success is dependent in large part upon the services of its senior executives and employees. Any loss of service of the chief executive officer ("CEO") may adversely affect the business and operations of the Company. The Company maintains key man insurance on the life of its CEO. Over 96% of the Class B voting shares 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. 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. Underwriting and market-making activities may place capital at risk. The Company may incur losses and be subject to reputational harm to the extent that, for any reason, it is unable to sell securities it purchased as an underwriter at the anticipated price levels. As an underwriter, the Company is subject to heightened standards regarding liability for material misstatements or omissions in prospectuses and other offering documents relating to offerings it underwrites. Any such misstatement or omission could subject the Company to enforcement action by the SEC and claims of investors, either of which could have a material adverse impact on the Company's results of operations, financial condition and reputation. As a market maker, the Company may own large positions in specific securities, and these undiversified holdings concentrate the risk of market fluctuations and may result in greater losses than would be the case if the Company's holdings were more diversified. Increases in capital commitments in our proprietary trading, investing and similar activities increase the potential for significant losses. The Company's results of operations for a given period may be affected by the nature and scope of these activities and such activities will subject the Company to market fluctuations and volatility that may adversely affect the value of its positions, which could result in significant losses and reduce its revenues and profits. In addition, increased commitment of capital will expose the Company to the risk that a counterparty will be unable to meet its obligations, which could lead to financial losses that could adversely affect the Company's results of operations. These activities may lead to a greater concentration of risk, which may cause the Company to suffer losses even when business conditions are generally favorable for others in the industry. If the Company is unable to repay its outstanding indebtedness when due, its operations may be materially adversely effected. At December 31, 2018, the Company had liabilities of $1.7 billion, a significant portion of which is collateralized by highly liquid and marketable government securities as well as marketable securities owned by customers. 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 its debt obligations could have a material adverse effect on its results of operations and financial condition, including the acceleration of the payment of debt. Table of Contents 24 The Company may make strategic acquisitions of businesses, engage in joint ventures or divest or exit existing businesses, which could result in unforeseen expenses or disruptive effects on its business. From time to time, the Company may consider acquisitions of other businesses or joint ventures with other businesses. Any acquisition or joint venture that the Company determines to pursue will be accompanied by a number of risks. After the announcement or completion of an acquisition or joint venture, the Company's share price could decline if investors view the transaction as too costly or unlikely to improve the Company's competitive position. Costs or difficulties relating to such a transaction, including integration of products, employees, offices, technology systems, accounting systems and management controls, may be difficult to predict accurately and be greater than expected causing the Company's estimates to differ from actual results. The Company may be unable to retain key personnel after the transaction, and the transaction may impair relationships with customers and business partners. In addition, the Company may be unable to achieve anticipated benefits and synergies from the transaction as fully as expected or within the expected time frame. Divestitures or elimination of existing businesses or products could have similar effects, including the loss of earnings of the divested business or operation. These difficulties could disrupt the Company's ongoing business, increase its expenses and adversely affect its operating results and financial condition. 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. 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. For example, a firm that acts as an underwriter may be held liable for material misstatements or omissions of fact in a prospectus used in connection with the securities being offered or for statements made by its securities analysts or other personnel.The Company's underwriting activities will usually involve offerings of the securities of smaller companies, which often involve a higher degree of risk and are more volatile than the securities of more established companies. In comparison with more established companies, smaller companies are also more likely to be the subject of securities class actions, to carry directors and officers liability insurance policies with lower limits or not at all, and to become insolvent. In addition, in market downturns, claims tend to increase. Each of these factors increases the likelihood that an underwriter may be required to contribute to an adverse judgment or settlement of a securities lawsuit. 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, as an employer and as a result of other business activities. 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. See "The Company may continue to be adversely affected by the failure of the Auction Rate Securities Market" herein, "Legal Proceedings" in Item 3 and "Management's Discussion and Analysis of Financial Condition and Results of Operations — Regulatory Environment — Other Regulatory Matters" in Item 7. The preparation of the consolidated financial statements requires the use of estimates that may vary from actual results. If actual experience differs from management's estimates used in the preparation of financial statements, the Company's consolidated results of operations or financial condition could be adversely affected. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires the application of accounting policies that often involve a significant degree of judgment. Such estimates and assumptions may require management to make difficult, subjective and complex judgments about matters that are inherently uncertain. The Company's accounting policies that are most dependent on the application of estimates and assumptions, and therefore viewed by the Company as critical accounting estimates, are those described in note 2 to the consolidated financial statements appearing in Item 8. These accounting estimates require the use of assumptions, some of which are highly uncertain at the time of estimation. These estimates, by their nature, are based on judgment and current facts and circumstances. Accordingly, actual results could differ from these estimates, possibly in the near term, and could have a material adverse effect on the consolidated financial statements. Table of Contents 25 The value of the Company's goodwill and intangible assets may become impaired. A portion of the Company's assets arise from goodwill and intangibles recorded as a result of business acquisitions it has made. The Company is required to perform a test for impairment of such goodwill and intangible assets, at least annually. To the extent that there are continued declines in the markets and general economy, impairment may become more likely. If the test resulted in a write-down of goodwill and/or intangible assets, the Company would incur a significant loss. For further discussion of this risk, see note 18 to the consolidated financial statements appearing in Item 8. 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 observed historical market behavior. 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. 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. 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 believes that it effectively evaluates and manages the market, credit 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. For example, unexpectedly large or rapid movements or disruptions in one or more markets or other unforeseen developments can have a material adverse effect on the Company's financial condition and results of operations. The consequences of these developments can include losses due to adverse changes in securities values, decreases in the liquidity of trading positions, higher volatility in earnings, increases in the Company's credit risk to customers as well as to third parties and increases in general systemic risk. Certain of the Company's risk management systems are subject to regulatory review and may be found to be insufficient by the Company's regulators potentially leading to regulatory sanctions. The Company over the past several years has increased its systems of surveillance over the various risks facing its business and has instituted standing committees to regularly review both the risks themselves as well as the adequacy of the systems providing information. There can be no guarantee that the operation of these systems will allow the Company to prevent or mitigate the various risks faced by its businesses. Regulators regularly review companies' risk control practices, and, if found inadequate, bring enforcement actions and sanctions against such firms. Credit risk may expose the Company to losses caused by the inability of borrowers or other third parties to satisfy their obligations. The Company is exposed to the risk that third parties that owe it money, securities or other assets will not perform their obligations. These parties include: • trading counterparties; • customers; • clearing agents; • exchanges; • clearing houses; and • other financial intermediaries as well as issuers whose securities we hold. Table of Contents 26 These parties may default on their obligations owed to the Company due to bankruptcy, lack of liquidity, operational failure or other reasons. This default risk may arise, for example, from: • holding securities of third parties; • executing securities trades that fail to settle at the required time due to non-delivery by the counterparty or systems failure by clearing agents, exchanges, clearing houses or other financial intermediaries; and • extending credit to clients through bridge or margin loans or other arrangements. Significant failures by third parties to perform their obligations owed to the Company could adversely affect the Company's revenue and its ability to borrow in the credit markets. Risks related to insurance programs. 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. While the Company endeavors to purchase insurance coverage that is appropriate to its assessment of risk, it is unable to predict with certainty the frequency, nature or magnitude of claims for direct or consequential damages. The Company's business may be negatively affected if in the future its insurance proves to be inadequate or unavailable. In addition, insurance claims may divert management resources away from operating the business. 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 runs the risk that employee misconduct could occur. Misconduct by employees could include: • employees binding the Company to transactions that exceed authorized limits or present unacceptable risks to the Company (rogue trading); • employee theft and improper use of Company or client property; • employees conspiring with other employees or third parties to defraud the Company; • employees hiding unauthorized or unsuccessful activities from the Company, including outside business activities that are undisclosed and may result in liability to the Company; • employees steering or soliciting their clients into investments which have not been sponsored by the Company and without the proper diligence; • the improper use of confidential information; or • employee conduct outside of acceptable norms including harassment. These types of misconduct could result in unknown and unmanaged risks or losses to the Company including regulatory sanctions and serious harm to its reputation. The precautions the Company takes to prevent and detect these activities may not be effective. If employee misconduct does occur, the Company's business operations could be materially adversely affected. There have been a number of highly-publicized cases involving fraud or other misconduct by employees in the financial services industry, and the Company has experienced such cases in the past and there is a risk that our employees could engage in misconduct in the future that adversely affects our business. The Company has experienced employee misconduct which has led to regulatory sanctions and legal liability that has adversely affected our results and could continue to adversely affect our results in the future. We remain subject to a number of obligations and standards arising from our asset management business and our authority over the assets managed by our asset management business. In addition, our financial advisers may act in a fiduciary capacity, providing financial planning, investment advice and discretionary asset management. The violation of these obligations and standards by any of our employees could adversely affect our clients and us. It is not always possible to deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in all cases. If our employees engage in misconduct, our business could be materially adversely affected including our cash position. Table of Contents 27 Defaults by another large financial institution could adversely affect financial markets generally. In the fourth quarter of 2008, Lehman Brothers filed for bankruptcy protection and financial institutions including the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, Citigroup Inc., Bank of America Corporation, and American International Group, Inc. needed to accept substantial funding from the Federal government. In the fourth quarter of 2011, MF Global Holding Ltd. filed for bankruptcy protection. In August 2012, Peregrine Financial Group, Inc. was declared bankrupt and placed in receivership. The commercial soundness of many financial institutions may be closely interrelated as a result of credit, trading, clearing, or other relationships between these institutions. As a result, concerns about, or a default or threatened default by, one institution could lead to significant market-wide liquidity and credit problems, losses, or defaults by other institutions. This is sometimes referred to as "systemic risk" and may adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms and exchanges with which the Company interacts on a daily basis, and therefore could adversely affect the Company. The failure of guarantors could adversely affect the pricing of securities and their trading markets. Monoline insurance companies, commercial banks and other insurers regularly issue credit enhancements to issuers in order to permit them to receive higher credit ratings than would otherwise be available to them. As a result, the failure of any of these guarantors could and would suddenly and immediately result in the depreciation in the price of the securities that have been guaranteed or enhanced by such entity. This failure could adversely affect the markets in general and the liquidity of the securities that are so affected. This disruption could create losses for holders of affected securities including the Company. In addition, rating agency downgrades of the debt or deposit or claims-paying ability of these guarantors could result in a reduction in the prices of securities held by the Company which are guaranteed by such guarantors. The Company's information systems may experience an interruption or breach in security. The Company relies heavily on communications and information systems to conduct its business. Any failure, interruption or breach in security of these systems could result in failures or disruptions in the Company's customer relationship management, general ledger, and other systems. While the Company has policies and procedures designed to prevent or limit the effect of the failure, interruption or security breach of its information systems, there can be no assurance that any such failures, interruptions or security breaches will not occur or, if they do occur, that they will be adequately addressed. Recent disclosures of such incursions by foreign and domestic unauthorized agents aimed at large financial institutions reflect higher risks for all such institutions. The occurrence of any failures, interruptions or security breaches of the Company's information systems could damage the Company's reputation, result in a loss of customer business, subject the Company to additional regulatory scrutiny, or expose the Company to civil litigation and possible financial liability, any of which could have a material adverse effect on the Company's financial condition and results of operations. Our businesses rely extensively on data processing and communications systems. In addition to better serving clients, the effective use of technology increases efficiency and enables us to reduce costs. Adapting or developing our technology systems to meet new regulatory requirements, client needs, and competitive demands is critical for our business. Introduction of new technology presents challenges on a regular basis. 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. Our continued success depends, in part, upon our ability to: (i) successfully maintain and upgrade the capability of our technology systems; (ii) address the needs of our clients by using technology to provide products and services that satisfy their demands; and (iii) retain skilled information technology employees. 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. Security breaches of our technology systems, or those of our clients or other third-party vendors we rely on, could subject us to significant liability and harm our reputation. The expectations of sound operational and informational security practices have risen among our clients and vendors, the public at large and regulators. Our operational systems and infrastructure must continue to be safeguarded and monitored for potential failures, disruptions, cyber-attacks and breakdowns. Our operations rely on the secure processing, storage and transmission of confidential and other information in our computer systems and networks. 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. Despite our implementation of protective measures and endeavoring to modify them as circumstances warrant, our computer systems, Table of Contents 28 software and networks may be vulnerable to human error, natural disasters, power loss, spam attacks, unauthorized access, distributed denial of service attacks, computer viruses and other malicious code and other events that could have an impact on the security and stability of our operations. Notwithstanding the precautions we take, if one or more of these events were to occur, this could jeopardize the information we confidentially maintain, including that of our clients and counterparties, which is processed, stored in and transmitted through our computer systems and networks, or otherwise cause interruptions or malfunctions in our operations or the operations of our clients and counterparties. We may be required to expend significant additional resources to modify our protective measures, to investigate and remediate vulnerabilities or other exposures or to make required notifications or disclosures. We may also be subject to litigation and financial losses that are neither insured nor covered under any of our current insurance policies. A technological breakdown could also interfere with our ability to comply with financial reporting and other regulatory requirements, exposing us to potential disciplinary action by regulators. In providing services to clients, we may manage, utilize and store sensitive or confidential client or employee data, including personal data. As a result, we may be subject to numerous laws and regulations designed to protect this information, such as U.S. federal and state laws governing the protection of personally identifiable information and international laws. These laws and regulations are increasing in complexity and number. 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. In addition, unauthorized disclosure of sensitive or confidential client or employee data, whether through system failure, employee negligence, fraud or misappropriation, could damage our reputation and cause us to lose clients and related revenue. Potential liability in the event of a security breach of client data could be significant. Depending on the circumstances giving rise to the breach, this liability may not be subject to a contractual limit or an exclusion of consequential or indirect damages. The Company may be exposed to damage to its business or its reputation by cybersecurity incidents. As the world becomes more interconnected through the use of the internet and users rely more extensively on the internet and the cloud for the transmission and storage of data, such information becomes more susceptible to incursion by hackers and other parties intent on stealing or destroying data on which the Company or our clients rely. We face an evolving landscape of cybersecurity threats in which hackers use a complex array of means to perpetrate cyber-attacks, including the use of stolen access credentials, malware, ransomware, phishing, structured query language injection attacks, and distributed denial-of- service attacks, among other means. These cybersecurity incidents have increased in number and severity and it is expected that these trends will continue. Should the Company be affected by such an incident, we may incur substantial costs and suffer other negative consequences, which may include: • remediation costs, such as liability for stolen assets or information, repairs of system damage, and incentives to customers or business partners in an effort to maintain relationships after an attack; • increased cybersecurity protection costs, which may include the costs of making organizational changes, deploying additional personnel and protection technologies, training employees, and engaging third party experts and consultants; • lost revenues resulting from the unauthorized use of proprietary information or the failure to retain or attract customers following an attack; • litigation and legal risks, including regulatory actions by state and federal regulators; and • loss of reputation. Increasingly, intruders attempt to steal significant amounts of data, including personally identifiable data and either hold such data for ransom or release it onto the internet, exposing our clients to financial or other harm and thereby significantly increasing the liability of the Company in such cases. Our regulators have introduced programs to review our protections against such incidents which, if they determined that our systems do not reasonably protect our clients assets and their data, could result in enforcement activity and sanctions. The Company has and continues to introduce systems and software to prevent any such incidents and increasingly reviews and increases its defenses to such issues through the use of various services, programs and outside vendors. The Company also continually reviews and revises its cybersecurity policy to ensure that it remains up to date. In the event that the Company experiences a material cybersecurity incident or identifies a material cybersecurity threat, the Company will make all reasonable efforts to properly disclose it in a timely fashion. It is impossible, however, for the Company to know when or if such incidents may arise or the business impact of any such incident. Table of Contents 29 As a result of such risks, the Company has and is likely to incur significant costs in preparing its infrastructure and maintaining it to resist any such attacks. In addition to personnel dedicated to overseeing the infrastructure and systems to defend against cybersecurity incidents, senior management is regularly briefed on issues, preparedness and any incidents requiring response. At its regularly scheduled meetings, the Audit Committee of the Board of Directors and the Board of Directors are briefed and brought up to date on cybersecurity. The Company continually encounters technological change. The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services, driven by the emergence of the Fintech industry. 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. 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. The business operations that are conducted outside of the United States subject the Company to unique risks and potential loss. To the extent the Company conducts business outside the United States, it is subject to risks including, without limitation, the risk that it will be unable to provide effective operational support to these business activities, the risk of non-compliance with foreign laws and regulations, the general economic and political conditions in countries where it conducts business and currency fluctuations. 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. We may face exposure for environmental liabilities including in Canada. The Company has received two notices, the latter of which was a claim filed in court in British Columbia, Canada, from the current owners of two separate rural mountainous properties in Canada claiming that the Company may be liable for environmental claims with respect to such properties and designating the Company a potentially responsible party in remedial activities for the cleanup of waste sites under applicable statutes. The Company is believed to have held title to and also to have operated various properties in British Columbia, Canada from October 1942 through August 1969 and to have engaged in mining and milling operations for some part of that period. The Company was originally incorporated in British Columbia, Canada in 1933, under the name Sheep Creek Gold Mines Limited. The Company underwent a series of name changes and continuances, including from British Columbia to Ontario, from Ontario to Canadian federal jurisdiction and then, in May 2009, from Canada to Delaware. The Company currently believes that future environmental claims, if any, that may be asserted will not be material and that its potential liability for known environmental matters is not material, however, there can be no guarantee that this is the case. Environmental statutes generally are far reaching in scope and seek to obtain jurisdiction over any company or individual involved in or related to a particular piece of land, no matter how tenuous that connection might be. Environmental and related remediation costs are difficult to quantify. Applicable law may impose joint and several liabilities on each potentially responsible party for the cleanup. See "Legal Proceedings" in Item 3. Severe weather, natural disasters, acts of war or terrorism and other external events could significantly impact the Company's business. Severe weather, natural disasters, acts of war or terrorism and other adverse external events could have a significant impact on the Company's ability to conduct business. Although, management has established a disaster recovery plan, there is no guarantee that such plan will allow the Company to operate without disruption if such an event was to occur and the occurrence of any such event could have a material adverse effect on the Company's business, which, in turn, could have a material adverse effect on the Company's financial condition and results of operations. The Company maintains disaster recovery sites to aid it in reacting to circumstances such as those described above. The fourth quarter of 2012 was impacted by Superstorm Sandy which occurred on October 29th causing the Company to vacate its two principal offices in downtown Manhattan and displaced 800 of the Company's employees including substantially all of its capital markets, operations and headquarters staff for in excess of 30 days. Table of Contents 30 The plans and preparations for such eventualities, including the sites themselves, may not be adequate or effective for their intended purpose. Recent weather-related incidents in parts of the United States have resulted in the need to close certain branch offices for short periods of time but have not affected our ability to service our clients in those parts of the country. These experiences lead us to believe that such occurrences will increase in number and severity in the future due to changing weather patterns. Our conflicts of interest policies and procedures may leave us exposed to unidentified or unanticipated risk. Our risk management processes include addressing potential conflicts of interest that arise in our business. Management of potential conflicts of interest has become increasingly complex as we expand our business activities. A perceived or actual failure to address conflicts of interest adequately could affect our reputation, the willingness of clients to transact business with us or give rise to litigation or regulatory actions. Therefore, there can be no assurance that conflicts of interest will not arise in the future that could result in material harm to our business and financial condition. The effect of climate changes on the Company cannot be predicted with certainty. The Company is not directly affected by changes in environmental legislation, regulation or international treaties and the Company is not involved in an industry which is significantly impacted by climate changes except as such changes may affect the general economy of the United States and the rest of the world. In addition, severe weather conditions such as storms, snowfall, and other climatic events may affect one or more offices of the Company. In October 2012, Superstorm Sandy caused dislocation and disruption of the Company's operations. Any such event may materially impact the operations or finances of the Company. The Company maintains disaster recovery plans and property insurance for such emergencies. A significant change in the climate of the world could affect the general growth in the economy, and population growth and create other issues which will over time affect returns on financial instruments and thus the financial markets in general. It is impossible to predict such effects on the Company's business and operations. The downgrade of U.S. long term sovereign debt obligations and issues affecting the sovereign debt of European nations may adversely affect markets and other business. On August 5, 2011, S&P lowered its long term sovereign credit rating on the United States of America from AAA to AA+. Credit agencies have also reduced the credit ratings of various sovereign nations, including Greece, Italy, France and China. While the ultimate impact of such actions is inherently unpredictable, these downgrades could have a material adverse impact on financial markets and economic conditions throughout the world, including, specifically, the United States. Moreover, the market's anticipation of these impacts could have a material adverse effect on our business, financial condition and liquidity. Various types of financial markets, including, but not limited to, money markets, long-term or short-term fixed income markets, foreign exchange markets, commodities markets and equity markets may be adversely affected by these impacts. In addition, the cost and availability of funding and certain impacts, such as increased spreads in money market and other short term rates, have been experienced already as the market anticipated the downgrade. The negative impact that may result from this downgrade or any future downgrade could adversely affect our credit ratings, as well as those of our clients and/or counterparties, and could require us to post additional collateral on loans collateralized by U.S. Treasury securities. The unprecedented nature of this and any future negative credit rating actions with respect to U.S. government obligations will make any impact on our business, financial condition and liquidity unpredictable. In addition, any such impact may not be immediately apparent. In addition, global markets and economic conditions have been negatively impacted by the ability of certain EU member states to service their sovereign debt obligations. The continued uncertainty over the outcome of the EU governments' financial support programs and the possibility that other EU member states may experience similar financial troubles could further disrupt global markets and may negatively impact our business, financial condition and liquidity. Table of Contents 31 The Company's stock price can be volatile. Stock price volatility may make it difficult for an investor to resell shares of the Company's Class A non-voting common stock (the "Class A Stock") at the times and at the prices desired. The price of the Class A Stock can fluctuate significantly in response to a variety of factors including, among other things: • actual or anticipated variations in quarterly results of operations; • operating and stock price performance of other companies that investors deem comparable to the Company; • news reports relating to trends, concerns and other issues in the financial services industry; • perceptions in the marketplace regarding the Company and/or its competitors; • new technology used, or services offered, by competitors; • regulatory issues involving the Company or its competitors; • significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving the Company or its competitors; • a downturn in the overall economy or the equity markets in particular; • failure to effectively integrate acquisitions or realize anticipated benefits from acquisitions; and • the occurrence of any of the other events described in these Risk Factors. General market fluctuations, industry factors and general economic and political conditions and events, such as economic slowdowns or recessions, interest rate changes or credit loss trends, could also cause the Company's stock price to decrease regardless of operating results. The trading volume in the Company's Class A Stock is less than that of larger financial services companies. Although the Company's Class A Stock is listed for trading on the NYSE, the trading volume in its Class A Stock is less than that of larger financial services companies. A public trading market having the desired characteristics of depth, liquidity and orderliness depends on the presence in the marketplace of willing buyers and sellers of the Company's Class A Stock at any given time. This presence depends on the individual decisions of investors and general economic and market conditions over which the Company has no control. Given 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 stock price to fall and increase the volatility of the Class A Stock generally. The holders of Class A Stock do not have the ability to vote on most corporate matters which limits the influence that these holders have over the Company. The Company issues two classes of shares, Class A Stock and Class B voting common stock (the "Class B Stock"). At December 31, 2018, there were 99,665 shares of Class B Stock outstanding compared to 12,941,809 shares of Class A Stock. 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. Over 96% of the Class B voting shares are held by an entity controlled by Mr. Albert Lowenthal, the Chairman and CEO of the Company. Due to the lack of voting power, the Class A Stockholders have limited influence on corporate matters. The Company's Chairman and CEO owns a significant portion of the Company's Class B Stock and therefore can exercise significant control over the corporate governance and affairs of the Company. An entity controlled by the Company's Chairman and CEO, Mr. Albert Lowenthal, owns over 96% of the Class B voting shares. As a result, Mr. Lowenthal can exercise substantial influence over the outcome of most, if not of all corporate actions requiring approval of our stockholders, including the election of directors and approval of significant corporate transactions, which may result in corporate action with which other stockholders do not agree. This Class B voting power may have the effect of delaying or preventing a change in control of the Company or may result 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 controlling stockholder may have potential conflicts of interest with other stockholders including the ability to determine the impact of "say on pay" provisions at the Company. Table of Contents 32 Possible additional issuances of the Company's stock will cause dilution. At December 31, 2018, the Company had 12,941,809 shares of Class A Stock outstanding, outstanding employee stock options to purchase a total of 15,573 shares of Class A Stock, as well as outstanding unvested restricted stock awards granted for an additional 1,289,224 shares of Class A Stock. The Company is further authorized to issue up to 811,937 shares of Class A Stock under share-based compensation plans for which stockholder approval has already been obtained. As the Company issues additional shares, stockholders' holdings will be diluted, perhaps significantly. The issuance of any additional shares of Class A Stock or securities convertible into or exchangeable for Class A Stock or that represent the right to receive Class A Stock, or the exercise of such securities, could be substantially dilutive to holders of our Class A Stock. Holders of our Class A Stock have no preemptive rights that entitle holders to purchase their pro rata share of any offering of shares of any class or series and, therefore, such sales or offerings could result in increased dilution to the Company's stockholders. The market price of the Company's Class A Stock could decline as a result of sales or issuance of shares of Class A Stock or securities convertible into or exchangeable for Class A Stock. The Tax Cuts and Jobs Act may impact our business in unforeseen ways. The enactment of the Tax Cuts and Jobs Act (the "TCJA") on December 22, 2017 will significantly impact the manner in which we determine our federal income tax and may have unforeseen consequences. The TCJA is the first major overhaul of U.S. corporate taxation in almost 20 years with both positive and negative impacts on our business. The positive impacts include reducing the federal corporate income tax rate from 35% to 21% and accelerating the recovery period of the Company’s fixed assets. These positive impacts are offset by new tax provisions intended to expand the federal tax base by disallowing certain expenses that were previously deductible (i.e. 50% of entertainment expenses, deductions for certain senior management compensation, etc.). Changes in taxation on non-U.S earned income may impact our operation of those businesses and our employment practices may need to change in view of the new law. The impact of the TCJA may also have significant impact on our clients and their future behavior in light of the new tax rates applicable to individuals, trusts and unincorporated businesses. The limitation on the deductibility of state and local taxes and real estate taxes for individuals may result in clients moving to lower tax states where we do not have operations. Table of Contents 33 Item 1B. UNRESOLVED STAFF COMMENTS None. Item 2. PROPERTIES The Company and Oppenheimer maintain offices at their headquarters at 85 Broad Street, New York, New York which houses their executive management team and many administrative functions for the firm as well as their research, trading, investment banking, and asset management divisions. Generally, the offices outside of 85 Broad Street serve as bases for sales representatives who process trades and provide other brokerage services in co-operation with Oppenheimer’s New York offices using the data processing facilities located there. The Company maintains an office in Troy, Michigan, which among other things, houses its payroll and human resources departments. Oppenheimer Trust is based in Wilmington, Delaware. Freedom conducts its business from its offices located in Edison, New Jersey. Management believes that its present facilities are adequate for the purposes for which they are used and have adequate capacity to provide for presently contemplated future uses. In addition, the Company has offices in London, England, St. Helier, Jersey, Geneva, Switzerland, Frankfurt, Germany, Tel Aviv, Israel and Hong Kong, China. Table of Contents 34 Item 3. LEGAL PROCEEDINGS Many aspects of the Company's business involve substantial risks of liability. In the normal course of business, the Company has been the subject of customer complaints and has been named as a defendant or co-defendant in various lawsuits or arbitrations creating substantial exposure. The Company is also involved from time to time in certain governmental and self- regulatory agency investigations and proceedings. These proceedings arise primarily from securities brokerage, asset management and investment banking activities. There has been an increased incidence of regulatory investigations in the financial services industry since the financial crisis of 2008, including investigations by multiple regulators of matters involving the same or similar underlying facts, and seeking substantial penalties, fines or other monetary relief. While the ultimate resolution of routine pending litigation, regulatory and other matters cannot be currently determined, in the opinion of management, after consultation with legal counsel, the Company does not believe that the resolution of these matters will have a material adverse effect on its consolidated balance sheet and statement of cash flow. However, the Company's results of operations could be materially affected during any period if liabilities in that period differ from prior estimates. Notwithstanding the foregoing, an adverse result in any of the matters set forth below or multiple adverse results in arbitrations, litigations or regulatory proceedings currently filed or to be filed against the Company, could have a material adverse effect on the Company's results of operations and financial condition, including its cash position. The materiality of legal and regulatory matters to the Company's future operating results depends on the level of future results of operations as well as the timing and ultimate outcome of such legal and regulatory matters. See "Risk Factors — The Company may continue to be adversely affected by the failure of the Auction Rate Securities Market" in Item 1A as well as "Management's Discussion and Analysis of Financial Condition and Results of Operations — Regulatory and Legal Environment — Other Regulatory Matters" and "Management's Discussion and Analysis of Financial Condition and Results of Operations — Factors Affecting 'Forward-Looking Statements'" in Item 7. In accordance with applicable accounting guidance, the Company establishes reserves for litigation and regulatory matters when those matters present loss contingencies that are both probable and reasonably estimable. When loss contingencies are not both probable and reasonably estimable, the Company does not establish reserves. In some of the matters described below, loss contingencies are not probable and reasonably estimable in the view of management and, accordingly, the Company has not established reserves for those matters. For legal or 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 $0 to approximately $30.0 million. This estimated aggregate range is based upon currently available information for those legal proceedings in which the Company is involved, where an estimate for such losses can be made. For certain cases, the Company does not believe that it can make an estimate. The foregoing estimate is based on various factors, including the varying stages of the proceedings (including the fact that many are currently in preliminary stages), the numerous yet-unresolved issues in many of the proceedings and the attendant uncertainty of the various potential outcomes of such proceedings. Accordingly, the Company's estimate will change from time to time, and actual losses may be more than the current estimate. Auction Rate Securities Matters For a number of years, the Company offered auction rate securities ("ARS") to its clients. A significant portion of the market in ARS 'failed' in February 2008 due to credit market conditions, and dealers were no longer willing or able to purchase the imbalance between supply and demand for ARS. See "Risk Factors — The Company may continue to be adversely affected by the failure of the Auction Rate Securities Market" in Item 1A as well as "Management's Discussion and Analysis of Financial Condition and Results of Operations — Regulatory and Legal Environment — Other Regulatory Matters" in Item 7 for additional details. As previously disclosed, Oppenheimer, without admitting or denying liability, entered into a Consent Order (the "Order") with the Massachusetts Securities Division (the "MSD") on February 26, 2010 and an Assurance of Discontinuance ("AOD") with the New York Attorney General ("NYAG" and together with the MSD, the "Regulators") on February 23, 2010, each in connection with Oppenheimer's sales of ARS to retail and other investors in the Commonwealth of Massachusetts and the State of New York. Table of Contents 35 Pursuant to the terms of the Order and AOD, the Company commenced and closed seventeen offers to purchase ARS from customer accounts when the Company's latest offer to purchase expired on October 8, 2018. The Company's purchases of ARS from clients have continued and will, subject to the terms and conditions of the AOD, continue on a periodic basis. Accounts were, and will continue to be, aggregated on a "household" basis for purposes of these offers. As of December 31, 2018, the Company had purchased and holds (net of redemptions) $40.7 million of ARS pursuant to settlements with the Regulators and legal settlements and awards. Oppenheimer has agreed with the NYAG that it will offer to purchase Eligible ARS from Eligible Investors who did not receive an initial purchase offer, periodically, as excess funds become available to Oppenheimer after giving effect to the financial and regulatory capital constraints applicable to Oppenheimer, until Oppenheimer has extended a purchase offer to all Eligible Investors. Such offers will remain open for a period of 75 days from the date on which each such offer to purchase is sent. The ultimate amount of ARS to be repurchased by the Company cannot be predicted with any certainty and will be impacted by redemptions by issuers and client actions during the period, which also cannot be predicted. In addition, pursuant to the Order, Oppenheimer agreed to offer margin loans against eligible collateral for other Massachusetts clients not covered by the offers to purchase. As of December 31, 2018, Oppenheimer had extended margin loans to four holders of Eligible ARS from Massachusetts. Further, Oppenheimer has agreed to (1) no later than 75 days after Oppenheimer has completed extending a purchase offer to all Eligible Investors (as defined in the AOD), use its best efforts to identify any Eligible Investor who purchased Eligible ARS (as defined in the AOD) and subsequently sold those securities below par between February 13, 2008 and February 23, 2010 and pay the investor the difference between par and the price at which the Eligible Investor sold the Eligible ARS, plus reasonable interest thereon; (2) no later than 75 days after Oppenheimer has completed extending a Purchase Offer to all Eligible Investors, use its best efforts to identify Eligible Investors who took out loans from Oppenheimer after February 13, 2008 that were secured by Eligible ARS that were not successfully auctioning at the time the loan was taken out from Oppenheimer and who paid interest associated with the ARS-based portion of those loans in excess of the total interest and dividends received on the Eligible ARS during the duration of the loan (the "Loan Cost Excess") and reimburse such investors for the Loan Cost Excess, plus reasonable interest thereon; (3) upon providing liquidity to all Eligible Investors, participate in a special arbitration process for the exclusive purpose of arbitrating any Eligible Investor's claim for consequential damages against Oppenheimer related to the investor's inability to sell Eligible ARS; and (4) work with issuers and other interested parties, including regulatory and governmental entities, to expeditiously provide liquidity solutions for institutional investors not within the definition of Small Businesses and Institutions (as defined in the AOD) that held ARS in Oppenheimer brokerage accounts on February 13, 2008. Oppenheimer believes that because Items (1) through (3) above will occur only after it has provided liquidity to all Eligible Investors, it will take an extended period of time before the requirements of Items (1) through (3) will take effect. If Oppenheimer fails to comply with any of the terms set forth in the Order, the MSD may institute an action to have the Order declared null and void and reinstitute the previously pending administrative proceedings. If Oppenheimer defaults on any obligation under the AOD, the NYAG may terminate the AOD, at his sole discretion, upon 10 days written notice to Oppenheimer. Reference is made to the Order and the AOD, each as described in Item 3 of the Company's Annual Report on Form 10-K for the year ended December 31, 2009 and attached thereto as Exhibits 10.24 and 10.22 respectively, as well as the subsequent disclosures related thereto in the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2010 through September 30, 2018 and in the Company's Annual Reports on Form 10-K for the years ended December 31, 2010 through and including 2018, for additional details of the agreements with the MSD and NYAG. The Company is continuing to cooperate with investigating entities from states other than Massachusetts and New York. As of December 31, 2018, there were no pending ARS-related cases against Oppenheimer. As of December 31, 2018, eleven ARS matters were concluded in either court or arbitration with Oppenheimer prevailing in four of those matters and the claimants prevailing in seven of those matters. The Company has purchased approximately $7.6 million in ARS from the prevailing claimants in those seven actions. In addition, the Company has made cash payments of approximately $12.7 million as a result of legal settlements with clients. It is possible, however, that other individuals or entities that purchased ARS from Oppenheimer may bring additional claims against Oppenheimer in the future for repurchase or rescission. Table of Contents 36 See "Risk Factors — The Company may continue to be adversely affected by the failure of the Auction Rate Securities Market" in Item 1A and "Management's Discussion and Analysis of Financial Condition and Results of Operations — Regulatory and Legal Environment — Other Regulatory Matters" and "Management's Discussion and Analysis of Financial Condition and Results of Operations — Off-Balance Sheet Arrangements" in Item 7. Other Pending Matters On or about March 13, 2008, Oppenheimer was served in a matter pending in the United States Bankruptcy Court, Northern District of Georgia, captioned William Perkins, Trustee for International Management Associates v. Lehman Brothers, Oppenheimer & Co. Inc., JB Oxford & Co., Bank of America Securities LLC and TD Ameritrade Inc. The Trustee seeks to set aside as fraudulent transfers in excess of $25.0 million in funds embezzled by the sole portfolio manager for International Management Associates, a hedge fund. The portfolio manager purportedly used the broker-dealer defendants, including Oppenheimer, as conduits for his embezzlement. Oppenheimer filed its answer to the complaint on June 18, 2010. Oppenheimer filed a motion for summary judgment, which was argued on March 31, 2011. Immediately thereafter, the Bankruptcy Court dismissed all of the Trustee's claims against all defendants including Oppenheimer. In June 2011, the Trustee filed an appeal with the United States District Court for the Northern District of Georgia ("U.S.N.D. GA"). In addition, on June 10, 2011, the Trustee filed a petition for permission to appeal the dismissal to the United States Court of Appeals for the Eleventh Circuit (the "Court of Appeals"). On July 27, 2011, the Court of Appeals denied the Trustee's Petition. The Trustee then appealed to the U.S.N.D. GA. On March 30, 2012, the U.S.N.D. GA affirmed in part and reversed in part the ruling from the Bankruptcy Court and remanded the matter to the Bankruptcy Court. Discovery has closed and Oppenheimer filed a motion for summary judgment at the end of February 2014. On January 10, 2017, Oppenheimer's motion for summary judgment was granted in full, and judgment was entered in Oppenheimer's favor and the court dismissed the case. On January 24, 2017, the Trustee appealed the summary judgment order to the U.S.N.D. GA. On February 12, 2018, the U.S.N.D. GA issued an order (the "District Court Order") reversing the Bankruptcy Court's summary judgment order and remanding the proceedings to the Bankruptcy Court. In March 2018, Oppenheimer moved to certify the District Court Order for interlocutory appeal. The Trustee opposed the motion for interlocutory appeal. On June 28, 2018, the Eleventh Circuit dismissed the direct appeal. On February 27, 2019, Oppenheimer's motion for interlocutory appeal before the U.S.N.D. GA was denied. The U.S.N.D. GA will set a date for trial to commence sometime in 2019. Oppenheimer believes it has meritorious defenses and intends to defend the claims vigorously. On June 24, 2011, Oppenheimer was served with a petition in a matter pending in state court in Collin County, Texas captioned Jerry Lancaster, Providence Holdings, Inc., Falcon Holdings, LLC and Derek Lancaster v. Oppenheimer & Co., Inc., Oppenheimer Trust Company, Charles Antonuicci, Alan Reichman, John Carley, Park Avenue Insurance, LLC and Park Avenue Bank. The action requests unspecified damages, including exemplary damages, for Oppenheimer's alleged breach of fiduciary duty, negligent hiring, fraud, conversion, conspiracy, breach of contract, unjust enrichment and violation of the Texas Business and Commerce Code. The first amended petition alleges that Oppenheimer held itself out as having expertise in the insurance industry generally and managing insurance companies' investment portfolios but inappropriately allowed plaintiffs' bond portfolios to be used by Park Avenue Insurance Company to secure the sale of Providence Property and Casualty Insurance Company to Park Avenue Insurance Company. Following removal to the United States District Court for the Eastern District of Texas, Sherman Division, Providence Holdings, Inc. filed a new action in that court against Oppenheimer, Oppenheimer Trust Company, and two individuals, re-asserting basically the same claims as above. On March 18, 2013, the Texas court approved the parties' stipulation to stay the action pending resolution of all claims among the parties in the action pending in Oklahoma styled State of Oklahoma ex rel. Holland v. Providence Holdings, Inc., described below. On April 15, 2011, in an action styled State of Oklahoma ex rel. Holland v. Providence Holdings, Inc., et al. in the Oklahoma County District Court, Providence Holdings, Inc. asserted cross-claims against Oppenheimer Holdings Inc., Oppenheimer Asset Management Inc., Oppenheimer Investment Management LLC, and Oppenheimer Trust Company of Delaware Inc. related to the same facts at issue in the Texas litigation discussed above. These cross-claims included claims for breach of fiduciary duty, various theories of fraud, violation of Texas commercial statutes, breach of contract, interference with prospective business advantage, and loss of business opportunity and sought undisclosed damages. That case is in fact discovery. On September 12, 2016, the Texas court administratively closed the 2012 TX Case pending resolution of the aforementioned Oklahoma action. Oppenheimer believes it has meritorious defenses to the claims raised and intends to defend against these claims vigorously, including pursuing dismissal of the claims against it. Table of Contents 37 In June 2012, a claim was filed in the Circuit Court, 11th Judicial Circuit in Miami-Dade County Florida, Probate Division (which was subsequently transferred in 2014 to the Civil Division ("Trial Court") where it remains), in a matter captioned Estate of Idelle Stern, by and through the court ordered limited ad litem, Rochelle Kevelson, Tikvah Lyons, and Joyce Genauer v. Oppenheimer Trust Company of Delaware Inc., Oppenheimer & Co. Inc., Oppenheimer Asset Management Inc., Eli Molallen, James P. Carley Jr., and Theron Hunting Worth Defendants. Plaintiffs allege that defendants failed properly to communicate with certain beneficiaries of the Stern Survivors Trust, Stern Marital Trust, and Stern Credit Shelter Trust (collectively, the "Stern Trusts") established by Idelle Stern prior to her death; that defendants failed to adequately communicate with Ms. Stern, who was the co-trustee of the Stern Trusts, during her lifetime; and that defendants failed to provide trust accountings to all qualified beneficiaries. There are other causes of action based on alleged Florida Blue Sky violations, elder abuse, breach of trust, constructive fraud and conspiracy. Plaintiffs sought damages of approximately $8 million, as well as treble damages under the applicable Florida elder abuse statute. On April 20, 2018, the Trial Court entered its Jury Trial Order, setting forth a new pre-trial schedule and providing for the trial to commence on February 4, 2019. In January 2019, Oppenheimer, on behalf of the defendants, reached an agreement in principle to settle the case pursuant to which Oppenheimer agreed to pay $1.8 million in exchange for plaintiffs' dismissing all claims against defendants with prejudice. In January 2017, Oppenheimer received a Notice of Civil Claim in the Supreme Court of British Columbia, Canada by Teck Metals Ltd. against Oppenheimer Holdings Inc. as well as co-defendants Western Forest Products Inc., Xylem Canada Company/Societe Xylem Canada, JRM Financial Services Ltd. and Glencore Corporation Canada. The civil claim seeks damages and/or the cost of environmental clean-up for property purportedly managed during the period 1965-66 by a predecessor company of Oppenheimer Holdings Inc. The underlying claim involves alleged adverse environmental impact at the Sunro Mine, located in British Columbia, which properties are now owned by plaintiff and seeks unspecified damages from defendants. To date, the plaintiff has not actively prosecuted the claim. The other defendants have various alleged historical connections to the property, which plaintiff contends allows plaintiff to assert claims against those defendants, as well as Oppenheimer Holdings Inc. Oppenheimer believes it has meritorious defenses to the claims and intends to defend itself vigorously. See also "Management's Discussion and Analysis of Financial Condition and Results of Operations — Regulatory and Legal Environment — Other Regulatory Matters" in Item 7. Table of Contents 38 Item 4. MINE SAFETY DISCLOSURES Not applicable. Table of Contents 39 PART II Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (a) The Company's Class A Stock is listed and traded on the NYSE (trading symbol "OPY"). The Class B Stock is not traded on any stock exchange and, as a consequence, there is only limited trading in the Class B Stock. 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. As of December 31, 2018, there were 1,304,797 shares of Class A Stock underlying outstanding options and restricted share awards. 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. (b) The following table sets forth information about the stockholders of the Company as of February 28, 2019 as set forth in the records of the Company's transfer agent and registrar: Number of Shares Number of Stockholders of Record Class A Stock 12,946,841 81 Class B Stock 99,665 38 (c) Share-Based Compensation Plans The Company has a 2006 Equity Incentive Plan, adopted December 11, 2006 and amended in December 2011, and had a 1996 Equity Incentive Plan, as amended March 10, 2005, which expired on April 18, 2006 (together "EIP"), under which the Compensation Committee of the Board of Directors of the Company has granted options to purchase Class A Stock, restricted Class A Stock awards and Class A Stock awards to officers and key employees of the Company and its subsidiaries. From 2011 through 2013, restricted Class A Stock awards were granted to the Company's non-employee directors as approved by a committee formed for that purpose. With the adoption of the OIP (as defined below), the amount and terms of such grants are determined by the Compensation Committee of the Company's Board of Directors. Oppenheimer has an Employee Share Plan ("ESP") under which the Compensation Committee of the Board of Directors of the Company has granted stock awards and restricted stock awards to key management employees of the Company and its subsidiaries. On February 26, 2014, the Company adopted the Oppenheimer Holdings Inc. 2014 Incentive Plan (the "OIP") which pursuant to its terms amends and restates each of the EIP and ESP and incorporates each of the EIP and ESP into the OIP. The Company's share-based compensation plans are described in note 15 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): Table of Contents 40 As of December 31,2013 2014 2015 2016 2017 2018 Oppenheimer Class A Stock 100 96 72 77 110 105 S&P 500 100 111 111 121 145 136 S&P 500 / Diversified Financials 100 115 103 123 151 135 Stock Buy-Back On May 5, 2017, the Company announced that its board of directors approved a share repurchase program that authorizes the Company to purchase up to 650,000 shares of the Company's Class A Stock, representing approximately 5% of its 13,178,571 then issued and outstanding shares of Class A Stock. This authorization supplemented the 40,734 shares that remained authorized and available under the Company's previous share repurchase program covering up to 665,000 shares of the Company's Class A Stock, which was announced on September 15, 2015, for a total of 690,734 shares authorized and available for repurchase. As of January 1, 2018, 508,906 shares were available to be purchased under this program. During the year ended December 31, 2018, the Company purchased and canceled an aggregate of 236,122 shares of Class A Stock for a total consideration of $5.9 million ($24.96 per share). As of December 31, 2018, 272,784 shares were available to be purchased under this program. 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 senior secured debt. The Company will cancel all of the shares repurchased. The Company expects to continue the share repurchase program indefinitely. The Company will base the timing and amounts of any purchases on market conditions and other factors including price, regulatory requirements and capital availability. The share repurchase program does not obligate the Company to repurchase any dollar amount or number of share of Class A Stock. Depending on market conditions and other factors, the Company may commence or suspend repurchases from time to time without notice. Table of Contents 41 Item 6. SELECTED FINANCIAL DATA The following table presents selected financial information derived from the consolidated financial statements of the Company for each of the five years in the period ended December 31, 2018: (Expressed in thousands, except number of shares and per share amounts) 2018 2017 2016 2015 2014 Revenue $958,154 $920,338 $857,779 $897,801 $981,135 Net income (loss) from continuing operations 28,876 21,870 (9,630)(2,834)5,056 Net income from discontinued operations —1,130 10,121 5,732 4,505 Net income 28,876 23,000 491 2,898 9,561 Net income (loss) attributable to non-controlling interest, net of tax (16)184 1,652 936 735 Net income (loss) attributable to Oppenheimer Holdings Inc.$28,892 $22,816 $(1,161)$1,962 $8,826 Basic net income (loss) per share attributable to Oppenheimer Holdings Inc. (1) Continuing operations $2.18 $1.65 $(0.72)$(0.21)$0.37 Discontinued operations —0.07 0.63 0.35 0.28 Net income (loss) per share $2.18 $1.72 $(0.09)$0.14 $0.65 Diluted net income (loss) per share attributable to Oppenheimer Holdings Inc. (1) Continuing operations $2.05 $1.60 $(0.72)$(0.21)$0.36 Discontinued operations —0.07 0.63 0.35 0.26 Net income (loss) per share $2.05 $1.67 $(0.09)$0.14 $0.62 Total assets $2,240,314 $2,438,517 $2,236,930 $2,698,004 $2,791,479 Long term debt $199,096 $198,837 $149,352 $148,868 $148,383 Total liabilities $1,694,992 $1,914,606 $1,723,596 $2,172,922 $2,257,747 Cash dividends per share of Class A and Class B Stock $0.44 $0.44 $0.44 $0.44 $0.44 Total Oppenheimer Holdings Inc. stockholders' equity $545,322 $523,550 $510,703 $518,058 $527,644 Book value per share attributable to Oppenheimer Holdings Inc. (1)$41.81 $39.55 $38.22 $38.84 $38.71 Number of shares of capital stock outstanding (1)13,041,474 13,238,868 13,360,760 13,338,166 13,630,368 (1) The Class A Stock and Class B Stock are combined because they are of equal rank for purposes of dividends and in the event of a distribution of assets upon liquidation, dissolution or winding up. Table of Contents 42 Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company's consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The following discussion should be read in conjunction with the consolidated financial statements and notes thereto which appear elsewhere in this annual report. The Company engages in a broad range of activities in the securities industry, including retail securities brokerage, institutional sales and trading, market-making, research, investment banking (both corporate and public finance), investment advisory and asset management services and trust services. Its principal subsidiaries are Oppenheimer & Co. Inc. ("Oppenheimer") and Oppenheimer Asset Management Inc. ("OAM"). As of December 31, 2018, the Company provided its services from 92 offices in 24 states located throughout the United States, offices in Tel Aviv, Israel, Hong Kong, China, London, England, St. Helier, Isle of Jersey, Frankfurt, Germany and Geneva, Switzerland. Client assets administered by the Company as of December 31, 2018 totaled $80.1 billion. The Company provides investment advisory services through OAM and Oppenheimer Investment Management LLC ("OIM") and Oppenheimer's financial adviser direct programs. At December 31, 2018, client assets under management ("AUM") totaled $26.7 billion. The Company provides trust services and products through Oppenheimer Trust Company of Delaware. The Company provides discount brokerage services through Freedom Investments, Inc. ("Freedom"). Through OPY Credit Corp., the Company offers syndication as well as trading of issued syndicated corporate loans. At December 31, 2018, the Company employed 2,976 employees (2,918 full-time and 58 part-time), of whom 1,073 were financial advisers. Critical Accounting Policies The Company's accounting policies are essential to understanding and interpreting the financial results reported on the consolidated financial statements. The significant accounting policies used in the preparation of the Company's consolidated financial statements are summarized in note 2 to those statements. 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 policies: Fair Value Measurements The accounting guidance for the fair value measurement of financial assets, which defines fair value, establishes a framework for measuring fair value, establishes a fair value measurement hierarchy, and expands fair value measurement disclosures. Fair value, as defined by the accounting guidance, is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy established by this accounting guidance prioritizes the inputs used in valuation techniques into the following three categories (highest to lowest priority): Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets; Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly; and Level 3: Unobservable inputs that are significant to the overall fair value measurement. The Company's financial instruments that are recorded at fair value generally are classified within Level 1 or Level 2 within the fair value hierarchy using quoted market prices or quotes from market makers or broker-dealers. Financial instruments classified within Level 1 are valued based on quoted market prices in active markets and consist of U.S. Treasury and Agency securities, corporate equities, and certain money market instruments. Level 2 financial instruments primarily consist of investment grade and high-yield corporate debt, convertible bonds, mortgage and asset-backed securities, and municipal obligations. Financial instruments classified as Level 2 are valued based on quoted prices for similar assets and liabilities in active markets and quoted prices for identical or similar assets and liabilities in markets that are not active. Some financial instruments are classified within Level 3 within the fair value hierarchy as observable pricing inputs are not available due to limited market activity for the asset or liability. Such financial instruments include certain distressed municipal securities, auction rate securities ("ARS") and investments in hedge funds and private equity funds where the Company, through its subsidiaries, is general partner. Table of Contents 43 Legal and Regulatory Reserves The Company records reserves related to legal and regulatory proceedings in accounts payable and other liabilities. The determination of the amounts of these reserves requires significant judgment on the part of management. In accordance with applicable accounting guidance, the Company establishes reserves for litigation and regulatory matters where available information indicates that it is probable a liability had been incurred at the date of the consolidated financial statements and the Company can reasonably estimate the amount of that loss. When loss contingencies are not probable and cannot be reasonably estimated, the Company does not establish reserves. When determining whether to record a reserve, management considers many factors including, but not limited to, the amount of the claim; the stage and forum of the proceeding, the sophistication of the claimant, the amount of the loss, if any, in the client's account and the possibility of wrongdoing, if any, on the part of an employee of the Company; the basis and validity of the claim; previous results in similar cases; and applicable legal precedents and case law. Each legal and regulatory proceeding is reviewed with counsel in each accounting period and the reserve is adjusted as deemed appropriate by management. Any change in the reserve amount is recorded in the results of that period. The assumptions of management in determining 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. Goodwill The Company defines a reporting unit as an operating segment. The Company's goodwill resides in its Private Client Division ("PCD") reporting unit. Goodwill of a reporting unit is subject to at least an annual test for impairment to determine if the estimated fair value of a reporting unit is less than its carrying amount. Goodwill of a reporting unit is required to be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Due to the volatility in the financial services sector and equity markets in general, determining whether an impairment of goodwill has occurred is increasingly difficult and requires management to exercise significant judgment. The Company's annual goodwill impairment analysis performed at December 31, 2018 applied the same valuation methodologies with consistent inputs as that performed at December 31, 2017, as follows: In estimating the fair value of the PCD reporting unit, the Company uses traditional standard valuation methods, including the market comparable approach and income approach. The market comparable approach is based on comparisons of the subject company to public companies whose stocks are actively traded ("Price Multiples") or to similar companies engaged in an actual merger or acquisition ("Precedent Transactions"). As part of this process, multiples of value relative to financial variables, such as earnings or stockholders' equity, are developed and applied to the appropriate financial variables of the subject company to indicate its value. The income approach involves estimating the present value of the subject company's future cash flows by using projections of the cash flows that the business is expected to generate, and discounting these cash flows at a given rate of return ("Discounted Cash Flow" or "DCF"). Each of these standard valuation methodologies requires the use of management estimates and assumptions. In its Price Multiples valuation analysis, the Company uses various operating metrics of comparable companies, including revenues, after-tax earnings, EBITDA as well as price-to-book value ratios at a point in time. The Company analyzes prices paid in Precedent Transactions that are comparable to the business conducted in the PCD. The DCF analysis includes the Company's assumptions regarding discount rate, growth rates of the PCD's revenues, expenses, EBITDA, and capital expenditures, adjusted for current economic conditions and expectations. The Company weighs each of the three valuation methods equally in its overall valuation. Given the subjectivity involved in selecting which valuation method to use, the corresponding weightings, and the input variables for use in the analyses, it is possible that a different valuation model and the selection of different input variables could produce a materially different estimate of the fair value of the PCD reporting unit. At each annual goodwill impairment testing date, the PCD reporting unit had a fair value that was substantially in excess of its carrying value. See note 18 to the consolidated financial statements appearing in Item 8 for further discussion. Intangible Assets Indefinite intangible assets are comprised of trademarks, trade names and an Internet domain name. These intangible assets carried at $32.1 million, which are not amortized, are subject to at least an annual test for impairment to determine if the estimated fair value is less than their carrying amount. The fair value of the trademarks and trade names was substantially in excess of its carrying value at December 31, 2018. See note 18 to the consolidated financial statements appearing in Item 8 for further discussion. Table of Contents 44 Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and the results of recent operations. The Company records uncertain tax positions in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740, "Income Taxes" on the basis of a two-step process whereby it determines 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, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company records interest and penalties accruing on unrecognized tax benefits in income (loss) before income taxes as interest expense and other expense, respectively, in its consolidated statement of operations. The Company permanently reinvests eligible earnings of its foreign subsidiaries and, accordingly, does not accrue any U.S. income taxes that would arise if such earnings were repatriated. To the extent that a company's accounting for certain income tax effects of the TCJA is incomplete but the company is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the TCJA. The Company determined that there were no material changes from the 2017 provisional estimate. New Accounting Pronouncements Recently issued accounting pronouncements are described in note 2 to the consolidated financial statements appearing in Item 8. Table of Contents 45 Business Environment The securities industry is directly affected by general economic and market conditions, including fluctuations in volume and price levels of securities and changes in interest rates, inflation, political events, investor confidence, investor participation levels, legal and regulatory, accounting, tax and compliance requirements and competition, all of which have an impact on commissions, firm trading, fees from accounts under investment management as well as fees for investment banking services, and investment and interest income as well as on liquidity. Substantial fluctuations can occur in revenue and net income due to these and other factors. The Company is focused on growing its private client and asset management businesses through strategic additions of experienced financial advisers in its existing branch system and employment of experienced money management personnel in its asset management business as well as deploying its capital for expansion through targeted acquisitions. In addition, the Company is committed to the improvement of its technology capability to support client service and the expansion of its capital markets capabilities while addressing the issue of managing its expenses. Regulatory and Legal Environment The Company's brokerage business is subject to regulation by, among others, the Securities and Exchange Commission (the "SEC"), the Commodities Futures Trading Commission, the National Futures Association, the Municipal Securities Rulemaking Board and the Financial Industry Regulatory Authority ("FINRA") in the United States, the Financial Conduct Authority ("FCA") in the United Kingdom, the Jersey Financial Services Commission in the Isle of Jersey, the Securities and Futures Commission in Hong Kong, and various state securities regulators in the United States. In addition, Oppenheimer Israel (OPCO) Ltd. operates under the supervision of the Israel Securities Authority. Past events surrounding corporate accounting and other activities leading to investor losses caused increased regulation of public companies. Certain legislators continue to publicly advocate that the SEC has not taken adequate enforcement action against firms and individuals. Various states are imposing their own regulations that make compliance more difficult and more expensive to monitor. In July 2010, Congress enacted extensive legislation entitled the Wall Street Reform and Consumer Protection Act (the "Dodd- Frank Act") in which it mandated that the SEC and other regulators conduct comprehensive studies and issue new regulations based on their findings to control the activities of financial institutions in order to protect the financial system, the investing public and consumers from issues and failures that occurred in the 2008-9 financial crisis. Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships with, Hedge Funds and Private Equity Funds (the "Volcker Rule") was published by the U.S. Federal Reserve Board as required by the Dodd-Frank Act in 2011. The Volcker Rule is not applicable to the Company. Recent changes have narrowed the application of the Volcker Rule to fewer institutions and broadened the ability of banks to service their clients through the use of their balance sheet. In April 2016, the DOL finalized its definition of fiduciary under the Employee Retirement Income Security Act through the release of new rules and changes to interpretations of six prohibited transaction exemptions which together set a new standard for the treatment and effects of advice given to retirement investors ("DOL Fiduciary Rules"). Under this rule, investment advice given to an employee benefit plan or an individual retirement account ("IRA") would be considered fiduciary advice. In March 2018, the U.S. 5th Circuit Court of Appeals found that the DOL did not have the jurisdiction to adopt the aforementioned rules and vacated the DOL Fiduciary Rules effective in June 2018. On April 18, 2018, the SEC announced its proposed "Regulation Best Interest," a package of rulemakings and interpretations that address customers' relationships with investment advisers and broker-dealers. Regulation Best Interest would enact an intermediate standard requiring advisers and broker-dealers to act in the clients' "best interest" at all times. The proposed rules would require substantially greater record keeping than is currently the case. The rules would be applicable to all customers of broker-dealers and investment advisers. The public comment period applicable to Regulation Best Interest expired on August 7, 2018. The SEC has indicated its intention to move forward with a final rule proposal in 2019. It is too soon to predict whether and in what form the SEC will adopt Regulation Best Interest, the effect it may have on broker-dealers and investment advisers generally, the specific effect it will have on the Company's broker-dealer and investment management businesses, and the effect it will have on the Company’s competitive position in the financial services industry. Table of Contents 46 During 2017, the Company reviewed its business and operating models in light of the DOL Fiduciary Rules and made significant structural and operational changes to the Company's broker-dealer and investment management businesses. The changes have had a negative impact on revenues derived from retirement accounts and the desirability of servicing such accounts except when they are participating in fixed fee based programs. The Company is reviewing its business and operating models in light of the 5th Circuit ruling and the proposed Regulation Best Interest and may make further structural and operational changes in light of the vacated DOL Fiduciary Rules and in anticipation of the SEC adopting a version of the proposed Regulation Best Interest. The European Commission recently adopted several acts under the revised Markets in Financial Instruments Directive (known as "MiFID II") that prevent broker-dealers operating in the European Union ("EU") from "bundling" the cost of research together with trading commissions. These rules became effective on January 3, 2018. The ability of the Company to be compensated for equity research activities has been reduced and institutional clients are required to make payments for research through cash payments rather than transaction based commissions. MiFID II is already having an impact on the manner in which business is being conducted in the United Kingdom and in Europe with a noticeable reduction in the availability of equity research particularly in relation to smaller issuers. The long term effects of these changes on global securities markets and on competition in the EU and UK are impossible to predict. In June 2016, in a referendum to consider the United Kingdom's continued participation in the EU, the United Kingdom voted in favor of withdrawing from the EU ("Brexit"). The British government instituted Rule 50 on March 30, 2017 thereby beginning a two-year period during which Great Britain and the EU will define their relationship effective with Great Britain's departure from the EU. Brexit has created significant uncertainty in both the United Kingdom and in the other member states around its economic impact and the operating requirements for businesses located in the United Kingdom after the effective date. The Company has a London-based business and the ability for it to passport its employees to conduct a financial services business in the EU post-Brexit is in considerable doubt. In addition, a number of its London-based employees do not hold British passports, although a number have applied for and received the right to continue to be employed in the United Kingdom. To date, there has been no discernible progress on the post-Brexit relationship between the EU and the UK. Failing the implementation of an agreed extension, the UK will leave the EU in March 2019 under a "hard" Brexit, leaving considerable uncertainty as to the ongoing relationship and a likely negative impact on all parties. Given the lack of clarity on the ultimate post-Brexit relationship between Great Britain and the EU, the Company cannot fully determine what, if any, impact Brexit may have on its operations, both inside and outside the United Kingdom. The Company has opened an office in Frankfurt, Germany in the EU for its investment banking business and it will be available in the eventuality that it is needed in order to continue to conduct a securities business in the EU post-Brexit. The anti-money laundering ("AML") rules and requirements that were created by the passage of the USA Patriot Act in the U.S. and similar laws in other countries have created significant costs of compliance and can be expected to continue to do so. The U.S. Financial Crimes Enforcement Network ("FinCEN") has heightened its review of the activities of broker-dealers. This increased focus is likely to lead to significantly higher levels of enforcement and higher fines and penalties on broker-dealers. Regulators have expanded their views of the requirements of the USA Patriot Act, as well as their views of the enforcement of the provisions of the Bank Secrecy Act and the Foreign Corrupt Practices Act with respect to the amount of diligence and on- going monitoring required by financial institutions of both their foreign and domestic clients and their activities. As a result, the Company has significantly increased its AML staffing, made additional investments in its due diligence systems, upgraded its monitoring systems and significantly revised its AML policies and procedures. In May 2016, FinCEN's proposed rule on customer due diligence ("CDD Rule") was finalized and became effective on May 11, 2018. FINRA has recently announced the expansion of AML regulations to include the collection and analysis of other types of client activity. The CDD and associated rules are significantly more intrusive on the activities of U.S.-based clients and will have the effect of increasing the costs associated with opening new accounts and creating new business relationships. The Trump Administration has announced its intention to ease the regulatory burden on businesses. There can be no assurance that such easing will in fact take place, that it will have a favorable impact on financial service providers such as the Company, or that it will have a positive effect on the Company's business. Pursuant to FINRA Rule 3130, the chief executive officers ("CEOs") of member broker-dealers (including the CEO of Oppenheimer) are required to certify that their companies have processes in place to establish and test supervisory policies and procedures reasonably designed to achieve compliance with federal securities laws and regulations, including applicable regulations of self-regulatory organizations. The CEO of the Company is required to make such a certification on an annual basis and did so in March 2018. Table of Contents 47 In September 2015, FINRA released Regulatory Notice 15-33 which provides guidance on effective liquidity risk management strategies. Based on the guidelines, broker-dealers are expected to rigorously evaluate their potential liquidity needs related to both market wide stress and idiosyncratic stresses, devote sufficient resources to measuring risks applicable to their businesses and report the results of such measurement to senior management. The reporting requirement includes a review of risks that are based on historical events and stresses that could occur but have not yet been observed. Additionally, based on the guidelines, every broker-dealer must consider developing contingency plans for addressing those risks so that the firm will have sufficient liquidity to operate after the stress occurs while continuing to protect customer assets. It must also conduct stress tests and other reviews to evaluate the effectiveness of the contingency plans, have a training plan for its staff and have tested the processes on which it intends to rely if such stresses occur. The Company has enhanced its liquidity risk management practices in light of these requirements. On January 8, 2018, FINRA released for comment Regulatory Notice 18-02 "Liquidity Reporting and Notification" which would require member firms to notify FINRA no more than 48 hours after specified events that may signal an adverse change in liquidity risk. This notice would also require members to file a new Supplemental Liquidity Schedule ("SLS") detailing the largest customer and counterparty exposures as a supplement to the FOCUS Report. On the new SLS, member firms would report information related to specified financing transactions and other sources or uses of liquidity. The information would include among other things, financing terms, collateral types and the identity of large counterparties. The comment period has ended without the publication of final rules. Other Regulatory Matters On January 27, 2015, the SEC approved an Offer of Settlement from Oppenheimer and issued an Order Instituting Administrative and Cease and Desist Proceedings (the "SEC Order"). Pursuant to the SEC Order, Oppenheimer was ordered to, amongst other things, retain an independent consultant to review Oppenheimer's policies and procedures relating to anti-money laundering and Section 5 of the Securities Act of 1933. On February 19, 2015, the board of directors formed a Special Committee (later replaced by the Compliance Committee) in order to engage an independent law firm to conduct the review set forth above. On April 22, 2015, the Special Committee agreed to retain Kalorama Partners, LLP ("Kalorama") to act as the independent law firm. In July 2015, the Company created a Compliance Committee made up of independent directors to oversee the Company's compliance with applicable rules and regulations. On December 15, 2016, the Company's agreement with Kalorama expired by its terms. In May and June 2017, Kalorama delivered to the Company reports in connection with the January 2015 SEC Order, and another report in connection with the SEC's Municipalities Continuing Disclosure Cooperation "MCDC Initiative " (collectively, the "Required Reports"). Each of the reports has been reviewed by the Company and the Compliance Committee. In June 2018, the SEC began an examination of the Company to review the Company's assertions with respect to its fulfillment of Kalorama's recommendations in the Required Reports. That examination concluded in November of 2018. On October 29, 2018, Kalorama resigned as the independent law firm. On February 1, 2019 the Company engaged Locke Lord and Exiger LLC as successor independent consultants (“Successor IC’s”) to complete the review of the implementation of the recommendations made in the Required Reports. The Company expects to work with the Successor IC’s to finalize the implementation the remaining recommendations highlighted by the SEC exam staff during the examination. Since August 2014, Oppenheimer has been responding to information requests from the SEC regarding the supervision of one of its former financial advisers who was indicted and convicted of insider trading. Oppenheimer is continuing to cooperate with the SEC inquiry. Since September 2016, Oppenheimer has been responding to information requests from FINRA (including FINRA's Enforcement Division) regarding the supervision of Oppenheimer ’s sale of unit investment trusts from 2011 to 2015. The Company understands that the inquiry is part of a larger targeted examination or "sweep" examination involving many other brokerage firms. Oppenheimer is continuing to cooperate with the FINRA inquiry. On February 12, 2018, the SEC Division of Enforcement ("Enforcement Division") announced the Share Class Selection Disclosure Initiative ("SCSD Initiative") pursuant to which investment advisers were encouraged to self-report possible securities laws violations relating to the failure to make certain disclosures concerning mutual fund share class selection. On June 11, 2018, Oppenheimer and OAM notified the Enforcement Division that it intended to participate in the SCSD Initiative. Oppenheimer and OAM filed the information required by the SCSD Initiative on September 19, 2018. On February 7, 2019, Oppenheimer (and its affiliate Oppenheimer Asset Management, collectively “Oppenheimer”) filed an Offer of Settlement with the SEC (the “Offer”) pursuant to which Oppenheimer offered to disgorge approximately $3.5 million (the “Disgorgement Table of Contents 48 Amount”) (including pre-judgment interest) of 12b-1 fees and agree to certain undertakings including the following: (i) within 30 days of the entry of an SEC Order, review and correct as necessary all relevant disclosure documents concerning mutual fund share class selection and 12b-1 fees; (ii) within 30 days of the entry of an SEC Order, evaluate whether existing clients should be moved to a lower-cost share class and move clients as necessary; (iii) within 30 days of the entry of an SEC Order, evaluate, update (if necessary), and review for the effectiveness of their implementation, Oppenheimer ’s policies and procedures so that they are reasonably designed to prevent violations of the Investment Advisers Act in connection with disclosures regarding mutual fund share class selection; (iv) within 30 days of the entry of an SEC Order, notify affected investors (i.e., those former and current clients who, during the relevant period of inadequate disclosure, purchased or held 12b-1 fee paying share class mutual funds when a lower-cost share class of the same fund was available to the client) of the settlement terms of the Order in a clear and conspicuous fashion; and (v) within 40 days of the entry of an SEC Order, certify, in writing, compliance with the undertaking(s) set forth above. Oppenheimer is awaiting the entry of an SEC Order consistent with the above. For a number of years, the Company offered auction rate securities ("ARS") to its clients. A significant portion of the market in ARS 'failed' because, in the tight credit market in and subsequent to 2008, dealers were no longer willing or able to purchase the imbalance between supply and demand for ARS. Beginning in February 2008, uncertainties in the credit markets resulted in substantially all of the ARS market experiencing failed auctions. Certain clients of the Company continue to hold ARS in their individual or corporate accounts. Issuer redemptions and tender offers, combined with purchases by the Company, have reduced client holdings by approximately 99%. In February 2010, Oppenheimer finalized settlements with the Regulators concluding investigations and administrative proceedings by the Regulators concerning Oppenheimer's marketing and sale of ARS. Pursuant to the settlements with the Regulators, Oppenheimer agreed to extend offers to repurchase ARS from certain of its clients subject to certain terms and conditions. In addition to the settlements with the Regulators, Oppenheimer has also reached settlements of and received adverse awards in legal proceedings with various clients where the Company is obligated to purchase ARS. Pursuant to completed Purchase Offers (as defined) under the settlements with the Regulators and client related legal settlements and awards to purchase ARS, as of December 31, 2018, the Company purchased and holds (net of redemptions) approximately $40.7 million in ARS from its clients. As of December 31, 2018, the Company had no outstanding ARS purchase commitments related to the settlements with the Regulators. In addition, the Company is committed to purchase another $7.3 million from clients through 2020 under legal settlements and awards. The Company's clients held at Oppenheimer approximately $22.4 million of ARS at December 31, 2018 exclusive of amounts that 1) were owned by Qualified Institutional Buyers ("QIBs"), 2) were transferred to the Company after February 2008, 3) were purchased by clients after February 2008, or 4) were transferred from the Company to other securities firms after February 2008. See "Off-Balance Sheet Arrangements" herein for additional details. As part of its ongoing business, the Company records reserves for legal expenses, judgments, fines and/or awards attributable to litigation and regulatory matters. In connection therewith, the Company has maintained its legal reserves at levels it believes will resolve outstanding matters, but may increase or decrease such reserves as matters warrant. In accordance with applicable accounting guidance, the Company establishes reserves for litigation and regulatory matters when those matters present loss contingencies that are both probable and reasonably estimable. When loss contingencies are not both probable and reasonably estimable, the Company does not establish reserves. See "Legal Proceedings" in Item 3 and note 16 to the consolidated financial statements appearing in Item 8. Other Matters The Company operates in all state jurisdictions in the United States and is thus subject to regulation and enforcement under the laws and regulations of each of these jurisdictions. The Company has been and expects that it will continue to be subject to investigations and some or all of these may result in enforcement proceedings as a result of its business conducted in the various states. In particular, many states have become more aggressive and have imposed larger fines in connection with state registration violations than was previously the case. Table of Contents 49 Business Continuity The Company is committed to an on-going investment in its technology and communications infrastructure including extensive business continuity planning and investment. These costs are on-going and the Company believes that current and future costs will exceed historic levels due to business and regulatory requirements. The Company maintains a data center which is housed in a different location in New York City from its headquarters. The Company continues to review the adequacy of its remote data center and anticipates that, over the next few years, it may make a determination to move the center to a more remote location than where it currently resides. There is no guarantee that in the event of a significant business disruption that the Company's business continuity plans will be successful in restoring operations in a timely manner. Cybersecurity For many years, the Company has sought to maintain the security of its clients' data, limit access to its data processing environment, and protect its data processing facilities. See "Risk Factors — The Company may be exposed to damage to its business or its reputation by cybersecurity incidents" in Item 1A. Recent examples of vulnerabilities by other companies and the government that have resulted in loss of client data and fraudulent activities by both domestic and foreign actors have caused the Company continually to review its security policies and procedures and to take additional actions to protect its network and its information. Given the importance of the protection of client data, regulators have developed increased oversight of cybersecurity planning and protections that broker-dealers and other financial service providers have implemented. Such planning and protection are subject to the SEC's and FINRA's oversight and examination on a periodic or targeted basis. The Company expects that regulatory oversight will intensify, as a result of publicly announced data breaches by other organizations involving tens of millions of items of personally identifiable information. The Company continues to implement protections and adopt procedures to address the risks posed by the current information technology environment. The Company has significantly increased the resources dedicated to this effort and believes that further increases may be required in the future, in anticipation of increases in the sophistication and persistency of such attacks. There can be no guarantee that the Company's cybersecurity efforts will be successful in discovering or preventing a security breach. Outlook The Company recognizes the importance of compliance with applicable regulatory requirements and has committed to performing rigorous and ongoing assessments of its compliance and risk management efforts, to investing in people and programs, and to providing a platform with first class investment ideas and services. The Company is committed to continuing to improve its technology capabilities to ensure compliance with industry regulations, support client service and expand its wealth management and capital markets capabilities. The Company's long-term growth plan is to continue to expand existing offices by hiring experienced professionals as well as expand through the purchase of operating branch offices from other broker-dealers or the opening of new branch offices in attractive locations, and to continue to grow and develop the existing trading, investment banking, investment advisory and other divisions. 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 competitors have shown some success. Equally important is the search for viable acquisition candidates. The Company's long-term intention is to pursue growth by acquisition where it can find a comfortable match in terms of corporate goals and personnel at a price that would provide the Company's stockholders with incremental value. The Company reviews potential acquisition opportunities from time to time, while evaluating and managing its existing businesses. The Company may use all or a portion of the net proceeds of its June 2017 refinancing for the acquisition of related businesses. Table of Contents 50 Results of Operations The Company reported net income attributable to Oppenheimer Holdings Inc. of $28.9 million or $2.18 basic net income per share for the year ended December 31, 2018 compared with net income of $22.8 million or $1.72 basic net income per share for the year ended December 31, 2017. Income before income taxes from continuing operations for the year ended December 31, 2018 was $44.9 million compared with income before income taxes from continuing operations of $19.7 million for the year ended December 31, 2017. Revenue from continuing operations for the year ended December 31, 2018 was $958.2 million, an increase of 4.1% compared with revenue from continuing operations of $920.3 million for the year ended December 31, 2017. The Company recorded an after-tax benefit of $9.0 million during the year ended December 31, 2017 primarily related to re- measuring deferred tax assets and deferred tax liabilities as a result of the enactment of the TCJA. There was no such after-tax adjustment made to the year end December 31, 2018; however, the Company did benefit from a lower marginal tax rate. Incentive fees earned during the year ended December 31, 2017 totaled $27.5 million as a result of the return on assets under management from alternative investments exceeding certain benchmark returns over a 12-month period. Incentive fees earned during the year ended December 31, 2018 totaled $0.8 million due to the volatility and significant decline in the valuation of assets held by alternative investment funds sponsored by the Company during 2018. The following table sets forth the amount and percentage of the Company's revenue from each principal source for each of the following years ended December 31: Expressed in thousands) 2018 2017 2016 Amount Percentage Amount Percentage Amount Percentage Commissions $329,668 34%$336,620 37%$377,317 44% Advisory fees 314,349 33%320,746 35%269,119 31% Investment banking 115,353 12%78,215 8%81,011 10% Bank deposit sweep income 116,052 12%76,839 8%36,316 4% Interest 52,484 5%48,498 5%47,649 6% Principal transactions, net 14,461 2%23,273 3%20,481 2% Other 15,787 2%36,147 4%25,886 3% Total revenue $958,154 100%$920,338 100%$857,779 100% The Company derives most of its revenue from the operations of its principal subsidiaries, Oppenheimer and OAM. Although maintained as separate entities, the operations of the Company's brokerage subsidiaries both in the U.S. and other countries are closely related because Oppenheimer acts as clearing broker in transactions initiated by these subsidiaries. Table of Contents 51 The following table and discussion summarizes the changes in the major revenue and expense categories for the past two years: (Expressed in thousands) 2018 versus 2017 2017 versus 2016 Amount Change % Change Amount Change % Change Revenue Commissions $(6,952)(2.1)$(40,697)(10.8) Advisory fees (6,397)(2.0)51,627 19.2 Investment banking 37,138 47.5 (2,796)(3.5) Bank deposit sweep income 39,213 51.0 40,523 111.6 Interest 3,986 8.2 849 1.8 Principal transactions, net (8,812)(37.9)2,792 13.6 Other (20,360)(56.3)10,261 39.6 Total revenue 37,816 4.1 62,559 7.3 Expenses Compensation and related expenses 5,054 0.8 17,428 3.0 Communications and technology 2,501 3.5 1,588 2.3 Occupancy and equipment costs 7 —373 0.6 Clearing and exchange fees (560)(2.4)(1,581)(6.3) Interest 18,042 63.6 8,917 45.9 Other (12,345)(10.9)(5,794)(4.9) Total expenses 12,699 1.4 20,931 2.4 Income before income taxes from continuing operations 25,117 127.3 41,628 (190.2) Income taxes 18,111 (848.7)10,128 (82.6) Net income from continuing operations 7,006 32.0 31,500 * Discontinued operations Income from discontinued operations (2,071)(100.0)(15,268)(88.1) Income taxes (941)(100.0)(6,277)(87.0) Net income from discontinued operations (1,130)(100.0)(8,991)(88.8) Net income 5,876 25.5 22,509 4,584.3 Less net income attributable to non-controlling interest, net of tax (200)(108.7)(1,468)(88.9) Net income attributable to Oppenheimer Holdings Inc. $6,076 26.6 $23,977 * * Percentage not meaningful. Table of Contents 52 Fiscal 2018 compared to Fiscal 2017 Revenue Commission revenue was $329.7 million for the year ended December 31, 2018, a decrease of 2.1% compared with $336.6 million for the year ended December 31, 2017 due to lower retail and institutional fixed income commission revenue partially offset by higher institutional equities commission revenue during the 2018 year. Advisory fees were $314.3 million for the year ended December 31, 2018, an decrease of 2.0% compared with $320.7 million for the year ended December 31, 2017 due to higher management fee income partially offset by lower incentive fee income. Investment banking revenue was $115.4 million for the year ended December 31, 2018, an increase of 47.5% compared with $78.2 million for the year ended December 31, 2017 due to higher equity underwriting fees as well as higher merger and acquisition advisory fees during the 2018 year. Bank deposit sweep income was $116.1 million for the year ended December 31, 2018, an increase of 51.0% compared with $76.8 million for the year ended December 31, 2017 due to higher short-term interest rates during the 2018 year. Interest revenue was $52.5 million for the year ended December 31, 2018, an increase of 8.2% compared with $48.5 million in 2017 due primarily to an increase in interest revenue on margin extended to customers during the 2018 year. Principal transactions revenue was $14.5 million for the year ended December 31, 2018, a decrease of 37.9% compared with $23.3 million for the year ended December 31, 2017 primarily due to recognized losses resulting from participating in tender offers of ARS during the 2018 year. Other revenue was $15.8 million for the year ended December 31, 2018, a decrease of 56.3% compared to $36.1 million for the year ended December 31, 2017 primarily due to a decrease in the cash surrender value of Company-owned life insurance during the 2018 year and a favorable arbitration award during the 2018 year. Expenses Compensation and related expenses totaled $607.2 million during the year ended December 31, 2018, an increase of 0.8% compared with the year ended December 31, 2017. The increase was due to higher salaries, producer, and incentive compensation expenses partially offset by lower share-based and deferred compensation expenses during the year ended December 31, 2018. Compensation and related expenses as a percentage of revenue was 63.4% during the year ended December 31, 2018 compared with 65.4% during the year ended December 31, 2017. Non-compensation expenses were $306.1 million during the year ended December 31, 2018, an increase of 2.6% compared with $298.5 million during the year ended December 31, 2017 due primarily to higher interest costs, legal and regulatory costs, and communication and technology costs partially offset by lower external portfolio manager costs during the year ended December 31, 2018 and the charge of $6.4 million associated with the settlement with the Israeli VAT Authority in the first quarter of 2017. The effective income tax rate from continuing operations for the year ended December 31, 2018 was 35.6% compared with 10.8% (benefit) for the year ended December 31, 2017. The effective tax rate for the year ended December 31, 2018 benefited due to the Federal tax rate of 21% (versus 35% in prior years) as a result of the enactment of the TCJA in December 2017 offset by a detriment from the establishment of a valuation allowance for the deferred tax asset related to net operating losses of the Company's operations in Europe as well as larger non-deductible expenses related to items such as entertainment, fringe benefits, regulatory fines and penalties, and limitations around the deductibility of executive compensation under the TCJA. The effective income tax rate for the year ended December 31, 2017 was positively impacted by the estimated impact of the TCJA which resulted in a net discrete after-tax benefit of $9.0 million. Table of Contents 53 Fiscal 2017 compared to Fiscal 2016 Revenue Commission revenue was $336.6 million for the year ended December 31, 2017, a decrease of 10.8% compared with $377.3 million for the year ended December 31, 2016 due to reduced transaction volumes from retail and institutional investors as well as lower financial adviser headcount during the 2017 year. Advisory fees were $320.7 million for the year ended December 31, 2017, an increase of 19.2% compared with $269.1 million for the year ended December 31, 2016 due to increases in advisory fees on traditional managed products and incentive fees on alternative managed products. Investment banking revenue was $78.2 million for the year ended December 31, 2017, a decrease of 3.5% compared with $81.0 million for the year ended December 31, 2016 due to lower fees from mergers and acquisition activity and debt capital market transactions partially offset by higher fees from equities underwriting transactions during the 2017 year. Bank deposit sweep income was $76.8 million for the year ended December 31, 2017, an increase of 111.6% compared with $36.3 million for the year ended December 31, 2016 due to higher short-term interest rates during the 2017 year. Interest revenue was $48.5 million for the year ended December 31, 2017, an increase of 1.8% compared with $47.6 million in 2016. Principal transactions revenue was $23.3 million for the year ended December 31, 2017, an increase of 13.6% compared with $20.5 million for the year ended December 31, 2016 due primarily to increases in the valuation of firm investments during the 2017 year. Other revenue was $36.1 million for the year ended December 31, 2017, an increase of 39.6% compared to $25.9 million for the year ended December 31, 2016 due to positive changes in the cash surrender value of Company-owned life insurance and a favorable arbitration award during the during the 2017 year. Expenses Compensation and related expenses (including salaries, production and incentive compensation, share-based compensation, deferred compensation, and other benefit-related items) totaled $602.1 million during the year ended December 31, 2017, an increase of 3.0% compared with the year ended December 31, 2016. The increase was due to higher producer, incentive, share- based, and deferred compensation expenses partially offset by lower salary and healthcare expenses during the year ended December 31, 2017. Compensation and related expenses as a percentage of revenue was 65.4% during the year ended December 31, 2017 compared with 68.2% during the year ended December 31, 2016. Non-compensation expenses were $298.5 million during the year ended December 31, 2017, an increase of 1.2% compared with $295.0 million during the year ended December 31, 2016 due primarily to higher interest costs and the charge of $6.4 million associated with the settlement with the Israeli VAT Authority in the first quarter of 2017 partially offset by lower legal and regulatory costs during the year ended December 31, 2017. The effective income tax rate from continuing operations for the year ended December 31, 2017 was 10.8% (benefit) compared with 56.0% (benefit) for the year ended December 31, 2016. The effective income tax rate for the year ended December 31, 2017 was positively impacted by the estimated impact of the TCJA which resulted in a net discrete after-tax benefit of $9.0 million in the fourth quarter of 2017. The effective income tax rate for the year ended December 31, 2016 was positively impacted by income tax provision to tax return true-ups and higher nontaxable benefits received with respect to Company- owned life insurance partially offset by the valuation allowance established on deferred tax assets related to net operating losses of a foreign subsidiary. Table of Contents 54 The table below presents information about the reported revenue and income (loss) before income taxes from continuing operations of the Company's reportable business segments for the years ended December 31, 2018 and 2017: (Expressed in thousands) For the Year Ended December 31, 2018 2017 % Change Revenue Private Client $617,871 $592,753 4.2 Asset Management 71,696 89,896 (20.2) Capital Markets 272,719 231,632 17.7 Corporate/Other (4,132)6,057 (168.2) 958,154 920,338 4.1 Income (Loss) before income taxes Private Client 149,097 128,840 15.7 Asset Management 18,590 26,685 (30.3) Capital Markets (13,416)(39,978)(66.4) Corporate/Other (109,418)(95,811)14.2 $44,853 $19,736 127.3 Private Client Private Client reported revenue of $617.9 million for the year ended December 31, 2018, 4.2% higher than the year ended December 31, 2017 due to higher management fees, bank deposit sweep income and margin revenue partially offset by decreases in incentive fees, commissions and the cash surrender value of the Company-owned life insurance during the year ended December 31, 2018. Income before income taxes was $149.1 million for the year ended December 31, 2018, an increase of 15.7% compared with the year ended December 31, 2017 due to the foregoing partially offset by higher legal and regulatory costs during the year ended December 31, 2018. • Retail commissions were $196.7 million for the year ended December 31, 2018, a decrease of 3.2% from the year ended December 31, 2017. • Advisory fee revenue on traditional and alternative managed products was $243.5 million for the year ended December 31, 2018, an increase of 4.8% compared with the year ended December 31, 2017. The increase in advisory fees was due to the increase in management fees partially offset by a decrease in incentive fees earned from alternative investments. • Bank deposit sweep income was $116.1 million for the year ended December 31, 2018, an increase of 51.0% compared with $76.8 million for the year ended December 31, 2017 due to higher short-term interest rates during the year ended December 31, 2018. Asset Management Asset Management reported revenue of $71.7 million for the year ended December 31, 2018, 20.2% lower than the year ended December 31, 2017 due to lower incentive fees and a change in the method of reporting alternative investment management fees earned through an investment adviser that was adopted during the first quarter of 2018. The decrease for the year ended December 31, 2018 was partially offset by higher management fees from traditional products. Income before income taxes was $18.6 million for the year ended December 31, 2018, a decrease of 30.3% compared with the year ended December 31, 2017. • Advisory fee revenue on traditional and alternative managed products was $70.8 million for the year ended December 31, 2018, a decrease of 19.9% compared with the year ended December 31, 2017 primarily due to lower incentive fees and the change in the method of reporting management fees from alternative investments referred to above partially offset by higher management fees earned from traditional products during the year ended December 31, 2018. • AUM decreased 5.6% to $26.7 billion at December 31, 2018 compared with $28.3 billion at December 31, 2017, which is the basis for advisory fee billings for the first quarter of 2019. The decrease in AUM was comprised of asset depreciation of $2.2 billion and a positive net contribution of assets of $0.6 billion. Table of Contents 55 The following table provides a breakdown of the change in assets under management for the year ended December 31, 2018: (Expressed in millions) For the Year Ended December 31, 2018 Beginning Balance Appreciation (Depreciation) Ending Balance Fund Type Contributions Redemptions Traditional (1)$24,290 $4,738 $(4,107)$(2,026)$22,895 Institutional Fixed Income (2)695 47 (45)3 700 Alternative Investments: Hedge funds (3)2,590 350 (291)(233)2,416 Private Equity Funds (4)185 ——35 220 Portfolio Enhancement Program (5)521 6 (28)(1)498 $28,281 $5,141 $(4,471)$(2,222)$26,729 (1) Traditional investments include third party advisory programs, Oppenheimer financial adviser managed and advisory programs, and Oppenheimer Asset Management taxable and tax-exempt portfolio management strategies. (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. (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. Valuation is based on collateral requirements for a series of contracts representing the investment strategy. Capital Markets Capital Markets reported revenue of $272.7 million for the year ended December 31, 2018, 17.7% higher than the year ended December 31, 2017 due to higher fees from mergers and acquisitions activity and equities underwriting transactions partially offset by lower debt capital market transactions during the year ended December 31, 2018. Loss before income taxes was $13.4 million for the year ended December 31, 2018 compared with a loss before income taxes of $40.0 million for the year ended December 31, 2017. Results for this segment continue to be impacted by elevated compensation costs as the Company continues to re-position its business. • Institutional equities commissions increased 1.2% to $96.2 million for the year ended December 31, 2018 compared with the year ended December 31, 2017 due to higher client participation in the equities markets during the year ended December 31, 2018. • Advisory fees earned from investment banking activities increased 45.2% to $42.8 million for the year ended December 31, 2018 compared with the year ended December 31, 2017 due to an increase in mergers and acquisitions activity during the year ended December 31, 2018. • Equities underwriting fees increased 106.1% to $50.4 million for the year ended December 31, 2018 compared with the year ended December 31, 2017 due to increased capital raising activity during the year ended December 31, 2018. • Revenue from Global Fixed Income increased 1.2% to $74.5 million for the year ended December 31, 2018 compared with the year ended December 31, 2017 due to higher trading profits in government trading offset by lower institutional commissions and trading profits in municipal bonds during the year ended December 31, 2018. Table of Contents 56 Liquidity and Capital Resources At December 31, 2018, total assets decreased by 8.1% from December 31, 2017. 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. The Company finances its trading in government securities through the use of securities sold under agreements to repurchase ("repurchase agreements"). The Company has met its longer-term capital needs through the issuance of the 6.75% Senior Secured Notes due 2022 (the "Notes") (see "Refinancing" below). Oppenheimer has arrangements with banks for borrowings on a fully-collateralized basis. 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, and changes in stock loan balances and financing through repurchase agreements. At December 31, 2018, the Company had $15.0 million of such borrowings outstanding compared to outstanding borrowings of $118.3 million at December 31, 2017. 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 the Company's ability to utilize their capital for other purposes. The regulatory capital requirements for Oppenheimer Europe Ltd. and Oppenheimer Investments Asia Limited were $4.3 million and $383,000, respectively, at December 31, 2018. In December 2017, Oppenheimer Europe Ltd. received approval from the FCA for a variation of permission to remove the limitation of "matched principal business" from the firm's scope of permitted businesses and become a "Full-Scope Prudential Sourcebook for Investment Firms (IFPRU) €730K" firm, effective in January 2018. In December 2017, the Company contributed additional capital of $7.0 million to Oppenheimer Europe Ltd. in order to facilitate this new permissioning. See note 17 to the consolidated financial statements appearing in Item 8 for further details. 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. Treasuries and cash deposits in bank accounts. Any restrictions on transfer of these liquid assets from Oppenheimer Europe Ltd. and Oppenheimer Investments Asia Limited to the Company or its other subsidiaries would be limited by the regulatory capital requirements. The Company permanently reinvests eligible earnings of its foreign subsidiaries and, accordingly, does not accrue any U.S. income taxes that would arise if these earnings were repatriated. The unrecognized deferred tax liability associated with the outside basis difference of its foreign subsidiaries is estimated at $2.9 million for those subsidiaries. The Company has continued to reinvest permanently the excess earnings of Oppenheimer Israel (OPCO) Ltd. in its own business and in the businesses in Europe and Asia to support business initiatives in those regions. With the passage of the TCJA, the Company will continue to review its historical treatment of these earnings to determine whether its historical practice will continue or whether a change is warranted. In February 2010, Oppenheimer finalized settlements with the Regulators concluding investigations and administrative proceedings concerning Oppenheimer's marketing and sale of ARS. Pursuant to those settlements and legal settlements and awards, the Company has purchased and will, subject to the terms and conditions of the settlements, continue to purchase ARS on a periodic basis. See "Off-Balance Sheet Arrangements" herein. Additional fines, penalties and settlements of regulatory matters could have an adverse effect on the Company's liquidity depending on the size and composition of any such settlement. Refinancing On June 23, 2017, the Parent issued in a private offering $200.0 million aggregate principal amount of 6.75% Senior Secured Notes due 2022 (the "Unregistered Notes") under an indenture at an issue price of 100% of the principal amount. On September 19, 2017, the Parent completed an exchange offer in which the Parent exchanged 99.8% of its Unregistered Notes for a like principal amount of notes with identical terms except that such new notes have been registered under the Securities Act of 1933, as amended (the "Notes"). The Parent did not receive any proceeds in the exchange offer. The interest on the Notes is payable semi-annually on January 1st and July 1st, beginning January 1, 2018. The Parent used a portion of the net proceeds from the offering of the Unregistered Notes to redeem in full its 8.75% Senior Secured Notes due April 15, 2018 in the principal amount of $120.0 million, and pay all related fees and expenses related thereto. See note 11 to the consolidated financial statements appearing in Item 8 for further discussion. On December 13, 2018, Moody's Corporation affirmed the Company's 'B2' Corporate Family rating and 'B1' rating on the Notes and affirmed its stable outlook. On August 24, 2018, S&P affirmed the Company's 'B+' Corporate Family rating and 'B+' rating on the Notes and affirmed its stable outlook. Table of Contents 57 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. The Company's receivables are, for the most part, collateralized by marketable securities. The Company's collateral maintenance policies and procedures are designed to limit the Company's exposure to credit risk. Securities owned, with the exception of the ARS, are mainly comprised of actively trading, readily marketable securities. The Company advanced $18.5 million in forgivable notes (which are inherently illiquid) to employees for the year ended December 31, 2018 ($23.2 million for the year ended December 31, 2017) as upfront or backend inducements to continue employment. The amount of funds allocated to such inducements will vary with hiring activity. The Company satisfies its 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. The Company obtains short-term borrowings primarily through bank call loans. Bank call loans are generally payable on demand and bear interest at various rates. At December 31, 2018, bank call loans were $15.0 million ($118.3 million at December 31, 2017). The average daily bank loan outstanding for the year ended December 31, 2018 was $53.3 million ($123.9 million for the year ended December 31, 2017). The largest daily bank loan outstanding for the year ended December 31, 2018 was $516.5 million ($247.6 million for the year ended December 31, 2017). The average weighted interest rate on bank call loans applicable on December 31, 2018 was 3.43%. At December 31, 2018, securities loan balances totaled $146.8 million ($180.3 million at December 31, 2017). The average daily securities loan balance for the year ended December 31, 2018 was $209.8 million ($179.4 million for the year ended December 31, 2017). The largest daily stock loan balance for the year ended December 31, 2018 was $274.6 million ($279.5 million for the year ended December 31, 2017). The Company finances its 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. 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. Certain of the Company's repurchase agreements and reverse repurchase agreements are carried at fair value as a result of the Company's fair value option election. The Company elected the fair value option for those repurchase agreements and reverse repurchase agreements that do not settle overnight or have an open settlement date. The Company has elected the fair value option for these instruments to more accurately reflect market and economic events in its earnings and to mitigate a potential imbalance in earnings caused by using different measurement attributes (i.e. fair value versus carrying value) for certain assets and liabilities. At December 31, 2018, the Company did not have any repurchase agreements and reverse repurchase agreements that do not settle overnight or have an open settlement date. At December 31, 2018, the gross balances of reverse repurchase agreements and repurchase agreements were $82.4 million and $566.4 million, respectively. The average daily balance of reverse repurchase agreements and repurchase agreements on a gross basis for the year ended December 31, 2018 was $142.4 million and $729.0 million, respectively ($267.1 million and $708.5 million, respectively, for the year ended December 31, 2017). The largest amount of reverse repurchase agreements and repurchase agreements outstanding on a gross basis during the year ended December 31, 2018 was $394.8 million and $1.1 billion, respectively ($661.4 million and $1.0 billion, respectively, for the year ended December 31, 2017). During the year 2018, the Company obtained additional liquidity on its ARS owned of $66.1 million through ARS issuer redemptions and tender offers, net of additional client buybacks. At December 31, 2018, the gross leverage ratio was 4.1 Table of Contents 58 Liquidity Management The Company manages its need for liquidity on a daily basis to ensure compliance with regulatory requirements. The Company's liquidity needs may be affected by market conditions, increased inventory positions, business expansion and other unanticipated occurrences. In the event that existing financial resources do not satisfy the Company's needs, the Company may have to seek additional external financing. The availability of such additional external financing may depend on market factors outside the Company's control. The Company regularly reviews its sources of liquidity and financing and conducts internal stress analysis to determine the impact on the Company of events that could remove sources of liquidity or financing and to plan actions the Company could take in the case of such an eventuality. The Company's reviews have resulted in plans that the Company believes would result in a reduction of assets through liquidation that would significantly reduce the Company's need for external financing. Funding Risk (Expressed in thousands) For the Year Ended December 31, 2018 2017 Cash provided by (used in) operating activities $168,570 $(16,136) Cash used in investing activities (8,191)(3,867) Cash (used in) provided by financing activities (117,858)3,244 Net increase (decrease) in cash and cash equivalents $42,521 $(16,759) Management believes that funds from operations, combined with the Company's capital base and available credit facilities, are sufficient for the Company's liquidity needs in the foreseeable future. Changes in capital requirements under international standards that will impact the costs and relative returns on loans may cause banks including those with whom the Company relies to back away from providing funding to the securities industry. Such a development might impact the Company's ability to finance its day-to-day activities or increase the costs to acquire funding. The Company may or may not be able to pass such increased funding costs on to its clients. See "Factors Affecting 'Forward-Looking Statements'" herein. Other Matters On November 23, 2018, the Company paid a cash dividend of $0.11 per share of Class A and Class B Stock totaling approximately $1.5 million from available cash on hand. On February 28, 2019, the Company paid a cash dividend of $0.11 per share of Class A and Class B Stock totaling approximately $1.4 million from available cash on hand. The book value of the Company's Class A and Class B Stock was $41.81 at December 31, 2018 compared to $39.55 at December 31, 2017, based on total outstanding shares of 13,041,474 and 13,238,868, respectively. The diluted weighted average number of shares of Class A and Class B Stock outstanding for the year ended December 31, 2018 was 14,061,369 compared to 13,673,361 outstanding on December 31, 2017. Table of Contents 59 Off-Balance Sheet Arrangements In February 2010, Oppenheimer finalized settlements with the Regulators concluding investigations and administrative proceedings by the Regulators concerning Oppenheimer's marketing and sale of ARS. Pursuant to the settlements with the Regulators, Oppenheimer agreed to extend offers to repurchase ARS from certain of its clients subject to certain terms and conditions more fully described below. As of December 31, 2018, the Company had no outstanding ARS purchase commitments related to the settlements with the Regulators. In addition to the settlements with the Regulators, Oppenheimer has also reached settlements of and received adverse awards in legal proceedings with various clients where the Company is obligated to purchase ARS. Pursuant to completed Purchase Offers (as defined) under the settlements with the Regulators and client related legal settlements and awards to purchase ARS, as of December 31, 2018, the Company purchased and holds (net of redemptions) approximately $40.7 million in ARS from its clients. In addition, the Company is committed to purchase another $7.3 million in ARS from clients through 2020 under legal settlements and awards. The Company's purchases of ARS from its clients holding ARS eligible for repurchase will, subject to the terms and conditions of the settlements with the Regulators, continue on a periodic basis. Pursuant to these terms and conditions, the Company is required to conduct a financial review every six months, until the Company has extended Purchase Offers to all Eligible Investors (as defined), to determine whether it has funds available, after giving effect to the financial and regulatory capital constraints applicable to the Company, to extend additional Purchase Offers. The financial review is based on the Company's operating results, regulatory net capital, liquidity, and other ARS purchase commitments outstanding under legal settlements and awards (described below). There are no predetermined quantitative thresholds or formulas used for determining the final agreed upon amount for the Purchase Offers. Upon completion of the financial review, the Company first meets with its primary regulator, FINRA, and then with representatives of the NYAG and other regulators to present the results of the review and to finalize the amount of the next Purchase Offer. Various offer scenarios are discussed in terms of which Eligible Investors should receive a Purchase Offer. The primary criteria to date in terms of determining which Eligible Investors should receive a Purchase Offer has been the amount of household account equity each Eligible Investor had with the Company in February 2008. Once various Purchase Offer scenarios have been discussed, the regulators, not the Company, make the final determination of which Purchase Offer scenario to implement. The terms of the settlements provide that the amount of ARS to be purchased during any period shall not risk placing the Company in violation of regulatory requirements. Outside of the settlements with the Regulators, the Company has also reached various legal settlements with clients and received unfavorable legal awards requiring it to purchase ARS. The terms and conditions including the ARS amounts committed to be purchased under legal settlements are based on the specific facts and circumstances of each legal proceeding. In most instances, the purchase commitments are in increments and extend over a period of time. At December 31, 2018, no ARS purchase commitments related to legal settlements extended past 2020. To the extent the Company receives an unfavorable award, the Company usually must purchase the ARS provided for by the award within 30 days of the rendering of the award. The ARS positions that the Company owns and is committed to purchase primarily represent auction rate preferred securities issued by closed-end funds and, to a lesser extent, municipal auction rate securities which are municipal bonds wrapped by municipal bond insurance and student loan auction rate securities which are asset-backed securities backed by student loans. At December 31, 2018, the amount of ARS held by the Company that was below investment grade was $75,000 and the amount of ARS that was unrated was $nil. Table of Contents 60 (Expressed in thousands) Auction Rate Securities Owned and Committed to Purchase at December 31, 2018 Valuation Adjustment Product Principal Fair Value Auction Rate Securities ("ARS") Owned (1)$40,650 $2,698 $37,952 ARS Commitments to Purchase Pursuant to: (2)(3) Settlements with the Regulators (4)——— Legal Settlements and Awards (5)7,305 1,096 6,209 Total $47,955 $3,794 $44,161 (1) Principal amount represents the par value of the ARS and is included in securities owned on the consolidated balance sheet at December 31, 2018. The valuation adjustment amount is included as a reduction to securities owned on the consolidated balance sheet at December 31, 2018. (2) Principal amount represents the present value of the ARS par value that the Company is committed to purchase at a future date. This principal amount is presented as an off-balance sheet item. The valuation adjustment is included in accounts payable and other liabilities on the consolidated balance sheet at December 31, 2018. (3) Specific ARS to be purchased under ARS Purchase Commitments are unknown until the beneficial owner selects the individual ARS to be purchased. (4) Commitments to purchase under settlements with the Regulators at at December 31, 2018. Eligible Investors for future buybacks under the settlements with Regulators held approximately $7.5 million of ARS as of December 31, 2018. (5) Commitments to purchase under various legal settlements and awards with clients through 2020. Per the above table, the Company has recorded a valuation adjustment on its ARS owned and ARS purchase commitments of $3.8 million as of December 31, 2018. The valuation adjustment is comprised of $2.7 million which represents the difference between the principal value and the fair value of the ARS the Company owned as of December 31, 2018 and $1.1 million which represents the difference between the principal value and the fair value of the ARS the Company is committed to purchase under legal settlements and awards. As of December 31, 2018, the Company had no outstanding ARS purchase commitments related to the settlements with the Regulators. Eligible Investors for future buybacks under the settlements with the Regulators held approximately $7.5 million of ARS as of December 31, 2018. Since the Company was not committed to purchase this amount as of December 31, 2018, there were no valuation adjustments booked to recognize the difference between the principal value and the fair value for this remaining amount. Additional information concerning the Company's off-balance sheet arrangements is included in note 6 to the consolidated financial statements appearing in Item 8. Such information is hereby incorporated by reference. Also, see "Risk Factors — The Company may continue to be significantly affected by the failure of the Auction Rate Securities Market" in Item 1A as well as "Management's Discussion and Analysis of Financial Condition and Results of Operations — Business Environment — Other Regulatory Matters" in Item 7 for additional details. Table of Contents 61 Contractual Obligations The following table sets forth the Company's contractual obligations as of December 31, 2018: (Expressed in thousands) Less than 1 Year More than 5 Years Total 1-3 Years 3-5 Years Operating Lease Obligations (1)$280,609 $39,684 $69,709 $56,960 $114,256 Committed Capital (1)1,399 1,399 ——— Senior Secured Notes (2)(3)247,288 13,500 27,000 206,788 — ARS Purchase Commitments (1)7,305 —7,305 —— Total $536,601 $54,583 $104,014 $263,748 $114,256 (1) See note 16 to the consolidated financial statements appearing in Item 8 for additional information. (2) See note 11 to the consolidated financial statements appearing in Item 8 for additional information. (3) Includes interest payable of $47.3 million through maturity. Inflation Because the assets of the Company's brokerage subsidiaries are highly liquid, and because securities inventories are carried at current market values, the impact of inflation generally is reflected in the financial statements. However, the rate of inflation affects the Company's costs relating to employee compensation, rent, communications and certain other operating costs, and such costs may not be recoverable in the level of commissions or fees charged. To the extent inflation results in rising interest rates and has other adverse effects upon the securities markets, it may adversely affect the Company's financial position and results of operations. Table of Contents 62 Factors Affecting "Forward-Looking Statements" From time to time, the Company may publish "Forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act or make oral statements that constitute 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. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to remain within the terms of the safe harbor, 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. 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 and reduce returns, (v) fluctuations in currency rates, (vi) general economic conditions, both domestic and international (vii) changes in the rate of inflation and the related impact on the securities markets, (viii) competition from existing financial institutions, new entrants and other participants in the securities markets and financial services industry, (ix) legal developments affecting the litigation experience of the securities industry and the Company, including developments arising from the failure of the Auction Rate Securities markets, the trading of low-priced securities, stepped up enforcement efforts by the SEC, FinCEN, FINRA and other regulators and the results of pending litigation and regulatory proceedings involving the Company, (x) 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, (xi) the adoption and implementation of the SEC's proposed "Regulation Best Interest" and other regulations in recent years, (xii) the effectiveness of the Company's efforts to reduce costs and manage compensation expense, (xiii) war, international police actions, terrorist acts and nuclear confrontation as well as political unrest and regime changes, health epidemics and economic crises in foreign countries, (xiv) the Company's ability to achieve its business plan, (xv) corporate governance issues, (xvi) the consolidation of the banking and financial services industry, (xvii) the effects of the economy on the Company's ability to find and maintain financing options and liquidity, (xviii) credit, operational, legal and regulatory risks, (xix) risks related to foreign operations, including those in the United Kingdom which may be affected by Britain's June 23, 2016 referendum to exit the EU beginning in March 2019 ("Brexit"), (xx) risks related to the downgrade of U.S. long-term sovereign debt obligations and the sovereign debt of European nations, (xxi) potential cybersecurity threats, (xxii) the effect of technological innovation on the financial services industry and business, (xxiii) risks related to the changes by S&P Global Ratings ("S&P") or Moody's Investor Service, Inc. ("Moody's") of its rating on the Company and on the Company's long-term debt, (xxiv) risks related to elections results, Congressional gridlock, government shutdowns and investigations, changes in or uncertainty surrounding regulations and threats of default by the federal government, (xxv) risks relate to trade wars, and (xxvi) risks related to changes in capital requirements under international standards that may cause banks to back away from providing funding to the securities industry. There can be no assurance that the Company has correctly or completely identified and assessed all of the factors affecting the Company's business. The Company does not undertake any obligation to publicly update or revise any forward-looking statements. See "Risk Factors" in Item 1A. Table of Contents 63 Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Risk Management The Company's principal business activities by their nature involve significant market, credit and other risks. The Company's effectiveness in managing these risks is critical to its success and stability. 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. The Company also makes markets in municipal bonds, mortgage-backed securities, government bonds and high yield bonds and short term fixed income securities and loans issued by various corporations. Market Risk. Market risk generally means the risk of loss that may result from the potential change in the value of a financial instrument as a result of fluctuations in interest and currency exchange rates and in equity and commodity prices. Market risk is inherent in all types of financial instruments, including both derivatives and non-derivatives. The Company's exposure to market risk arises from its role as a financial intermediary for its customers' transactions and from its proprietary trading and arbitrage activities. Oppenheimer monitors market risks through daily profit and loss statements and position reports. Each trading department adheres to internal position limits determined by senior management 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. As a result of this, Oppenheimer has risk containment policies in place, which limit position size and monitor transactions on a minute-to- minute basis. Credit Risk. Credit risk represents the loss that the Company would incur if a client, counterparty or issuer of securities or other instruments held by the Company fails to perform its contractual obligations. The Company follows industry practice to reduce credit risk related to various investing and financing activities by obtaining and maintaining collateral wherever possible. The Company adjusts margin requirements if it believes the risk exposure is not appropriate based on market conditions. When Oppenheimer advances funds or securities to a counterparty in a principal transaction or to a customer in a brokered transaction, it is subject to the risk that the counterparty or customer will not repay such advances. If the market price of the securities purchased or loaned has declined or increased, respectively, Oppenheimer may be unable to recover some or all of the value of the amount advanced. A similar risk is also present where a customer is unable to respond to a margin call and the market price of the collateral has dropped. In addition, Oppenheimer's securities positions are subject to fluctuations in market value and liquidity. In addition to monitoring the credit-worthiness of its customers, Oppenheimer imposes more conservative margin requirements than those of the FINRA Rule 4210. Generally, Oppenheimer limits customer loans to an amount not greater than 65% of the value of the securities (or lower if the securities in the account are concentrated in a limited number of issues). Particular attention and more restrictive requirements are placed on more highly volatile securities traded in the NASDAQ market. In comparison, the FINRA Rule 4210 permits loans of up to 75% of the value of the equity securities in a customer's account. Further discussion of credit risk appears in note 7 to the Company's consolidated financial statements appearing in Item 8. Operational Risk. Operational risk generally refers to the risk of loss resulting from the Company's operations, including, but not limited to, improper or unauthorized execution and processing of transactions, deficiencies in its operating systems, business disruptions and inadequacies or breaches in its internal control processes. The Company operates in diverse markets and it is reliant on the ability of its employees and systems to process high numbers of transactions often within short time frames. In the event of a breakdown or improper operation of systems, human error or improper action by employees, the Company could suffer financial loss, regulatory sanctions or damage to its reputation. In order to mitigate and control operational risk, the Company has developed and continues to enhance policies and procedures (including the maintenance of disaster recovery facilities and procedures related thereto) that are designed to identify and manage operational risk at appropriate levels. With respect to its trading activities, the Company has procedures designed to ensure that all transactions are accurately recorded and properly reflected on the Company's books on a timely basis. With respect to client activities, the Table of Contents 64 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. 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. 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 few years and the Company, as well as others in the industry, has been directly affected by this increased regulatory scrutiny. Timely and accurate compliance with the increased volume of regulatory requests has become increasingly problematic within the industry, and regulators have tended to bring enforcement proceedings in relation to such matters. See further discussion of these risks in "Management's Discussion and Analysis of Financial Condition and Results of Operations — Regulatory and Legal Environment" in Item 7. The Company has comprehensive procedures for addressing issues such as regulatory capital requirements, sales and trading practices, use of and safekeeping of customer funds and securities, granting of credit, collection activities, money laundering, and record keeping. The Company has designated Anti-Money Laundering Compliance Officers who monitor compliance with regulations under the U.S. Patriot Act. See further discussion of the Company's reserve policy in "Management's Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies" in Item 7, "Legal Proceedings" in Item 3 and "Business — Regulation" in Item 1. Off-Balance Sheet Arrangements. In certain limited instances, the Company utilizes off-balance sheet arrangements to manage risk. See further discussion in note 6 to the consolidated financial statements appearing in Item 8. Value-at-Risk. Value-at-risk is a statistical measure of the potential loss in the fair value of a portfolio due to adverse movements in underlying risk factors. In response to the SEC's market risk disclosure requirements, the Company has performed a value-at-risk analysis of its trading of financial instruments and derivatives. 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. The forecasts of variances and co-variances used to construct the model for the market factors relevant to the portfolio were generated from historical data. Although value-at-risk models are sophisticated tools, their use can be limited as historical data is not always an accurate predictor of future conditions. The Company attempts to manage its market exposure using other methods, including trading authorization limits and concentration limits. At December 31, 2018 and 2017, the Company's value-at-risk for each component of market risk was as follows: (Expressed in thousands) VAR for Fiscal 2018 VAR for Fiscal 2017 High Low Average High Low Average Equity price risk $507 $42 $181 $554 $152 $410 Interest rate risk 5,050 617 2,011 1,628 1,112 1,353 Commodity price risk 94 78 86 90 62 75 Diversification benefit (4,808)(443)(1,783)(951)(1,234)(1,103) Total $843 $294 $495 $1,321 $92 $735 (Expressed in thousands) VAR at December 31, 2018 2017 Equity price risk $54 $554 Interest rate risk 5,050 1,112 Commodity price risk 85 62 Diversification benefit (4,808)(1,226) Total $381 $502 Table of Contents 65 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. The changes in the value-at-risk amounts reported in 2018 from those reported in 2017 reflect changes in the size and composition of the Company's trading portfolio at December 31, 2018 compared to December 31, 2017. The Company's portfolio as of December 31, 2018 includes approximately $15.1 million ($16.2 million in 2017) in corporate equities, which are related to deferred compensation liabilities and which do not bear any value-at-risk to the Company. Further discussion of risk management appears in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Item 1A, "Risk Factors." The value-at-risk estimate has limitations that should be considered in evaluating the Company's potential future losses based on the year-end portfolio positions. Recent market conditions, including increased volatility, may result in statistical relationships that result in higher value-at-risk than would be estimated from the same portfolio under different market conditions. Likewise, the converse may be true. Critical risk management strategy involves the active management of portfolio levels to reduce market risk. The Company's market risk exposure is continuously monitored as the portfolio risks and market conditions change. Table of Contents 66 Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Management's Report on Internal Control over Financial Reporting Report of Independent Registered Public Accounting Firm Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2018 and 2017 Consolidated Statements of Operations for the three years ended December 31, 2018, 2017 and 2016 Consolidated Statements of Comprehensive Income (Loss) for the three years ended December 31, 2018, 2017 and 2016 Consolidated Statements of Changes in Stockholders’ Equity for the three years ended December 31, 2018, 2017 and 2016 Consolidated Statements of Cash Flows for the three years ended December 31, 2018, 2017 and 2016 Notes to Consolidated Financial Statements 67 68 69 70 71 72 73 74 76 Table of Contents 67 MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management of Oppenheimer Holdings Inc. is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal control over financial reporting is a process designed under the supervision of the Company's principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company's financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles. As of December 31, 2018, management conducted an assessment of the effectiveness of the Company's internal control over financial reporting based on the framework established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013. Based on this assessment, management has concluded that the Company's internal control over financial reporting as of December 31, 2018 was effective. The Company's internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets and provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the Company's financial statements. The Company's internal control over financial reporting as of December 31, 2018 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report included herein, which expresses an unqualified opinion on the effectiveness of the Company's internal control over financial reporting as of December 31, 2018. Table of Contents 68 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Oppenheimer Holdings Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Oppenheimer Holdings Inc. and subsidiaries (the "Company") as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2018 of the Company and our report dated March 1, 2019, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP New York, NY March 1, 2019 Table of Contents 69 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of Oppenheimer Holdings Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Oppenheimer Holdings Inc. and subsidiaries (the "Company") as of December 31, 2018 and 2017, the related consolidated statements of operations, comprehensive income, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2018, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 1, 2019, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Deloitte & Touche LLP New York, NY March 1, 2019 We have served as the Company's auditor since 2013. Table of Contents 70 OPPENHEIMER HOLDINGS INC. CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, (Expressed in thousands, except number of shares and per share amounts)2018 2017 ASSETS Cash and cash equivalents $90,675 $48,154 Deposits with clearing organizations 67,678 42,222 Receivable from brokers, dealers and clearing organizations 166,493 187,115 Receivable from customers, net of allowance for credit losses of $886 ($769 in 2017)720,777 848,226 Income tax receivable 1,014 2,939 Securities purchased under agreements to resell 290 658 Securities owned, including amounts pledged of $517,951 ($655,683 in 2017), at fair value 837,584 926,597 Notes receivable, net of accumulated amortization and allowance for uncollectibles of $25,109 and $6,800, respectively ($24,705 and $7,975, respectively, in 2017)44,058 40,520 Furniture, equipment and leasehold improvements, net of accumulated depreciation of $89,182 ($82,826 in 2017)28,988 27,187 Intangible assets 32,100 31,700 Goodwill 137,889 137,889 Other assets 112,768 145,310 Total assets $2,240,314 $2,438,517 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Drafts payable $16,348 $42,412 Bank call loans 15,000 118,300 Payable to brokers, dealers and clearing organizations 289,207 211,483 Payable to customers 336,616 385,907 Securities sold under agreements to repurchase 484,218 586,478 Securities sold but not yet purchased, at fair value 85,446 94,486 Accrued compensation 167,348 173,116 Accounts payable and other liabilities 87,630 92,495 Senior secured notes, net of debt issuance costs of $904 ($1,163 in 2017)199,096 198,837 Deferred tax liabilities, net of deferred tax assets of $41,722 ($46,247 in 2017)14,083 11,092 Total liabilities 1,694,992 1,914,606 Commitments and contingencies (note 16) Stockholders' equity Share capital Class A non-voting common stock, par value $0.001 per share, 50,000,000 shares authorized, 12,941,809 and 13,139,203 shares issued and outstanding as of December 31, 2018 and 2017, respectively 53,259 58,359 Class B voting common stock, par value $0.001 per share, 99,665 shares authorized, issued and outstanding 133 133 53,392 58,492 Contributed capital 41,776 36,546 Retained earnings 449,989 426,930 Accumulated other comprehensive income 165 1,582 Total Oppenheimer Holdings Inc. stockholders' equity 545,322 523,550 Non-controlling interest —361 Total stockholders' equity 545,322 523,911 Total liabilities and stockholders' equity $2,240,314 $2,438,517 The accompanying notes are an integral part of these consolidated financial statements. Table of Contents 71 OPPENHEIMER HOLDINGS INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE YEARS ENDED DECEMBER 31, (Expressed in thousands, except number of shares and per share amounts)2018 2017 2016 REVENUE Commissions $329,668 $336,620 $377,317 Advisory fees 314,349 320,746 269,119 Investment banking 115,353 78,215 81,011 Bank deposit sweep income 116,052 76,839 36,316 Interest 52,484 48,498 47,649 Principal transactions, net 14,461 23,273 20,481 Other 15,787 36,147 25,886 Total revenue 958,154 920,338 857,779 EXPENSES Compensation and related expenses 607,192 602,138 584,710 Communications and technology 74,479 71,978 70,390 Occupancy and equipment costs 61,171 61,164 60,791 Clearing and exchange fees 22,985 23,545 25,126 Interest 46,396 28,354 19,437 Other 101,078 113,423 119,217 Total expenses 913,301 900,602 879,671 Income (Loss) before income taxes from continuing operations 44,853 19,736 (21,892) Income taxes expenses (benefits)15,977 (2,134)(12,262) Net income (loss) from continuing operations 28,876 21,870 (9,630) Discontinued operations Income from discontinued operations —2,071 17,339 Income taxes expenses (benefits)—941 7,218 Net income from discontinued operations —1,130 10,121 Net income 28,876 23,000 491 Less net income (loss) attributable to non-controlling interest, net of tax (16)184 1,652 Net income (loss) attributable to Oppenheimer Holdings Inc.$28,892 $22,816 $(1,161) Basic net income (loss) per share attributable to Oppenheimer Holdings Inc. Continuing operations $2.18 $1.65 $(0.72) Discontinued operations —0.07 0.63 Net income (loss) per share $2.18 $1.72 $(0.09) Diluted net income (loss) per share attributable to Oppenheimer Holdings Inc. Continuing operations $2.05 $1.60 $(0.72) Discontinued operations —0.07 0.63 Net income (loss) per share $2.05 $1.67 $(0.09) Dividends declared per share $0.44 $0.44 $0.44 Weighted average shares Basic 13,248,876 13,246,423 13,368,768 Diluted 14,061,369 13,673,361 13,368,768 The accompanying notes are an integral part of these consolidated financial statements. Table of Contents 72 OPPENHEIMER HOLDINGS INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) FOR THE THREE YEARS ENDED DECEMBER 31, (Expressed in thousands)2018 2017 2016 Net income $28,876 $23,000 $491 Other comprehensive income (loss), net of tax Currency translation adjustment (1,417)2,263 220 Comprehensive income 27,459 25,263 711 Net income (loss) attributable to non-controlling interest, net of tax (16)184 1,652 Comprehensive income (loss) attributable to Oppenheimer Holdings Inc.$27,475 $25,079 $(941) The accompanying notes are an integral part of these consolidated financial statements. Table of Contents 73 OPPENHEIMER HOLDINGS INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE THREE YEARS ENDED DECEMBER 31, (Expressed in thousands)2018 2017 2016 Share capital Balance at beginning of year $58,492 $59,361 $57,520 Issuance of Class A non-voting common stock 794 6,595 5,776 Repurchase of Class A non-voting common stock for cancellation (5,894)(7,464)(3,935) Balance at end of year 53,392 58,492 59,361 Contributed capital Balance at beginning of year 36,546 41,765 44,438 Tax deficiency from share-based awards ——(740) Share-based expense 6,061 5,583 5,184 Vested employee share plan awards (831)(11,227)(7,117) Cumulative-effect adjustment from adoption of new accounting update of employee share-based accounting —425 — Balance at end of year 41,776 36,546 41,765 Retained earnings Balance at beginning of year 426,930 410,258 417,001 Net income (loss) attributable to Oppenheimer Holdings Inc.28,892 22,816 (1,161) Dividends paid ($0.44 per share)(5,833)(5,836)(5,887) Dividends received from non-controlling interest —6 305 Cumulative-effect adjustment from adoption of new accounting update of employee share-based accounting —(314)— Balance at end of year 449,989 426,930 410,258 Accumulated other comprehensive income (loss) Balance at beginning of year 1,582 (681)(901) Currency translation adjustment (1,417)2,263 220 Balance at end of year 165 1,582 (681) Total Oppenheimer Holdings Inc. stockholders' equity 545,322 523,550 510,703 Non-controlling interest Balance at beginning of year 361 2,631 7,024 Net income attributable to non-controlling interest, net of tax (16)184 1,652 Dividends paid to non-controlling interest (345)(2,448)(5,740) Dividends paid to parent —(6)(305) Balance at end of year —361 2,631 Total stockholders' equity $545,322 $523,911 $513,334 The accompanying notes are an integral part of these consolidated financial statements. Table of Contents 74 OPPENHEIMER HOLDINGS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE YEARS ENDED DECEMBER 31, (Expressed in thousands)2018 2017 2016 Cash flows from operating activities Net income $28,876 $23,000 $491 Adjustments to reconcile net income to net cash used in operating activities Non-cash items included in net income: Depreciation and amortization of furniture, equipment and leasehold improvements 6,871 5,657 6,788 Deferred income taxes 2,773 (2,045)(2,941) Amortization of notes receivable 12,540 11,791 12,960 Amortization of debt issuance costs 259 353 484 Write-off of debt issuance costs —430 — Amortization of mortgage servicing rights ——1,286 Provision for (reversal of) credit losses 117 (25)(1,751) Share-based compensation 6,710 12,573 6,203 Tax deficiency from share-based awards ——(740) Gain on sale of assets ——(16,475) Decrease (increase) in operating assets: Deposits with clearing organizations (25,456)(4,037)11,305 Receivable from brokers, dealers and clearing organizations 20,622 27,819 145,882 Receivable from customers 127,332 (815)(5,280) Income tax receivable 1,925 2,877 5,104 Securities purchased under agreements to resell 368 23,348 182,493 Securities owned 89,013 (219,489)24,725 Notes receivable (16,078)(22,212)(10,210) Loans held for sale ——60,234 Mortgage servicing rights ——(1,300) Other assets 30,272 (37,130)2,368 Increase (decrease) in operating liabilities: Drafts payable (26,064)3,184 (8,783) Payable to brokers, dealers and clearing organizations 77,724 (9,906)56,843 Payable to customers (49,291)(64,039)(144,887) Securities sold under agreements to repurchase (102,260)208,394 (273,361) Securities sold but not yet purchased (9,040)9,436 (41,443) Accrued compensation (6,418)21,184 (6,864) Accounts payable and other liabilities (2,225)(6,484)(69,996) Cash provided by (used in) operating activities 168,570 (16,136)(66,865) Cash flows from investing activities Purchase of furniture, equipment and leasehold improvements (8,672)(5,611)(5,731) Purchase of intangible assets (400)—— Proceeds from sale of assets ——45,448 Proceeds from the settlement of Company-owned life insurance 881 1,744 — Cash (used in) provided by investing activities (8,191)(3,867)39,717 Table of Contents 75 (Expressed in thousands)2018 2017 2016 Cash flows from financing activities Cash dividends paid on Class A non-voting and Class B voting common stock (5,833)(5,836)(5,887) Cash dividends paid to non-controlling interest (372)(2,448)(5,740) Issuance of Class A non-voting common stock 70 26 — Repurchase of Class A non-voting common stock for cancellation (5,894)(7,464)(3,935) Payments for employee taxes withheld related to vested share-based awards (2,529)(2,237)(1,341) Issuance of senior secured notes —200,000 — Redemption of senior secured notes —(150,000)— Debt issuance costs —(1,297)— (Decrease) increase in bank call loans, net (103,300)(27,500)45,600 Cash (used in) provided by financing activities (117,858)3,244 28,697 Net increase (decrease) in cash and cash equivalents 42,521 (16,759)1,549 Cash and cash equivalents, beginning of year 48,154 64,913 63,364 Cash and cash equivalents, end of year $90,675 $48,154 $64,913 Schedule of non-cash financing activities Employee share plan issuance $724 $6,569 $5,776 Supplemental disclosure of cash flow information Cash paid during the year for interest $53,559 $23,899 $19,705 Cash paid (received) during the year for income taxes, net $11,520 $(2,378)$(5,009) The accompanying notes are an integral part of these consolidated financial statements. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 76 1. Organization Oppenheimer Holdings Inc. ("OPY" or the "Parent") is incorporated under the laws of the State of Delaware. The consolidated financial statements include the accounts of OPY and its consolidated subsidiaries (together, the "Company"). The Company engages in a broad range of activities in the financial services industry, including retail securities brokerage, institutional sales and trading, market-making, research, investment banking (both corporate and public finance), investment advisory and asset management services and trust services. The Company has 92 retail branch offices in the United States and has institutional businesses located in London, Tel Aviv, and Hong Kong. The principal subsidiaries of OPY are Oppenheimer & Co. Inc. ("Oppenheimer"), a registered broker-dealer in securities and investment adviser under the Investment Advisers Act of 1940; Oppenheimer Asset Management Inc. ("OAM") and its wholly-owned subsidiary, Oppenheimer Investment Management LLC, both registered investment advisers under the Investment Advisers Act of 1940; Oppenheimer Trust Company of Delaware ("Oppenheimer Trust"), a limited purpose trust company that provides fiduciary services such as trust and estate administration and investment management; OPY Credit Corp., which offers syndication as well as trading of issued corporate loans; Oppenheimer Europe Ltd., based in the United Kingdom, with offices in the Isle of Jersey, Germany and Switzerland, which provides institutional equities and fixed income brokerage and corporate finance and is regulated by the Financial Conduct Authority; Oppenheimer Investments Asia Limited, based in Hong Kong, China, which provides fixed income and equities brokerage services to institutional investors and is regulated by the Securities and Futures Commission; and Oppenheimer Multifamily Housing & Healthcare Finance, Inc. ("OMHHF") which was formerly engaged in Federal Housing Administration ("FHA")-insured commercial mortgage origination and servicing. During 2016, the Company sold substantially all of the assets of OMHHF and ceased its operations. Oppenheimer owns Freedom Investments, Inc. ("Freedom"), a registered broker dealer in securities, which provides discount brokerage services, and Oppenheimer Israel (OPCO) Ltd., which is engaged in offering investment services in the State of Israel. Oppenheimer holds a trading permit on the New York Stock Exchange and is a member of several other regional exchanges in the United States. 2. Summary of significant accounting policies and estimates Basis of Presentation The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. Intercompany transactions and balances have been eliminated in the preparation of the consolidated financial statements. Use of Estimates The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. In presenting the consolidated financial statements, management makes estimates regarding valuations of financial instruments, loans and allowances for credit losses, the outcome of legal and regulatory matters, goodwill and other intangible assets, share- based compensation plans and income taxes. Estimates, by their nature, are based on judgment and available information. Therefore, actual results could be materially different from these estimates. A discussion of certain critical accounting policies in which estimates are a significant component of the amounts reported on the consolidated financial statements follows. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 77 Financial Instruments and Fair Value Financial Instruments Securities owned, securities sold but not yet purchased, investments and derivative contracts are carried at fair value with changes in fair value recognized in earnings each period. Fair Value Measurements Accounting guidance for the fair value measurement of financial assets, which defines fair value, establishes a framework for measuring fair value, establishes a fair value measurement hierarchy, and expands fair value measurement disclosures. Fair value, as defined by the accounting guidance, is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy established by this accounting guidance prioritizes the inputs used in valuation techniques into the following three categories (highest to lowest priority): Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets; Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly; and Level 3: Unobservable inputs that are significant to the overall fair value measurement. The Company's financial instruments that are recorded at fair value generally are classified within Level 1 or Level 2 within the fair value hierarchy using quoted market prices or quotes from market makers or broker-dealers. Financial instruments classified within Level 1 are valued based on quoted market prices in active markets and consist of U.S. Treasury and Agency securities, corporate equities, and certain money market instruments. Level 2 financial instruments primarily consist of investment grade and high-yield corporate debt, convertible bonds, mortgage and asset-backed securities, and municipal obligations. Financial instruments classified as Level 2 are valued based on quoted prices for similar assets and liabilities in active markets and quoted prices for identical or similar assets and liabilities in markets that are not active. Some financial instruments are classified within Level 3 within the fair value hierarchy as observable pricing inputs are not available due to limited market activity for the asset or liability. Such financial instruments include certain distressed municipal securities, auction rate securities ("ARS") and investments in hedge funds and private equity funds where the Company, through its subsidiaries, is general partner. Fair Value Option The Company has the option to measure certain financial assets and financial liabilities at fair value with changes in fair value recognized in earnings each period. The Company may make a fair value option election on an instrument-by-instrument basis at initial recognition of an asset or liability or upon an event that gives rise to a new basis of accounting for that instrument. Consolidation The Company consolidates all subsidiaries in which it has a controlling financial interest, as well as any variable interest entities ("VIEs") where the Company is deemed to be the primary beneficiary, when it has the power to make the decisions that most significantly affect the economic performance of the VIE and has the obligation to absorb significant losses or the right to receive benefits that could potentially be significant to the VIE. The Company reviews factors, including the rights of the equity holders at risk and obligations of equity holders to absorb losses or receive expected residual returns, to determine if the entity is a VIE. In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly or indirectly by the Company. Under Accounting Standards Update ("ASU") 2015-02, a general partner will not consolidate a partnership or similar entity under the voting interest model. See note 8 for further details. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 78 Financing Receivables The Company's financing receivables include customer margin loans, securities purchased under agreements to resell ("reverse repurchase agreements"), and securities borrowed transactions. The Company uses financing receivables to extend margin loans to customers, meet trade settlement requirements, and facilitate its matched-book arrangements and inventory requirements. The Company's financing receivables are secured by collateral received from clients and counterparties. In many cases, the Company is permitted to sell or re-pledge securities held as collateral. These securities may be used to collateralize repurchase agreements, to enter into securities lending agreements, to cover short positions or fulfill the obligation of securities fails to deliver. The Company monitors the market value of the collateral received on a daily basis and may require clients and counterparties to deposit additional collateral or return collateral pledged, when appropriate. Customer receivables, primarily consisting of customer margin loans collateralized by customer-owned securities, are stated net of allowance for credit losses. The Company reviews large customer accounts that do not comply with the Company's margin requirements on a case-by-case basis to determine the likelihood of collection and records an allowance for credit loss following that process. For small customer accounts that do not comply with the Company's margin requirements, the allowance for credit loss is generally recorded as the amount of unsecured or partially secured receivables. The Company also makes loans to financial advisers as part of its hiring process. These loans are recorded as notes receivable on its consolidated balance sheet. Allowances are established on these loans if the financial adviser is no longer associated with the Company and the loan has not been promptly repaid. Legal and Regulatory Reserves The Company records reserves related to legal and regulatory proceedings in accounts payable and other liabilities. The determination of the amounts of these reserves requires significant judgment on the part of management. In accordance with applicable accounting guidance, the Company establishes reserves for litigation and regulatory matters where available information indicates that it is probable a liability had been incurred and the Company can reasonably estimate the amount of that loss. When loss contingencies are not probable or cannot be reasonably estimated, the Company does not establish reserves. When determining whether to record a reserve, management considers many factors including, but not limited to, the amount of the claim; the stage and forum of the proceeding, the sophistication of the claimant, the amount of the loss, if any, in the client's account and the possibility of wrongdoing, if any, on the part of an employee of the Company; the basis and validity of the claim; previous results in similar cases; and applicable legal precedents and case law. Each legal and regulatory proceeding is reviewed with counsel in each accounting period and the reserve is adjusted as deemed appropriate by management. Any change in the reserve amount is recorded in the results of that period. The assumptions of management in determining 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. Goodwill The Company defines a reporting unit as an operating segment. The Company's goodwill resides in its Private Client Division ("PCD") reporting unit. Goodwill of a reporting unit is subject to at least an annual test for impairment to determine if the estimated fair value of a reporting unit is less than its carrying amount. Goodwill of a reporting unit is required to be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Due to the volatility in the financial services sector and equity markets in general, determining whether an impairment of goodwill has occurred is increasingly difficult and requires management to exercise significant judgment. The Company's annual goodwill impairment analysis performed as of December 31, 2018 applied the same valuation methodologies with consistent inputs as that performed as of December 31, 2017, as follows: Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 79 In estimating the fair value of the PCD reporting unit, the Company uses traditional standard valuation methods, including the market comparable approach and income approach. The market comparable approach is based on comparisons of the subject company to public companies whose stocks are actively traded ("Price Multiples") or to similar companies engaged in an actual merger or acquisition ("Precedent Transactions"). As part of this process, multiples of value relative to financial variables, such as earnings or stockholders' equity, are developed and applied to the appropriate financial variables of the subject company to indicate its value. The income approach involves estimating the present value of the subject company's future cash flows by using projections of the cash flows that the business is expected to generate, and discounting these cash flows at a given rate of return ("Discounted Cash Flow" or "DCF"). Each of these standard valuation methodologies requires the use of management estimates and assumptions. In its Price Multiples valuation analysis, the Company uses various operating metrics of comparable companies, including revenues, after-tax earnings, and EBITDA as well as price-to-book value ratios at a point in time. The Company analyzes prices paid in Precedent Transactions that are comparable to the business conducted in the PCD. The DCF analysis includes the Company's assumptions regarding discount rate, growth rates of the PCD's revenues, expenses, EBITDA, and capital expenditures, adjusted for current economic conditions and expectations. The Company weighs each of the three valuation methods equally in its overall valuation. Given the subjectivity involved in selecting which valuation method to use, the corresponding weightings, and the input variables for use in the analyses, it is possible that a different valuation model and the selection of different input variables could produce a materially different estimate of the fair value of the PCD reporting unit. Intangible Assets Indefinite intangible assets are comprised of trademarks, trade names and an Internet domain name. These intangible assets carried at $32.1 million, which are not amortized, are subject to at least an annual test for impairment to determine if the estimated fair value is less than their carrying amount. The fair value of the trademarks and trade names was substantially in excess of its carrying value as of December 31, 2018. Share-Based Compensation Plans As part of the compensation to employees and directors, the Company uses stock-based compensation, consisting of restricted stock, stock options and stock appreciation rights. In accordance with ASC Topic 718, "Compensation - Stock Compensation," the Company classifies the stock options and restricted stock awards as equity awards, which requires the compensation cost to be recognized in the consolidated statement of operations over the requisite service period of the award at grant date fair value and adjust for actual forfeitures. The fair value of restricted stock awards is determined based on the grant date closing price of the Company's Class A non-voting common stock ("Class A Stock") adjusted for the present value of the dividend to be received upon vesting. The fair value of stock options is determined using the Black-Scholes model. Key assumptions used to estimate the fair value include the expected term and the expected volatility of the Company's Class A Stock over the term of the award, the risk-free interest rate over the expected term, and the Company's expected annual dividend yield. The Company classifies stock appreciation rights ("OARs") as liability awards, which requires the fair value to be remeasured at each reporting period until the award vests. The fair value of OARs is also determined using the Black-Scholes model at the end of each reporting period. The compensation cost is adjusted each reporting period for changes in fair value prorated for the portion of the requisite service period rendered. Revenue Recognition Brokerage Customers' securities and commodities transactions are reported on a settlement date basis, which is generally two business days after trade date for securities transactions and one day for commodities transactions. Related commission income and expense is recorded on a trade date basis. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 80 Principal Transactions Transactions in proprietary securities and related revenue and expenses are recorded on a trade date basis. Securities owned and securities sold but not yet purchased are reported at fair value generally based upon quoted prices. Realized and unrealized changes in fair value are recognized in principal transactions, net in the period in which the change occurs. Investment Banking Fees Advisory fees from mergers, acquisitions and restructuring transactions are recorded when services for the transactions are completed and income is reasonably determinable, generally as set forth under the terms of the engagement. Retainer fees and engagement fees are recognized ratably over the service period. Underwriting fees are recorded when the transactions are completed. Transaction-related expenses, primarily consisting of legal, travel and other costs directly associated with the transaction, are deferred and recognized in the same period as the related investment banking transaction revenue. Underwriting revenues and the related expenses are presented gross on the consolidated statement of operations. Interest Interest revenue represents interest earned on margin debit balances, securities borrowed transactions, reverse repurchase agreements, fixed income securities, firm investments, and cash and cash equivalents. Interest revenue is recognized in the period earned based upon average or daily asset balances, contractual cash flows, and interest rates. Asset Management Asset management fees are generally recognized over the period the related service is provided based on the account value at the valuation date per the respective asset management agreements. In certain circumstances, OAM is entitled to receive performance (or incentive) fees when the return on assets under management ("AUM") exceeds certain benchmark returns or other performance targets. Performance fees are generally based on investment performance over a 12-month period and are not subject to adjustment once the measurement period ends. Such fees are computed as of the fund's year-end when the measurement period ends and generally are recorded as earned in the fourth quarter of the Company's fiscal year. Asset management fees and performance fees are included in advisory fees in the consolidated statement of operations. Assets under management are not included as assets of the Company. Bank Deposit Sweep Income Bank deposit sweep income consists of revenues earned from the Advantage Bank Deposit Program. Under this program, client funds are swept into deposit accounts at participating banks and are eligible for FDIC deposit insurance up to FDIC standard maximum deposit insurance amounts. The Company earns the fee paid on these deposits after administrative fees are paid to the administrator of the program. The fee earned in the period is recorded in bank deposit sweep income and the portion of interest credited to clients is recorded in interest expense in the consolidated statement of operations. Balance Sheet Cash and Cash Equivalents The Company defines cash equivalents as highly liquid investments with original maturities of less than 90 days that are not held for sale in the ordinary course of business. Receivables from / Payables to Brokers, Dealers and Clearing Organizations Securities borrowed and securities loaned are carried at the amounts of cash collateral advanced or received. Securities borrowed transactions require the Company to deposit cash or other collateral with the lender. The Company receives cash or collateral in an amount generally in excess of the market value of securities loaned. The Company monitors the market value of securities borrowed and loaned on a daily basis and may require counterparties to deposit additional collateral or return collateral pledged, when appropriate. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 81 Securities failed to deliver and receive represent the contract value of securities which have not been delivered or received, respectively, by settlement date. Securities Purchased under Agreements to Resell and Securities Sold under Agreements to Repurchase Reverse repurchase agreements and securities sold under agreements to repurchase ("repurchase agreements") are treated as collateralized financing transactions and are recorded at their contractual amounts plus accrued interest. The resulting interest income and expense for these arrangements are included in interest income and interest expense in the consolidated statement of operations. Additionally, the Company elected the fair value option for repurchase agreements and reverse repurchase agreements that do not settle overnight or have an open settlement date. The Company can present the reverse repurchase and repurchase transactions on a net-by-counterparty basis when the specific offsetting requirements are satisfied. Notes Receivable Notes receivable represent recruiting and retention payments generally in the form of upfront loans to financial advisers and key revenue producers as part of the Company's overall growth strategy. These notes generally amortize over a service period of 3 to 9 years from the initial date of the note or based on productivity levels of employees. All such notes are contingent on the employees' continued employment with the Company. The unforgiven portion of the notes becomes due on demand in the event the employee departs during the service period. Amortization of notes receivable is included in the consolidated statement of operations in compensation and related expenses. Furniture, Equipment and Leasehold Improvements Furniture, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation of furniture, fixtures, and equipment is provided on a straight-line basis generally over 3-7 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the life of the improvement or the remaining term of the lease. Leases with escalating rents are expensed on a straight-line basis over the life of the lease. Landlord incentives are recorded as deferred rent and amortized, as reductions to lease expense, on a straight-line basis over the life of the applicable lease. Deferred rent is included in accounts payable and other liabilities on the consolidated balance sheet. Drafts Payable Drafts payable represent amounts drawn by the Company against a bank. Bank Call Loans Bank call loans are generally payable on demand and bear interest at various rates, such loans were collateralized by firm and/ or customer securities. Foreign Currency Translations Foreign currency balances have been translated into U.S. dollars as follows: monetary assets and liabilities at exchange rates prevailing at period end; revenue and expenses at average rates for the period; and non-monetary assets and stockholders' equity at historical rates. The functional currency of the overseas operations is the local currency in each location except for Oppenheimer Europe Ltd. and Oppenheimer Investments Asia Limited which have the U.S. dollar as their functional currency. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 82 The Company recognizes deferred tax assets to the extent it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and the results of recent operations. The Company records uncertain tax positions in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740, "Income Taxes" on the basis of a two-step process whereby it determines 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, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company records interest and penalties accruing on unrecognized tax benefits in income before income taxes as interest expense and other expense, respectively, in its consolidated statement of operations. The Company permanently reinvests eligible earnings of its foreign subsidiaries and, accordingly, does not accrue any U.S. income taxes that would arise if such earnings were repatriated. On December 22, 2017, the Federal government enacted Public Law 115-97, commonly referred to as the Tax Cuts and Jobs Act ("TCJA"). The TCJA makes broad and complex changes to the U.S. tax code, including, but not limited to: (1) reducing the U.S. Federal corporate tax rate from 35 percent to 21 percent; (2) requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; (3) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; (4) a new provision designed to tax global intangible low-taxed income ("GILTI"), which allows for the possibility of using foreign tax credits ("FTCs") and a deduction of up to 50 percent to offset the income tax liability (subject to some limitations); (5) limitations on the use of FTCs to reduce the U.S. income tax liability; (6) eliminating the corporate alternative minimum tax ("AMT") and changing how existing AMT credits can be realized; (7) creating the base erosion anti- abuse tax, a new minimum tax; (8) limitations on the deductibility of certain executive compensation; (9) creating a new limitation on deductible interest expense; (10) eliminating the deductibility of entertainment expenses; and (11) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin 118 (“SAB 118”) which provides guidance on accounting for the impact of the Tax Cuts and Jobs Act (the “TCJA”). SAB 118 provides a measurement period, not to exceed 12 months from the date of enactment to complete, the accounting associated with the TCJA. Under SAB 118, for matters for which the accounting related to the TCJA had not yet been completed, the Company recognized provisional amounts to the extent that they were reasonably estimable. The Company has completed its accounting of the impact of the TJCA in the current period and there were no significant changes to the provisional amounts previously recorded in accordance with SAB 118. See note 14, Income taxes. New Accounting Pronouncements Recently Issued In February 2016, the FASB issued ASU 2016-02, "Leases." The ASU requires the recognition of a right-of-use asset and lease liability on the balance sheet by lessees for those leases classified as operating leases under previous guidance. The ASU is effective for fiscal years beginning after December 15, 2018. The Company evaluated the impact of adopting this ASU which will have a significant impact on its consolidated financial statements. Since the Company has operating leases in over 100 locations, equipment leases and embedded leases, the Company expects to recognize a significant right-of use asset and lease liability on its consolidated balance sheet upon adoption of this ASU. As of December 31, 2018, the Company estimates that it will record right-of-use assets between $170.0 million to $215.0 million and lease liabilities within the same range on the consolidated balance sheet upon the adoption of this standard, which predominately relates to real estate leases. The Company has elected the modified retrospective method and will include any cumulative-effect adjustment as of the date of adoption. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 83 In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments," which amends the FASB's guidance on the impairment of financial instruments. The ASU adds to U.S. GAAP an impairment model ("current expected credit loss model"). Under this new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The ASU is effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact, if any, that the ASU will have on the Company; the adoption of the ASU is not currently expected to have a material impact on the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other, Simplifying the Test for Goodwill Impairment," which simplifies the subsequent measurement of goodwill. The Company is no longer required to perform its Step 2 goodwill impairment test; instead, the Company should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The ASU is effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. The Company will not early adopt this ASU. The Company is currently evaluating the impact, if any, of the ASU on the Company; the adoption of the ASU is not currently expected to have a material impact on the Company's consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, "Targeted Improvements to Accounting for Hedging Activities," which amends the hedge accounting recognition and presentation requirements. The ASU improves the transparency and understandability of information conveyed to financial statement users by better aligning companies' hedging relationships to their existing risk management strategies, simplifies the application of hedge accounting and increases transparency regarding the scope and results of the hedging program. The ASU is effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. The Company will not early adopt this ASU. The Company is currently evaluating the impact, if any, of the ASU on the Company; the adoption of the ASU is not currently expected to have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement - Disclosure Framework - Changes to the Disclosure Requirements for the Fair Value Measurement," which modifies the disclosure requirements related to fair value measurement. The ASU is effective for fiscal years and interim periods beginning after December 15, 2019 and early adoption is permitted. The Company will not early adopt this ASU. The Company is currently evaluating the impact, if any, of the ASU on the Company's disclosure. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 84 3. Discontinued operations OMHHF historically was engaged in the business of originating and servicing FHA-insured multifamily and healthcare facility loans and securitizing these loans into GNMA mortgage backed securities. OMHHF offered mortgage services to developers of commercial properties including apartments, elderly housing and nursing homes that satisfied FHA criteria. During 2016, the Company sold substantially all of the assets of OMHHF and ceased it operations. The Company determined that the sale of the assets of OMHHF met the criteria to be classified within discontinued operations, and the results of OMHHF are reported as discontinued operations in the consolidated statements of operations. The following is a summary of revenue and expenses of OMHHF for the years ended December 31, 2018, 2017 and 2016: (Expressed in thousands) For the Years Ended December 31, 2018 2017 2016 REVENUE Interest $—$8 $943 Principal transactions, net ——(9,022) Gain on sale of assets ——16,475 Other (1)—2,165 16,917 Total revenue —2,173 25,313 EXPENSES Compensation and related expenses —18 4,311 Communications and technology —27 221 Occupancy and equipment costs ——415 Interest —12 408 Other —45 2,619 Total expenses —102 7,974 Income before income taxes $—$2,071 $17,339 Income attributable to non-controlling interest before income taxes $—$338 $2,830 (1) Other revenue for the year ended December 31, 2017 was primarily due to an earn-out from the sale of OMHHF's pipeline business in 2016. The following is a summary of cash flows of OMHHF for the years ended December 31, 2018, 2017 and 2016: (Expressed in thousands) For the Years Ended December 31, 2018 2017 2016 Cash provided by (used in) operating activities $—$5,721 $(14,097) Cash provided by investing activities ——45,448 Cash used in financing activities (1) (2)(372)(20,035)(35,421) Net decrease in cash and cash equivalents $(372)$(14,314)$(4,070) (1) Includes cash dividends paid to OMHHF's parent (E.A. Viner International Co.) and non-controlling interest of $nil and $345,000, respectively, for the year ended December 31, 2018 ($12.6 million and $2.4 million, respectively, for the year ended December 31, 2017). (2) Includes $5.0 million paid to OMHHF's parent due to redemption of the parent's outstanding preferred stock for the year ended December 31, 2017. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 85 4. Revenues from contracts with customers In the first quarter of 2018, the Company adopted ASU 2014-09, "Revenue from Contracts with Customers." The Company has elected the modified retrospective method which did not result in a cumulative-effect adjustment at the date of adoption. The implementation of this new standard had no material impact on the Company's consolidated financial statements for the year ended December 31, 2018. Revenue from contracts with customers is recognized when, or as, the Company satisfies its performance obligations by transferring the promised goods or services to customers. A good or service is transferred to a customer when, or as, the customer obtains control of that good or service. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied over time is recognized by measuring the Company's progress in satisfying the performance obligation in a manner that depicts the transfer of the goods or services to the customer. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that the Company determines the customer obtains control over the promised good or service. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for those promised goods or services (i.e., the "transaction price"). In determining the transaction price, the Company considers multiple factors, including the effects of variable consideration. Variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved. In determining when to include variable consideration in the transaction price, the Company considers the range of possible outcomes, the predictive value of our past experiences, the time period of when uncertainties expect to be resolved and the amount of consideration that is susceptible to factors outside of the Company's influence, such as market volatility or the judgment and actions of third parties. The Company earns revenue from contracts with customers and other sources (principal transactions, interest and other). The following provides detailed information on the recognition of the Company's revenue from contracts with customers: Commissions Commissions from Sales and Trading — The Company earns commission revenue by executing, settling and clearing transactions with clients primarily in exchange-traded and over-the-counter corporate equity and debt securities, money market instruments and exchange-traded options and futures contracts. A substantial portion of Company's revenue is derived from commissions from private clients through accounts with transaction-based pricing. Trade execution and clearing services, when provided together, represent a single performance obligation as the services are not separately identifiable in the context of the contract. Commission revenue associated with combined trade execution and clearing services, as well as trade execution services on a standalone basis, is recognized at a point in time on trade date when the performance obligation is satisfied. Commission revenue is generally paid on settlement date, which is generally two business days after trade date for equity securities and corporate bond transactions and one day for government securities and commodities transactions. The Company records a receivable on the trade date and receives a payment on settlement date. Mutual Fund Income — The Company earns mutual fund income for sales and distribution of mutual fund shares. Many mutual fund companies pay distribution fees to intermediaries, such as broker-dealers, for selling their shares. The fees are operational expenses of the mutual fund and are included in its expense ratio. The Company recognizes mutual fund income at a point in time on trade date when the performance obligation is satisfied which is when the mutual fund interest is sold to the investor. Mutual fund income is generally received within 90 days. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 86 Advisory Fees The Company earns management and performance (or incentive) fees in connection with the advisory and asset management services it provides to various types of funds and investment vehicles through its subsidiaries. Management fees are generally based on the account value at the valuation date per the respective asset management agreements and are recognized over time as the customer receives the benefits of the services evenly throughout the term of the contract. Performance fees are recognized when the return on client AUM exceeds a specified benchmark return or other performance targets over a 12-month measurement period. Performance fees are considered variable as they are subject to fluctuation and/or are contingent on a future event over the measurement period and are not subject to adjustment once the measurement period ends. Such fees are computed as of the fund's year-end when the measurement period ends and generally are recorded as earned in the fourth quarter of the Company's fiscal year. Both management and performance fees are generally received within 90 days. Investment Banking The Company earns underwriting revenues by providing capital raising solutions for corporate clients through initial public offerings, follow-on offerings, equity-linked offerings, private investments in public entities, and private placements. Underwriting revenues are recognized at a point in time on trade date, as the client obtains the control and benefit of the capital markets offering at that point. These fees are generally received within 90 days after the transactions are completed. Transaction-related expenses, primarily consisting of legal, travel and other costs directly associated with the transaction, are deferred and recognized in the same period as the related investment banking transaction revenue. Underwriting revenues and related expenses are presented gross on the consolidated statement of operations. Revenue from financial advisory services includes fees generated in connection with mergers, acquisitions and restructuring transactions and such revenue and fees are primarily recorded at a point in time when services for the transactions are completed and income is reasonably determinable, generally as set forth under the terms of the engagement. Payment for advisory services is generally due upon a completion of the transaction or milestone. Retainer fees and fees earned from certain advisory services are recognized ratably over the service period as the customer receives the benefit of the services throughout the term of the contracts, and such fees are collected based on the terms of the contracts. Bank Deposit Sweep Income Bank deposit sweep income consists of revenue earned from the FDIC-insured bank deposit program. Under this program, client funds are swept into deposit accounts at participating banks and are eligible for FDIC deposit insurance up to FDIC standard maximum deposit insurance amounts. Fees are earned over time and are generally received within 30 days. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 87 Disaggregation of Revenue The following presents the Company's revenue from contracts with customers disaggregated by major business activity and other sources of revenue for the year ended December 31, 2018: (Expressed in thousands)For the Year Ended December 31, 2018 Reportable Segments Private Client Asset Management Capital Markets Corporate/ Other Total Revenues from contracts with customers: Commissions from sales and trading $154,167 $—$131,955 $89 $286,211 Mutual fund income 42,514 908 13 22 43,457 Advisory fees 243,474 70,775 67 33 314,349 Investment banking - capital markets 13,284 —56,474 —69,758 Investment banking - advisory ——45,595 —45,595 Bank deposit sweep income 116,052 ———116,052 Other 14,745 13 1,054 352 16,164 Total revenues from contracts with customers 584,236 71,696 235,158 496 891,586 Other sources of revenue: Interest 37,581 —13,739 1,164 52,484 Principal transactions, net (1,125)—23,378 (7,792)14,461 Other (2,821)—444 2,000 (377) Total other sources of revenue 33,635 —37,561 (4,628)66,568 Total revenue $617,871 $71,696 $272,719 $(4,132)$958,154 Contract Balances The timing of the Company's revenue recognition may differ from the timing of payment by its customers. The Company records receivables when revenue is recognized prior to payment and it has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. The Company had receivables related to revenue from contracts with customers of $23.7 million and $21.0 million at December 31, 2018 and January 1, 2018, respectively. The Company had no significant impairments related to these receivables during the year ended December 31, 2018. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 88 The following presents the Company's contract assets and deferred revenue balances from contracts with customers, which are included in other assets and other liabilities, respectively, on the consolidated balance sheet: (Expressed in thousands) Ending Balance at December 31, 2018 Opening Balance at January 1, 2018 Contract assets (receivables): Commission (1)$3,738 $2,007 Mutual fund income (2)7,241 7,779 Advisory fees (3)1,214 1,460 Bank deposit sweep income (4)4,622 3,459 Investment banking fees (5)3,996 3,926 Other 2,869 2,398 Total contract assets $23,680 $21,029 Deferred revenue (payables): Investment banking fees (6)$318 $— Total deferred revenue $318 $— (1) Commission recorded on trade date but not yet settled. (2) Mutual fund income earned but not yet received. (3) Management and performance fees earned but not yet received. (4) Fees earned from FDIC-insured bank deposit program but not yet received. (5) Underwriting revenue and advisory fee earned but not yet received. (6) Retainer fees and fees earned from certain advisory transactions where the performance obligations have not yet been satisfied. Contract Costs The Company incurs incremental transaction-related costs to obtain and/or fulfill contracts associated with investment banking and advisory engagements where the revenue is recognized at a point in time and the costs are determined to be recoverable. As of December 31, 2018, the contract costs were $1.6 million. There were no significant charges recognized in relation to these costs for year ended December 31, 2018. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 89 5. Receivable from and payable to brokers, dealers and clearing organizations (Expressed in thousands) As of December 31, 2018 2017 Receivable from brokers, dealers and clearing organizations consists of: Securities borrowed $108,144 $132,368 Receivable from brokers 20,140 19,298 Securities failed to deliver 7,021 9,442 Clearing organizations 28,777 24,361 Other 2,411 1,646 Total $166,493 $187,115 Payable to brokers, dealers and clearing organizations consists of: Securities loaned $146,815 $180,270 Payable to brokers 158 1,567 Securities failed to receive 27,799 17,559 Other 114,435 12,087 Total $289,207 $211,483 6. Fair value measurements Securities owned, securities sold but not yet purchased, investments and derivative contracts are carried at fair value with changes in fair value recognized in earnings each period. Valuation Techniques A description of the valuation techniques applied and inputs used in measuring the fair value of the Company's financial instruments is as follows: U.S. Government Obligations U.S. Treasury securities are valued using quoted market prices obtained from active market makers and inter-dealer brokers. U.S. Agency Obligations U.S. agency securities consist of agency issued debt securities and mortgage pass-through securities. Non-callable agency issued debt securities are generally valued using quoted market prices. Callable agency issued debt securities are valued by benchmarking model-derived prices to quoted market prices and trade data for identical or comparable securities. The fair value of mortgage pass-through securities are model driven with respect to spreads of the comparable to-be-announced ("TBA") security. Sovereign Obligations The fair value of sovereign obligations is determined based on quoted market prices when available or a valuation model that generally utilizes interest rate yield curves and credit spreads as inputs. Corporate Debt and Other Obligations The fair value of corporate bonds is estimated using recent transactions, broker quotations and bond spread information. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 90 Mortgage and Other Asset-Backed Securities The Company values non-agency securities collateralized by home equity and various other types of collateral based on external pricing and spread data provided by independent pricing services. When specific external pricing is not observable, the valuation is based on yields and spreads for comparable bonds. Municipal Obligations The fair value of municipal obligations is estimated using recently executed transactions, broker quotations, and bond spread information. Convertible Bonds The fair value of convertible bonds is estimated using recently executed transactions and dollar-neutral price quotations, where observable. When observable price quotations are not available, fair value is determined based on cash flow models using yield curves and bond spreads as key inputs. Corporate Equities Equity securities and options are generally valued based on quoted prices from the exchange or market where traded. To the extent quoted prices are not available, fair values are generally derived using bid/ask spreads. Auction Rate Securities ("ARS") In February 2010, Oppenheimer finalized settlements with each of the New York Attorney General's office ("NYAG") and the Massachusetts Securities Division ("MSD" and, together with the NYAG, the "Regulators") concluding investigations and administrative proceedings by the Regulators concerning Oppenheimer's marketing and sale of ARS. Pursuant to the settlements with the Regulators, Oppenheimer agreed to extend offers to repurchase ARS from certain of its clients subject to certain terms and conditions more fully described below. As of December 31, 2018, the Company had no outstanding ARS purchase commitments related to the settlements with the Regulators. In addition to the settlements with the Regulators, Oppenheimer has also reached settlements of and received adverse awards in legal proceedings with various clients where the Company is obligated to purchase ARS. Pursuant to completed Purchase Offers (as defined) under the settlements with the Regulators and client-related legal settlements and awards to purchase ARS, as of December 31, 2018, the Company purchased and holds (net of redemptions) approximately $40.7 million in ARS from its clients. In addition, the Company is committed to purchase another $7.3 million in ARS from clients through 2020 under legal settlements and awards. The ARS positions that the Company owns and is committed to purchase primarily represent auction rate preferred securities issued by closed-end funds and, to a lesser extent, municipal auction rate securities that are municipal bonds wrapped by municipal bond insurance and student loan auction rate securities that are asset-backed securities backed by student loans. Interest rates on ARS typically reset through periodic auctions. Due to the auction mechanism and generally liquid markets, ARS have historically been classified as Level 1 of the fair value hierarchy. Beginning in February 2008, uncertainties in the credit markets resulted in substantially all of the ARS market experiencing failed auctions. Once the auctions failed, the ARS could no longer be valued using observable prices set in the auctions. The Company has used less observable determinants of the fair value of ARS, including the strength in the underlying credits, announced issuer redemptions, completed issuer redemptions, and announcements from issuers regarding their intentions with respect to their outstanding ARS. The Company has also developed an internal methodology to discount for the lack of liquidity and non-performance risk of the failed auctions. Due to liquidity problems associated with the ARS market, ARS that lack liquidity are setting their interest rates according to a maximum rate formula. For example, an auction rate preferred security maximum rate may be set at 200% of a short-term index such as LIBOR or U.S. Treasury yield. For fair value purposes, the Company has determined that the maximum spread would be an adequate risk premium to account for illiquidity in the market. Accordingly, the Company applies a spread to the short- term index for each asset class to derive the discount rate. The Company uses short-term U.S. Treasury yields as its benchmark short-term index. The risk of non-performance is typically reflected in the prices of ARS positions where the fair value is derived from recent trades in the secondary market. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 91 The ARS purchase commitment, or derivative asset or liability, arises from both the settlements with the Regulators and legal settlements and awards. The ARS purchase commitment represents the difference between the principal value and the fair value of the ARS the Company is committed to purchase. The Company utilizes the same valuation methodology for the ARS purchase commitment as it does for the ARS it owns. Additionally, the present value of the future principal value of ARS purchase commitments under legal settlements and awards is used in the discounted valuation model to reflect the time value of money over the period of time that the commitments are outstanding. The amount of the ARS purchase commitment only becomes determinable once the Company has met with its primary regulator and the NYAG and agreed upon a buyback amount, commenced the ARS buyback offer to clients, and received notice from its clients which ARS they are tendering. As a result, it is not possible to observe the current yields actually paid on the ARS until all of these events have happened which is typically very close to the time that the Company actually purchases the ARS. For ARS purchase commitments pursuant to legal settlements and awards, the criteria for purchasing ARS from clients is based on the nature of the settlement or award which will stipulate a time period and amount for each repurchase. The Company will not know which ARS will be tendered by the client until the stipulated time for repurchase is reached. Therefore, the Company uses the current yields of ARS owned in its discounted valuation model to determine a fair value of ARS purchase commitments. The Company also uses these current yields by asset class (i.e., auction rate preferred securities, municipal auction rate securities, and student loan auction rate securities) in its discounted valuation model to determine the fair value of ARS purchase commitments. In addition, the Company uses the discount rate and duration of ARS owned, by asset class, as a proxy for the duration of ARS purchase commitments. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 92 Additional information regarding the valuation technique and inputs for ARS used is as follows: (Expressed in thousands) Quantitative Information about ARS Level 3 Fair Value Measurements as of December 31, 2018 Product Principal Valuation Adjustment Fair Value Valuation Technique Unobservable Input Range Weighted Average Auction Rate Securities Owned (1) Auction Rate Preferred Securities $21,350 $1 $21,349 Discounted Cash Flow Discount Rate (2)2.86% to 3.89%3.88% —Duration 1 Year 1 Year Current Yield (3)2.69% to 4.05%4.03% Auction Rate Preferred Securities 18,950 2,697 16,253 Tender Offer (4)N/A N/A N/A Municipal Auction Rate Securities 75 —75 Discounted Cash Flow Discount Rate (5)4.35%4.35% Duration 2 years 2 years Current Yield (3)5.51%5.51% Student Loan Auction Rate Securities 275 —275 Discounted Cash Flow Discount Rate (6)3.68%3.68% Duration 4.0 Years 4.0 Years Current Yield (3)3.64%3.64% $40,650 $2,698 $37,952 Auction Rate Securities Commitments to Purchase (7) Auction Rate Preferred Securities 7,305 1,096 6,209 Tender Offer (4)N/A N/A N/A $7,305 $1,096 $6,209 Total $47,955 $3,794 $44,161 (1) Principal amount represents the par value of the ARS and is included in securities owned on the consolidated balance sheet as of December 31, 2018. The valuation adjustment amount is included as a reduction to securities owned on the consolidated balance sheet as of December 31, 2018. (2) Derived by applying a multiple to a spread between 110% to 150% to the U.S. Treasury rate of 2.60%. (3) Based on current yields for ARS positions owned. (4) Residual ARS amounts owned and ARS commitments to purchase that were subject to tender offers were priced at the tender offer price. Included in Level 2 of the fair value hierarchy. (5) Derived by applying the sum of the spread of 175% to the U.S. Treasury rate of 2.49%. (6) Derived by applying the sum of the spread of 1.20% to the U.S. Treasury rate of 2.48%. (7) Principal amount represents the present value of the ARS par value that the Company is committed to purchase at a future date. This principal amount is presented as an off-balance sheet item. The valuation adjustment amount is included in accounts payable and other liabilities on the consolidated balance sheet as of December 31, 2018. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 93 The fair value of ARS and ARS purchase commitments is particularly sensitive to movements in interest rates. Increases in short-term interest rates would increase the discount rate input used in the ARS valuation and thus reduce the fair value of the ARS (increase the valuation adjustment). Conversely, decreases in short-term interest rates would decrease the discount rate and thus increase the fair value of ARS (decrease the valuation adjustment). However, an increase (decrease) in the discount rate input would be partially mitigated by an increase (decrease) in the current yield earned on the underlying ARS asset increasing the cash flows and thus the fair value. Furthermore, movements in short term interest rates would likely impact the ARS duration (i.e., sensitivity of the price to a change in interest rates), which would also have a mitigating effect on interest rate movements. For example, as interest rates increase, issuers of ARS have an incentive to redeem outstanding securities as servicing the interest payments gets prohibitively expensive which would lower the duration assumption thereby increasing the ARS fair value. Alternatively, ARS issuers are less likely to redeem ARS in a lower interest rate environment as it is a relatively inexpensive source of financing which would increase the duration assumption thereby decreasing the ARS fair value. For example, see the following sensitivities: • The impact of a 25 basis point increase in the discount rate at December 31, 2018 would result in a decrease in the fair value of $22,000 (does not consider a corresponding reduction in duration as discussed above). • The impact of a 50 basis point increase in the discount rate at December 31, 2018 would result in a decrease in the fair value of $76,000 (does not consider a corresponding reduction in duration as discussed above). These sensitivities are hypothetical and are based on scenarios where they are "stressed" and should be used with caution. These estimates do not include all of the interplay among assumptions and are estimated as a portfolio rather than as individual assets. Due to the less observable nature of these inputs, ARS are primarily categorized in Level 3 of the fair value hierarchy. As of December 31, 2018, the Company had a valuation adjustment (unrealized loss) of $2.7 million for ARS owned which is included as a reduction to securities owned on the consolidated balance sheet. As of December 31, 2018, the Company also had a valuation adjustment of $1.1 million on ARS purchase commitments from legal settlements and awards which is included in accounts payable and other liabilities on the consolidated balance sheet. The total valuation adjustment was $3.8 million as of December 31, 2018. The valuation adjustment represents the difference between the principal value and the fair value of the ARS owned and ARS purchase commitments. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 94 Investments In its role as general partner in certain hedge funds and private equity funds, the Company, through its subsidiaries, holds direct investments in such funds. The Company uses the net asset value of the underlying fund as a basis for estimating the fair value of its investment. The following table provides information about the Company's investments in Company-sponsored funds as of December 31, 2018: (Expressed in thousands) Fair Value Unfunded Commitments Redemption Frequency Redemption Notice Period Hedge funds (1)$1,596 $—Quarterly - Annually 30 - 120 Days Private equity funds (2)4,908 1,399 N/A N/A $6,504 $1,399 (1) Includes investments in hedge funds and hedge fund of funds that pursue long/short, event-driven, and activist strategies. Each hedge fund has various restrictions regarding redemption; no investment is locked-up for a period greater than one year. (2) Includes private equity funds and private equity fund of funds with a focus on diversified portfolios, real estate and global natural resources. Due to the illiquid nature of these funds, investors are not permitted to make withdrawals without the consent of the general partner. The lock-up period of the private equity funds can extend to 10 years. Valuation Process The Company's Finance & Accounting ("F&A") group is responsible for the Company's fair value policies, processes and procedures. F&A is independent from the business units and trading desks and is headed by the Company's Chief Financial Officer ("CFO"), who has final authority over the valuation of the Company's financial instruments. The Finance Control Group ("FCG") within F&A is responsible for daily profit and loss reporting, front-end trading system position reconciliations, monthly profit and loss reporting, and independent price verification procedures. For financial instruments categorized in Levels 1 and 2 of the fair value hierarchy, the FCG performs a monthly independent price verification to determine the reasonableness of the prices provided by the Company's independent pricing vendor. The FCG uses its third-party pricing vendor, executed transactions, and broker-dealer quotes for validating the fair values of financial instruments. For financial instruments categorized in Level 3 of the fair value hierarchy measured on a recurring basis, primarily for ARS, a group comprised of the CFO, the Controller, and an Operations Director are responsible for the ARS valuation model and resulting fair valuations. Procedures performed include aggregating all ARS owned by type from firm inventory accounts and ARS purchase commitments from regulatory and legal settlements and awards provided by the Legal Department. Observable and unobservable inputs are aggregated from various sources and entered into the ARS valuation model. For unobservable inputs, the group reviews the appropriateness of the inputs to ensure consistency with how a market participant would arrive at the unobservable input. For example, for the duration assumption, the group would consider recent policy statements regarding short-term interest rates by the Federal Reserve and recent ARS issuer redemptions and announcements for future redemptions. The model output is reviewed for reasonableness and consistency. Where available, comparisons are performed between ARS owned or committed to purchase with ARS that are trading in the secondary market. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 95 Assets and Liabilities Measured at Fair Value The Company's assets and liabilities, recorded at fair value on a recurring basis as of December 31, 2018 and 2017, have been categorized based upon the above fair value hierarchy as follows: Assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 (Expressed in thousands) Fair Value Measurements as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets Cash equivalents $10,500 $—$—$10,500 Deposits with clearing organizations 34,599 ——34,599 Securities owned: U.S. Treasury securities 657,208 ——657,208 U.S. Agency securities 812 6,494 —7,306 Sovereign obligations —214 —214 Corporate debt and other obligations —20,665 —20,665 Mortgage and other asset-backed securities —2,486 —2,486 Municipal obligations —52,261 —52,261 Convertible bonds —31,270 —31,270 Corporate equities 28,215 ——28,215 Money markets 7 ——7 Auction rate securities —16,253 21,699 37,952 Securities owned, at fair value 686,242 129,643 21,699 837,584 Investments (1)——101 101 Derivative contracts: TBAs —4,873 —4,873 Total $731,341 $134,516 $21,800 $887,657 Liabilities Securities sold but not yet purchased: U.S. Treasury securities $53,646 $—$—$53,646 U.S. Agency securities —3 —3 Sovereign obligations —78 —78 Corporate debt and other obligations —7,236 —7,236 Convertible bonds —9,709 —9,709 Corporate equities 14,774 ——14,774 Securities sold but not yet purchased, at fair value 68,420 17,026 —85,446 Derivative contracts: Futures 807 ——807 Foreign exchange forward contracts 4 ——4 TBAs —4,873 —4,873 ARS purchase commitments —1,096 —1,096 Derivative contracts, total 811 5,969 —6,780 Total $69,231 $22,995 $—$92,226 (1) Included in other assets on the consolidated balance sheet. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 96 Assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 (Expressed in thousands) Fair Value Measurements as of December 31, 2017 Level 1 Level 2 Level 3 Total Assets Cash equivalents $10,490 $—$—$10,490 Deposits with clearing organizations 34,293 ——34,293 Securities owned: U.S. Treasury securities 640,337 ——640,337 U.S. Agency securities 3,011 6,894 —9,905 Sovereign obligations —608 —608 Corporate debt and other obligations —12,538 —12,538 Mortgage and other asset-backed securities —4,037 —4,037 Municipal obligations —89,618 35 89,653 Convertible bonds —23,216 —23,216 Corporate equities 34,067 ——34,067 Money markets 383 ——383 Auction rate securities —24,455 87,398 111,853 Securities owned, at fair value 677,798 161,366 87,433 926,597 Investments (1)——169 169 Derivative contracts: TBAs —716 —716 Total $722,581 $162,082 $87,602 $972,265 Liabilities Securities sold but not yet purchased: U.S. Treasury securities $53,425 $—$—$53,425 U.S. Agency securities —13 —13 Sovereign obligations —1,179 —1,179 Corporate debt and other obligations —4,357 —4,357 Mortgage and other asset-backed securities —10 —10 Convertible bonds —10,109 —10,109 Corporate equities 25,393 ——25,393 Securities sold but not yet purchased, at fair value 78,818 15,668 —94,486 Derivative contracts: Futures 766 ——766 TBAs —614 —614 ARS purchase commitments ——8 8 Derivative contracts, total 766 614 8 1,388 Total $79,584 $16,282 $8 $95,874 (1) Included in other assets on the consolidated balance sheet. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 97 The following tables present changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the years ended December 31, 2018 and 2017: (Expressed in thousands) Level 3 Assets and Liabilities For the Year Ended December 31, 2018 Beginning Balance Total Realized and Unrealized Gains (Losses) (3)(4)Purchases and Issuances Sales and Settlements Transfers In / Out Ending Balance Assets Municipal obligations $35 $14 $76 $(125)$—$— Auction rate securities (1) (5)87,398 1,351 6,300 (35,675)(37,675)21,699 Investments 169 (8)——(60)101 Liabilities ARS purchase commitments (2) (5)8 (1,088)——1,096 — (1) Represents auction rate preferred securities, municipal auction rate securities and student loan auction rate securities that failed in the auction rate market. (2) Represents the difference in principal and fair value for auction rate securities purchase commitments outstanding at the end of the period. (3) Included in principal transactions in the consolidated statement of operations, except for gains (losses) from investments which are included in other income in the consolidated statement of operations. (4) Unrealized gains (losses) are attributable to assets or liabilities that are still held at the reporting date. (5) Represents transfers from Level 3 to Level 2 of the fair value hierarchy. Transfers were due to tender offers by issuers of ARS. (Expressed in thousands) Level 3 Assets and Liabilities For the Year Ended December 31, 2017 Beginning Balance Total Realized and Unrealized Gains (Losses) (3)(4)Purchases and Issuances Sales and Settlements Transfers In / Out Ending Balance Assets Municipal obligations $44 $(9)$—$—$—$35 Auction rate securities (1)84,926 1,177 27,225 (1,475)(24,455)87,398 Investments 158 11 ———169 ARS purchase commitments (2)849 (849)———— Liabilities ARS purchase commitments (2)645 637 ———8 (1) Represents auction rate preferred securities, municipal auction rate securities and student loan auction rate securities that failed in the auction rate market. (2) Represents the difference in principal and fair value for auction rate securities purchase commitments outstanding at the end of the period. (3) Included in principal transactions in the consolidated statement of operations, except for gains (losses) from investments which are included in other income in the consolidated statement of operations. (4) Unrealized gains (losses) are attributable to assets or liabilities that are still held at the reporting date. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 98 Financial Instruments Not Measured at Fair Value The table below presents the carrying value, fair value and fair value hierarchy category of certain financial instruments that are not measured at fair value on the consolidated balance sheets. The table below excludes non-financial assets and liabilities (e.g., furniture, equipment and leasehold improvements and accrued compensation). The carrying value of financial instruments not measured at fair value categorized in the fair value hierarchy as Level 1 or Level 2 (e.g., cash and receivables from customers) approximates fair value because of the relatively short term nature of the underlying assets. The fair value of the Company's senior secured notes, categorized in Level 2 of the fair value hierarchy, is based on quoted prices from the market in which the notes trade. Assets and liabilities not measured at fair value as of December 31, 2018 (Expressed in thousands) Fair Value Measurement: Assets Carrying Value Level 1 Level 2 Level 3 Total Cash $80,175 $80,175 $—$—$80,175 Deposits with clearing organization 33,079 33,079 ——33,079 Receivable from brokers, dealers and clearing organizations: Securities borrowed 108,144 —108,144 —108,144 Receivables from brokers 20,140 —20,140 —20,140 Securities failed to deliver 7,021 —7,021 —7,021 Clearing organizations 28,777 —28,777 —28,777 Other 2,411 —2,411 —2,411 166,493 —166,493 —166,493 Receivable from customers 720,777 —720,777 —720,777 Securities purchased under agreements to resell 290 290 —290 Notes receivable, net 44,058 44,058 —44,058 Investments (1)59,765 —59,765 —59,765 (1) Included in other assets on the consolidated balance sheet. (Expressed in thousands) Fair Value Measurement: Liabilities Carrying Value Level 1 Level 2 Level 3 Total Drafts payable $16,348 $16,348 $—$—$16,348 Bank call loans 15,000 —15,000 —15,000 Payables to brokers, dealers and clearing organizations: Securities loaned 146,815 —146,815 —146,815 Payable to brokers 158 —158 —158 Securities failed to receive 27,799 —27,799 —27,799 Other 113,628 —113,628 —113,628 288,400 —288,400 —288,400 Payables to customers 336,616 —336,616 —336,616 Securities sold under agreements to repurchase 484,218 —484,218 —484,218 Senior secured notes 200,000 —199,722 —199,722 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 99 Assets and liabilities not measured at fair value as of December 31, 2017 (Expressed in thousands) Fair Value Measurement: Assets Carrying Value Level 1 Level 2 Level 3 Total Cash $37,664 $37,664 $—$—$37,664 Deposits with clearing organization 7,929 7,929 ——7,929 Receivable from brokers, dealers and clearing organizations: Securities borrowed 132,368 —132,368 —132,368 Receivables from brokers 19,298 —19,298 —19,298 Securities failed to deliver 9,442 —9,442 —9,442 Clearing organizations 24,361 —24,361 —24,361 Other 930 —930 —930 186,399 —186,399 —186,399 Receivable from customers 848,226 —848,226 —848,226 Securities purchased under agreements to resell 658 —658 —658 Notes receivable, net 40,520 —40,520 40,520 Investments (1)65,404 —65,404 —65,404 (1) Included in other assets on the consolidated balance sheet. (Expressed in thousands) Fair Value Measurement: Liabilities Carrying Value Level 1 Level 2 Level 3 Total Drafts payable $42,212 $42,212 $—$—$42,212 Bank call loans 118,300 —118,300 —118,300 Payables to brokers, dealers and clearing organizations: Securities loaned 180,270 —180,270 —180,270 Payable to brokers 1,567 —1,567 —1,567 Securities failed to receive 17,559 —17,559 —17,559 Other 10,707 —10,707 —10,707 210,103 —210,103 —210,103 Payables to customers 385,907 —385,907 —385,907 Securities sold under agreements to repurchase 586,478 —586,478 —586,478 Senior secured notes 200,000 —206,380 —206,380 Fair Value Option The Company elected the fair value option for securities sold under agreements to repurchase ("repurchase agreements") and securities purchased under agreements to resell ("reverse repurchase agreements") that do not settle overnight or have an open settlement date. The Company has elected the fair value option for these instruments to reflect more accurately market and economic events in its earnings and to mitigate a potential mismatch in earnings caused by using different measurement attributes (i.e. fair value versus carrying value) for certain assets and liabilities. As of December 31, 2018, the Company did not have any repurchase agreements and reverse repurchase agreements that do not settle overnight or have an open settlement date. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 100 Derivative Instruments and Hedging Activities The Company transacts, on a limited basis, in exchange traded and over-the-counter derivatives for both asset and liability management as well as for trading and investment purposes. Risks managed using derivative instruments include interest rate risk and, to a lesser extent, foreign exchange risk. All derivative instruments are measured at fair value and are recognized as either assets or liabilities on the consolidated balance sheet. Foreign exchange hedges From time to time, the Company also utilizes forward and options contracts to hedge the foreign currency risk associated with compensation obligations to Oppenheimer Israel (OPCO) Ltd. employees denominated in New Israeli Shekel ("NIS"). Such hedges have not been designated as accounting hedges. Unrealized gains and losses on foreign exchange forward contracts are recorded in other assets on the consolidated balance sheet and other income in the consolidated statement of operations. Derivatives used for trading and investment purposes Futures contracts represent commitments to purchase or sell securities or other commodities at a future date and at a specified price. Market risk exists with respect to these instruments. Notional or contractual amounts are used to express the volume of these transactions and do not represent the amounts potentially subject to market risk. The Company uses futures contracts, including U.S. Treasury notes, Federal Funds, General Collateral futures and Eurodollar contracts primarily as an economic hedge of interest rate risk associated with government trading activities. Unrealized gains and losses on futures contracts are recorded on the consolidated balance sheet in payable to brokers, dealers and clearing organizations and in the consolidated statement of operations as principal transactions revenue, net. To-be-announced securities The Company also transacts in pass-through mortgage-backed securities eligible to be sold in the TBA market as economic hedges against mortgage-backed securities that it owns or has sold but not yet purchased. TBAs provide for the forward or delayed delivery of the underlying instrument with settlement up to 180 days. The contractual or notional amounts related to these financial instruments reflect the volume of activity and do not reflect the amounts at risk. Net unrealized gains and losses on TBAs are recorded on the consolidated balance sheet in receivable from brokers, dealers and clearing organizations or payable to brokers, dealers and clearing organizations and in the consolidated statement of operations as principal transactions revenue, net. The notional amounts and fair values of the Company's derivatives as of December 31, 2018 and 2017 by product were as follows: (Expressed in thousands) Fair Value of Derivative Instruments as of December 31, 2018 Description Notional Fair Value Assets: Derivatives not designated as hedging instruments (1) Other contracts TBAs $729,500 $4,873 $729,500 $4,873 Liabilities: Derivatives not designated as hedging instruments (1) Commodity contracts Futures $4,580,800 $807 Other contracts Foreign exchange forward contracts 200 4 TBAs 729,500 4,873 ARS purchase commitments 7,305 1,096 $5,317,805 $6,780 (1) See "Derivative Instruments and Hedging Activities" above for a description of derivative financial instruments. Such derivate instruments are not subject to master netting agreements, thus the related amounts are not offset. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 101 (Expressed in thousands) Fair Value of Derivative Instruments as of December 31, 2017 Description Notional Fair Value Assets: Derivatives not designated as hedging instruments (1) Other contracts TBAs $26,000 $22 Other TBAs (2)39,576 694 $65,576 $716 Liabilities: Derivatives not designated as hedging instruments (1) Commodity contracts Futures $5,844,000 $766 Other contracts TBAs 26,000 22 Other TBAs (2)39,576 592 ARS purchase commitments 10,992 8 $5,920,568 $1,388 (1) See "Derivative Instruments and Hedging Activities" above for a description of derivative financial instruments. Such derivate instruments are not subject to master netting agreements, thus the related amounts are not offset. (2) Represents TBA purchase and sale contracts related to the legacy OMHHF business. The following table presents the location and fair value amounts of the Company's derivative instruments and their effect in the consolidated statements of operations for the years ended December 31, 2018 and 2017: (Expressed in thousands) The Effect of Derivative Instruments in the Statement of Operations For the Year Ended December 31, 2018 Recognized in Income on Derivatives (pre-tax) Types Description Location Net Gain (Loss) Commodity contracts Futures Principal transactions revenue $592 Other contracts Foreign exchange forward contracts Other revenue (7) TBAs Principal transactions revenue 371 ARS purchase commitments Principal transactions revenue (1,088) $(132) (Expressed in thousands) The Effect of Derivative Instruments in the Statement of Operations For the Year Ended December 31, 2017 Recognized in Income on Derivatives (pre-tax) Types Description Location Net Gain (Loss) Commodity contracts Futures Principal transactions revenue $987 Other contracts Foreign exchange forward contracts Other revenue 12 TBAs Principal transactions revenue (167) Other TBAs Other revenue (338) ARS purchase commitments Principal transactions revenue (212) $282 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 102 7. Collateralized transactions The Company enters into collateralized borrowing and lending transactions in order to meet customers' needs and earn interest rate spreads, obtain securities for settlement and finance trading inventory positions. Under these transactions, the Company either receives or provides collateral, including U.S. Government and Agency, asset-backed, corporate debt, equity, and non- U.S. Government and Agency securities. The Company obtains short-term borrowings primarily through bank call loans. Bank call loans are generally payable on demand and bear interest at various rates. As of December 31, 2018, bank call loans were $15.0 million ($118.3 million as of December 31, 2017). As of December 31, 2018, such loans were collateralized by firm and/or customer securities with market values of approximately $18.6 million and $1.6 million, respectively, with commercial banks. As of December 31, 2018, the Company had approximately $1.0 billion of customer securities under customer margin loans that are available to be pledged, of which the Company has re-pledged approximately $112.6 million under securities loan agreements. As of December 31, 2018, the Company had pledged $460.2 million of customer securities directly with the Options Clearing Corporation to secure obligations and margin requirements under option contracts written by customers. As of December 31, 2018, the Company had no outstanding letters of credit. The Company enters into reverse repurchase agreements, repurchase agreements, securities borrowed and securities loaned transactions to, among other things, acquire securities to cover short positions and settle other securities obligations, to accommodate customers' needs and to finance the Company's inventory positions. Except as described below, repurchase and reverse repurchase agreements, principally involving U.S. Government and Agency securities, are carried at amounts at which the securities subsequently will be resold or reacquired as specified in the respective agreements and include accrued interest. Repurchase agreements and reverse repurchase agreements are presented on a net-by-counterparty basis, when the repurchase agreements 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 agreements and reverse repurchase agreements exist in "book entry" form and certain other requirements are met. The following table presents a disaggregation of the gross obligation by the class of collateral pledged and the remaining contractual maturity of the repurchase agreements and securities loaned transactions as of December 31, 2018: (Expressed in thousands) Overnight and Open Repurchase agreements: U.S. Government and Agency securities $566,357 Securities loaned: Equity securities 146,815 Gross amount of recognized liabilities for repurchase agreements and securities loaned $713,172 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 103 The following tables present the gross amounts and the offsetting amounts of reverse repurchase agreements, repurchase agreements, securities borrowed and securities loaned transactions as of December 31, 2018 and 2017: As of December 31, 2018 (Expressed in thousands) Gross Amounts Not Offset on the Balance Sheet Gross Amounts of Recognized Assets Gross Amounts Offset on the Balance Sheet Net Amounts of Assets Presented on the Balance Sheet Financial Instruments Cash Collateral Received Net Amount Reverse repurchase agreements $82,429 $(82,139)$290 $—$—$290 Securities borrowed (1)108,144 —108,144 (105,960)—2,184 Total $190,573 $(82,139)$108,434 $(105,960)$—$2,474 (1) Included in receivable from brokers, dealers and clearing organizations on the consolidated balance sheet. Gross Amounts Not Offset on the Balance Sheet Gross Amounts of Recognized Liabilities Gross Amounts Offset on the Balance Sheet Net Amounts of Liabilities Presented on the Balance Sheet Financial Instruments Cash Collateral Pledged Net Amount Repurchase agreements $566,357 $(82,139)$484,218 $(480,322)$—$3,896 Securities loaned (2)146,815 —146,815 (139,232)—7,583 Total $713,172 $(82,139)$631,033 $(619,554)$—$11,479 (2) Included in payable to brokers, dealers and clearing organizations on the consolidated balance sheet. As of December 31, 2017 (Expressed in thousands) Gross Amounts Not Offset on the Balance Sheet Gross Amounts of Recognized Assets Gross Amounts Offset on the Balance Sheet Net Amounts of Assets Presented on the Balance Sheet Financial Instruments Cash Collateral Received Net Amount Reverse repurchase agreements $200,712 $(200,054)$658 $—$—$658 Securities borrowed (1)132,368 —132,368 (128,575)—3,793 Total $333,080 $(200,054)$133,026 $(128,575)$—$4,451 (1) Included in receivable from brokers, dealers and clearing organizations on the consolidated balance sheet. Gross Amounts Not Offset on the Balance Sheet Gross Amounts of Recognized Liabilities Gross Amounts Offset on the Balance Sheet Net Amounts of Liabilities Presented on the Balance Sheet Financial Instruments Cash Collateral Pledged Net Amount Repurchase agreements $786,532 $(200,054)$586,478 $(585,289)$—$1,189 Securities loaned (2)180,270 —180,270 (170,176)—10,094 Total $966,802 $(200,054)$766,748 $(755,465)$—$11,283 (2) Included in payable to brokers, dealers and clearing organizations on the consolidated balance sheet. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 104 The Company elected the fair value option for those repurchase agreements and reverse repurchase agreements that do not settle overnight or have an open settlement date. As of December 31, 2018, the Company did not have any repurchase agreements and reverse repurchase agreements that do not settle overnight or have an open settlement date. The Company receives collateral in connection with securities borrowed and reverse repurchase agreement transactions and customer margin loans. Under many agreements, the Company is permitted to sell or re-pledge the securities received (e.g., use the securities to enter into securities lending transactions, or deliver to counterparties to cover short positions). As of December 31, 2018, the fair value of securities received as collateral under securities borrowed transactions and reverse repurchase agreements was $104.9 million ($127.2 million as of December 31, 2017) and $83.0 million ($221.6 million as of December 31, 2017), respectively, of which the Company has sold and re-pledged approximately $27.6 million ($30.9 million as of December 31, 2017) under securities loaned transactions and $83.0 million under repurchase agreements ($221.6 million as of December 31, 2017). The Company pledges certain of its securities owned for securities lending and repurchase agreements and to collateralize bank call loan transactions. The carrying value of pledged securities owned that can be sold or re-pledged by the counterparty was $518.0 million, as presented on the face of the consolidated balance sheet as of December 31, 2018 ($655.7 million as of December 31, 2017). The carrying value of securities owned by the Company that have been loaned or pledged to counterparties where those counterparties do not have the right to sell or re-pledge the collateral was $20.2 million as of December 31, 2018 ($97.2 million as of December 31, 2017). The Company manages credit exposure arising from repurchase and reverse repurchase agreements by, in appropriate circumstances, entering into master netting agreements and collateral arrangements with counterparties that provide the Company, in the event of a customer default, the right to liquidate securities and the right to offset a counterparty's rights and obligations. The Company manages market risk of repurchase agreements and securities loaned by monitoring the market value of collateral held and the market value of securities receivable from others. It is the Company's policy to request and obtain additional collateral when exposure to loss exists. In the event the counterparty is unable to meet its contractual obligation to return the securities, the Company may be exposed to off-balance sheet risk of acquiring securities at prevailing market prices. Credit Concentrations Credit concentrations may arise from trading, investing, underwriting and financing activities and may be impacted by changes in economic, industry or political factors. In the normal course of business, the Company may be exposed to credit risk in the event customers, counterparties including other brokers and dealers, issuers, banks, depositories or clearing organizations are unable to fulfill their contractual obligations. The Company seeks to mitigate these risks by actively monitoring exposures and obtaining collateral as deemed appropriate. Included in receivable from brokers, dealers and clearing organizations as of December 31, 2018 are receivables from five major U.S. broker-dealers totaling approximately $86.2 million. The Company is obligated to settle transactions with brokers and other financial institutions even if its clients fail to meet their obligations to the Company. Clients are required to complete their transactions on the settlement date, generally one to two business days after the trade date. If clients do not fulfill their contractual obligations, the Company may incur losses. The Company has clearing/participating arrangements with the National Securities Clearing Corporation, the Fixed Income Clearing Corporation ("FICC"), R.J. O'Brien & Associates (commodities transactions), Mortgage-Backed Securities Division (a division of FICC) and others. With respect to its business in reverse repurchase and repurchase agreements, substantially all open contracts as of December 31, 2018 are with the FICC. In addition, the Company clears its non-U.S. international equities business carried on by Oppenheimer Europe Ltd. through Global Prime Partners, Ltd. The clearing organizations have the right to charge the Company for losses that result from a client's failure to fulfill its contractual obligations. Accordingly, the Company has credit exposures with these clearing brokers. The clearing brokers can re-hypothecate the securities held on behalf of the Company. As the right to charge the Company has no maximum amount and applies to all trades executed through the clearing brokers, the Company believes there is no maximum amount assignable to this right. As of December 31, 2018, the Company had recorded no liabilities with regard to this right. The Company's policy is to monitor the credit standing of the clearing brokers and banks with which it conducts business. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 105 8. Variable interest entities The Company's policy is to consolidate all subsidiaries in which it has a controlling financial interest, as well as any VIEs where the Company is deemed to be the primary beneficiary, when it has the power to make the decisions that most significantly affect the economic performance of the VIE and has the obligation to absorb significant losses or the right to receive benefits that could potentially be significant to the VIE. For funds that the Company has concluded are not VIEs, the Company then evaluates whether the fund is a partnership or similar entity. If the fund is a partnership or similar entity, the Company evaluates the fund under the partnership consolidation guidance. Pursuant to that guidance, the Company consolidates funds in which it is the general partner, unless presumption of control by the Company can be overcome. This presumption is overcome only when unrelated investors in the fund have the substantive ability to liquidate the fund or otherwise remove the Company as the general partner without cause, based on a simple majority vote of unaffiliated investors, or have other substantive participating rights. If the presumption of control can be overcome, the Company accounts for its interest in the fund pursuant to the equity method of accounting. The Company serves as general partner of hedge funds and private equity funds that were established for the purpose of providing investment alternatives to both its institutional and qualified retail clients. The Company holds variable interests in these funds as a result of its right to receive management and incentive fees. The Company's investment in and additional capital commitments to these hedge funds and private equity funds are also considered variable interests. The Company's additional capital commitments are subject to call at a later date and are limited to the amount committed. The Company assesses whether it is the primary beneficiary of the hedge funds and private equity funds in which it holds a variable interest in the form of general and limited partner interests. In each instance, the Company has determined that it is not the primary beneficiary and therefore need not consolidate the hedge funds or private equity funds. The subsidiaries' general and limited partnership interests, additional capital commitments, and management fees receivable represent its maximum exposure to loss. The subsidiaries' general partnership and limited partnership interests and management fees receivable are included in other assets on the consolidated balance sheet. The following tables set forth the total VIE assets, the carrying value of the subsidiaries' variable interests, and the Company's maximum exposure to loss in Company-sponsored non-consolidated VIEs in which the Company holds variable interests and other non-consolidated VIEs in which the Company holds variable interests as of December 31, 2018 and 2017: (Expressed in thousands) As of December 31, 2018 Total VIE Assets (1) Carrying Value of the Company's Variable Interest Capital Commitments Maximum Exposure to Loss in Non-consolidated VIEs Assets (2)Liabilities Hedge funds $291,200 $337 $—$—$337 Private equity funds 7,454 8 ——8 Total $298,654 $345 $—$—$345 (1) Represents the total assets of the VIEs and does not represent the Company's interests in the VIEs. (2) Represents the Company's interests in the VIEs and is included in other assets on the consolidated balance sheet. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 106 (Expressed in thousands) As of December 31, 2017 Total VIE Assets (1) Carrying Value of the Company's Variable Interest Capital Commitments Maximum Exposure to Loss in Non-consolidated VIEs Assets (2)Liabilities Hedge funds $328,172 $713 $—$—$713 Private equity funds 15,668 12 —2 14 Total $343,840 $725 $—$2 $727 (1) Represents the total assets of the VIEs and does not represent the Company's interests in the VIEs. (2) Represents the Company's interests in the VIEs and is included in other assets on the consolidated balance sheet. 9. Furniture, equipment and leasehold improvements (Expressed in thousands) For the Years Ended December 31, 2018 2017 Furniture, fixtures and equipment $57,482 $53,260 Leasehold improvements 60,688 56,753 Total 118,170 110,013 Less accumulated depreciation (89,182)(82,826) Total $28,988 $27,187 Depreciation and amortization expense, included in occupancy and equipment costs in the consolidated statements of operations, was $6.9 million, $5.7 million and $6.8 million in the years ended December 31, 2018, 2017 and 2016, respectively. 10. Bank call loans Bank call loans, primarily payable on demand, bear interest at various rates but not exceeding the broker call rate, which was 4.25% at December 31, 2018 (3.25% at December 31, 2017). Details of the bank call loans are as follows: (Expressed in thousands, except percentages) 2018 2017 Year-end balance $15,000 $118,300 Weighted interest rate (at end of year)3.43%2.25% Maximum balance (at any month-end)161,800 230,400 Average amount outstanding (during the year)53,271 123,918 Average interest rate (during the year)2.66%2.08% Interest expense for the year ended December 31, 2018 on bank call loans was $1.4 million ($2.6 million in 2017 and $1.7 million in 2016). Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 107 11. Long-term debt (Expressed in thousands) Issued Maturity Date December 31, 2018 December 31, 2017 6.75% Senior Secured Notes 7/1/2022 $200,000 $200,000 Unamortized Debt Issuance Cost (904)(1,163) $199,096 $198,837 6.75% Senior Secured Notes On June 23, 2017, the Parent issued in a private offering $200.0 million aggregate principal amount of 6.75% Senior Secured Notes due 2022 (the "Unregistered Notes") under an indenture at an issue price of 100% of the principal amount. On September 19, 2017, the Parent completed an exchange offer in which the Parent exchanged 99.8% of its Unregistered Notes for a like principal amount of notes with identical terms except that such new notes have been registered under the Securities Act of 1933, as amended (the "Notes"). The Parent did not receive any proceeds in the exchange offer. Interest on the Notes is payable semi- annually on January 1st and July 1st, beginning January 1, 2018. On June 23, 2017, the Parent used a portion of the net proceeds from the offering of the Unregistered Notes to redeem in full its 8.75% Senior Secured Notes due April 15, 2018 (the "Old Notes") in the principal amount of $120.0 million, and pay all fees and expenses related thereto. The cost to issue the Notes was $4.3 million, of which $3.0 million was paid to its subsidiary, Oppenheimer, who served as the initial purchaser of the offering, and was eliminated in consolidation. The Company capitalized the remaining $1.3 million and will amortize it over the term of the Notes. The indenture governing the Notes contains covenants that place restrictions on the incurrence of indebtedness, the payment of dividends, the repurchase of equity, the sale of assets, mergers and acquisitions and the granting of liens. Pursuant to the indenture governing the Notes, the Parent is restricted from paying any dividend or making any payment or distribution on account of its equity interests unless, among other things, (i) the dividend, payment or distribution (together with all other such dividends, payments or distributions made since July 1, 2017) is less than an amount calculated based in part on the Consolidated Adjusted Net Income (as defined in the indenture governing the Notes) of the Parent and its restricted and regulated subsidiaries since July 1, 2017, or (ii) the dividend, payment or distribution fits within one or more exceptions, including: • it is less than $20 million in any fiscal year; or • when combined with all other Restricted Payments (as defined in the indenture governing the Notes) that rely upon this exception, it does not exceed $10 million. The Notes provide for events of default including, among other things, nonpayment, breach of covenants and bankruptcy. The Parent's obligations under the Notes are guaranteed by certain of the Parent's subsidiaries and are secured by a first-priority security interest in substantially all of the assets of the Parent and the subsidiary's guarantors. These guarantees and the collateral may be shared, on a pari passu basis, under certain circumstances, with debt incurred. As of December 31, 2018, the Parent was in compliance with all of its covenants. Interest expense for the year ended December 31, 2018 and 2017 on the Notes was $13.5 million and $7.0 million, respectively. Interest paid on the Notes for the year ended December 31, 2018 was $13.8 million ($nil in 2017). 8.75% Senior Secured Notes On April 12, 2011, the Parent issued in a private offering $200.0 million in aggregate principal amount of Old Notes at an issue price of 100% of the principal amount. Interest on the Old Notes was payable semi-annually on April 15th and October 15th. On April 15, 2014, the Parent retired early $50.0 million of the Old Notes. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 108 The indenture for the Old Notes contained covenants, with which the Company was in compliance during 2017. On April 15, 2017, the Parent used the net proceeds from the asset sales of OMHHF to finance the redemption of $30.0 million aggregate principal amount of the Old Notes at a redemption price equal to 100% of the principal, plus accrued and unpaid interest. On June 23, 2017, the Parent used a portion of the net proceeds from the offering of the Notes to redeem in full its Old Notes in the principal amount of $120.0 million and to satisfy and discharge all of its obligations under the indenture governing the Old Notes (the "8.75% Notes Indenture"). In connection with the satisfaction and discharge of the 8.75% Notes Indenture, all of the obligations of the Parent and the subsidiary guarantors (other than certain customary provisions of the 8.75% Notes Indenture, including those relating to the compensation and indemnification of the trustee that expressly survive pursuant to the terms of the 8.75% Notes Indenture) were discharged and the guarantees of the subsidiary guarantors and the liens on the collateral securing the Old Notes were released on June 23, 2017. Interest expense for the year ended December 31, 2017 on the Old Notes was $6.7 million ($13.1 million in 2016). Interest paid on the Old Notes for the year ended December 31, 2017 was $9.4 million ($13.1 million in 2016). 12. Share capital The Company's authorized share capital consists of (a) 50,000,000 shares of Preferred Stock, par value $0.001 per share; (b) 50,000,000 shares of Class A Stock, par value $0.001 per share; and (c) 99,665 shares of Class B Stock, par value $0.001 per share. No Preferred Stock has been issued. 99,665 shares of Class B Stock have been issued and are outstanding. The Class A Stock and the Class B Stock are equal in all respects except that the Class A Stock is non-voting. The following table reflects changes in the number of shares of Class A Stock outstanding for the years indicated: 2018 2017 Class A Stock outstanding, beginning of year 13,139,203 13,261,095 Issued pursuant to share-based compensation plans (note 15)38,728 328,458 Repurchased and canceled pursuant to the stock buy-back (236,122)(450,350) Class A Stock outstanding, end of year 12,941,809 13,139,203 Stock buy-back On May 5, 2017, the Company announced that its board of directors approved a share repurchase program that authorizes the Company to purchase up to 650,000 shares of the Company's Class A Stock, representing approximately 5% of its 13,178,571 then issued and outstanding shares of Class A Stock. This authorization supplemented the 40,734 shares that remained authorized and available under the Company's previous share repurchase program covering up to 665,000 shares of the Company's Class A Stock, which was announced on September 15, 2015, for a total of 690,734 shares authorized and available for repurchase. As of January 1, 2018, 508,906 shares were available to be purchased under this program. During the year ended December 31, 2018, the Company purchased and canceled an aggregate of 236,122 shares of Class A Stock for a total consideration of $5.9 million ($24.96 per share). As of December 31, 2018, 272,784 shares remained available to be purchased under this program. Any such share repurchases 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 senior secured debt. The Company will cancel all of the shares repurchased. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 109 The Company expects to continue the share repurchase program indefinitely. The Company will base the timing and amounts of any purchases on market conditions and other factors including price, regulatory requirements 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. Depending on market conditions and other factors, the Company may commence or suspend repurchases from time to time without notice. Dividends The Company paid cash dividends of $0.44 per share to holders of Class A and Class B Stock in 2018, 2017 and 2016. 13. Earnings per share Basic earnings per share is computed by dividing net income attributable to Oppenheimer Holdings Inc. by the weighted average number of shares of Class A Stock and Class B Stock outstanding. Diluted earnings per share includes the weighted average number of shares of Class A Stock and Class B Stock outstanding and options to purchase the Class A Stock and unvested restricted stock awards of Class A Stock using the treasury stock method. Earnings per share have been calculated as follows: (Expressed in thousands, except number of shares and per share amounts) For the Year Ended December 31, 2018 2017 2016 Basic weighted average number of shares outstanding 13,248,876 13,246,423 13,368,768 Net dilutive effect of share-based awards, treasury method (1)812,493 426,938 — Diluted weighted average number of shares outstanding 14,061,369 13,673,361 13,368,768 Net income (loss) from continuing operations $28,876 $21,870 $(9,630) Net income from discontinued operations —1,130 10,121 Net income 28,876 23,000 491 Net income (loss) attributable to non-controlling interest, net of tax (16)184 1,652 Net income (loss) attributable to Oppenheimer Holdings Inc.$28,892 $22,816 $(1,161) Basic net income (loss) per share attributable to Oppenheimer Holdings Inc. Continuing operations $2.18 $1.65 $(0.72) Discontinued operations (2)—0.07 0.63 Net income (loss) per share $2.18 $1.72 $(0.09) Diluted net income (loss) per share attributable to Oppenheimer Holdings Inc. Continuing operations $2.05 $1.60 $(0.72) Discontinued operations (2)—0.07 0.63 Net income (loss) per share $2.05 $1.67 $(0.09) (1) For the year ended December 31, 2018, the diluted net income per share computation does not include the anti-dilutive effect of 4,050 shares of Class A Stock granted under share-based compensation arrangements (10,592 and 1,237,134 shares for the years ended December 31, 2017 and 2016, respectively). (2) Represents net income from discontinued operations less net income attributable to non-controlling interest, net of tax divided by weighted average number of shares outstanding. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 110 14. Income taxes Income taxes from continuing operations shown in the consolidated statements of operations are reconciled to amounts of tax that would have been payable (recoverable) from the application of the federal tax rate to pre-tax profit, as follows: (Expressed in thousands) For the Years Ended December 31, 2018 2017 2016 Amount Percentage Amount Percentage Amount Percentage U.S. federal statutory income tax rate $9,419 21.0%$6,907 35.0%$(7,662)35.0% U.S. state and local income taxes, net of U.S. federal income tax benefits 3,144 7.0%1,430 7.2%(1,075)4.9% Unrecognized tax benefit ——%(9)—%(603)2.8% Valuation allowance 1,833 4.1%89 0.5%1,208 -5.5% Non-taxable income (637)-1.4%(1,055)-5.3%(1,267)5.8% Provision to return adjustments (326)-0.7%(1,277)-6.5%(4,167)19.0% Impact of the TCJA ——%(9,013)-45.7%——% Change in state and foreign tax rates 267 0.6%(353)-1.8%264 -1.2% Foreign tax rate differentials 112 0.2%974 4.9%143 -0.7% Excess tax benefits from share-based awards (81)-0.2%(493)-2.5%——% Other non-deductible expenses 2,246 5.0%666 3.4%897 -4.1% Total income taxes $15,977 35.6%$(2,134)-10.8%$(12,262)56.0% Income taxes from continuing operations included in the consolidated statements of operations represent the following: (Expressed in thousands) For the Years Ended December 31, 2018 2017 2016 Current: U.S. federal tax (benefit)$10,355 $506 $(15,433) State and local tax (benefit)2,618 (1,326)(4,631) Non-U.S. operations 231 144 46 Total Current 13,204 (676)(20,018) Deferred: U.S. federal tax (benefit)395 (1,215)5,856 State and local tax 1,438 1,725 617 Non-U.S. operations 940 (1,968)1,283 Total Deferred 2,773 (1,458)7,756 Total $15,977 $(2,134)$(12,262) Loss before income taxes from continuing operations with respect to Non-U.S. operations was $4.0 million, $8.5 million and $965,000 for the years ended December 31, 2018, 2017 and 2016, respectively. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 111 The effective income tax rate from continuing operations for the year ended December 31, 2018 was 35.6% compared with 10.8% (benefit) for the year ended December 31, 2017. The effective tax rate for the year ended December 31, 2018 benefited due to the Federal tax rate of 21% (versus 35% in prior years) as a result of the enactment of the TCJA in December 2017 offset by a detriment from the establishment of a valuation allowance for the deferred tax asset related to net operating losses of the Company's operations in Europe as well as larger non-deductible expenses related to items such as entertainment, fringe benefits, regulatory fines and penalties, and limitations around the deductibility of executive compensation under the TCJA. The effective income tax rate for the year ended December 31, 2017 was positively impacted by the estimated impact of the TCJA which resulted in a net discrete after-tax benefit of $9.0 million. The net discrete after-tax benefit was comprised of a benefit of $29.0 million related to the re-measurement of deferred tax liabilities offset by a detriment of $19.6 million related to the re-measurement of deferred tax assets as well as a detriment of $0.4 million related to miscellaneous nondeductible items. Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when such differences are expected to reverse. Significant components of the Company's deferred tax assets and liabilities from continuing operations as of December 31, 2018 and 2017 were as follows: (Expressed in thousands) As of December 31, 2018 2017 Deferred tax assets: Deferred compensation $18,909 $19,105 Deferred rent and lease incentives 9,597 10,303 Net operating losses and credits 7,071 10,535 Receivable reserves 2,350 2,663 Accrued expenses 2,863 1,104 Auction rate securities reserves 1,007 540 Involuntary conversion 1,692 1,670 Depreciation 370 500 Other 1,067 1,177 Total deferred tax assets 44,926 47,597 Valuation allowance 3,204 1,350 Deferred tax assets after valuation allowance 41,722 46,247 Deferred tax liabilities: Goodwill 41,049 40,534 Partnership investments 8,227 9,184 Company-owned life insurance 6,277 7,426 Other 252 195 Total deferred tax liabilities 55,805 57,339 Deferred tax liabilities, net $(14,083)$(11,092) The Company has deferred tax assets at December 31, 2018 of $2.5 million arising from net operating losses incurred by Oppenheimer Israel (OPCO) Ltd. The Company believes that realization of the deferred tax assets is more likely than not based on expectations of future taxable income in Israel. These net operating losses carry forward indefinitely and are not subject to expiration, provided that these subsidiaries and their underlying businesses continue operating normally (as is anticipated). During the year ended December 31, 2018, the Company recorded a valuation allowance of $1.8 million against the deferred tax asset related to the net operating losses incurred by Oppenheimer Europe Ltd. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 112 Goodwill arising from the acquisitions of Josephthal Group Inc. and the Oppenheimer Divisions is being amortized for tax purposes on a straight-line basis over 15 years. The difference between book and tax is recorded as a deferred tax liability. As of December 31, 2017, the 15 year amortization period ended. The Company or one or more of its subsidiaries file income tax returns in the U.S. federal jurisdiction and in various states and foreign jurisdictions. The Company has closed tax years through 2014 in the U.S. federal jurisdiction. The Company is under examination in various states in which the Company has significant business operations. The Company has closed tax years through 2010 for New York State and is currently under exam for the 2011 to 2014 tax years. The Company also has closed tax years through 2008 with New York City and is currently under exam for the 2009 to 2012 tax years. With the exception of New York State and City, the Company is no longer subject to U.S. federal, state and local, or non- U.S. income tax examinations for years before 2015. The Company has unrecognized tax benefits of $1.1 million, $1.1 million and $1.1 million as of December 31, 2018, 2017 and 2016, respectively, from continuing operations (as shown on the table below). Included in the balance of unrecognized tax benefits as of December 31, 2018 and 2017 are $853,000 and $853,000 of tax benefits for either year that, if recognized, would affect the effective tax rate. During the year ended December 31, 2018, the Company did not record any changes in unrecognized tax benefit. The Company does not believe any unrecognized tax benefit will significantly increase or decrease within twelve months. A reconciliation of the beginning and ending amount of unrecognized tax benefit follows: (Expressed in thousands) 2018 2017 2016 Balance at beginning of year $1,079 $1,088 $2,490 Additions for tax positions of prior years ——98 Lapse in statute of limitations —(9)(652) Settlements with taxing authorities ——(848) Balance at end of year $1,079 $1,079 $1,088 In its consolidated statements of operations, the Company records interest and penalties accruing on unrecognized tax benefits in income (loss) before income taxes as interest expense and other expense, respectively. For the year ended December 31, 2018, the Company recorded tax-related interest expense of $113,000 in its consolidated statement of operations. For the year ended December 31, 2017, the Company recorded tax-related interest expense of $231,000 in its consolidated statement of operations. As of December 31, 2018 and 2017, the Company had an income tax-related interest payable of $345,000 and $232,000, respectively, on its consolidated balance sheets. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 113 15. Employee compensation plans The Company maintains various employee compensation plans for the benefits of its employees. Two types of employee compensation are granted under share-based compensation and cash-based compensation plans. Share-based Compensation Oppenheimer Holdings Inc. 2014 Incentive Plan On February 26, 2014, the Company adopted the Oppenheimer Holdings Inc. 2014 Incentive Plan (the "OIP"). Pursuant to the OIP, the Compensation Committee of the Board of Directors of the Company (the "Committee") is permitted to grant options to purchase Class A Stock ("stock options"), Class A Stock awards and restricted Class A Stock (collectively "restricted stock awards") to or for the benefit of employees and non-employee directors of the Company and its subsidiaries as part of their compensation. Stock options are generally granted for five-year term and generally vest at the rate of 25% of the amount granted on the second anniversary of the grant, 25% on the third anniversary of the grant, 25% on the fourth anniversary of the grant and 25% six months before expiration. Restricted stock awards are generally awarded for a three or five year term and fully vest at the end of the term. Oppenheimer Holdings Inc. Stock Appreciation Right Plan Under the Oppenheimer Holdings Inc. Stock Appreciation Right Plan, the Company awards stock appreciation rights ("OARs") to certain employees as part of their compensation package based on a formula reflecting gross production and length of service. These awards are granted once per year in January with respect to the prior year's production. The OARs vest five years from grant date and settle in cash at vesting. Restricted stock - The Company has granted restricted stock awards pursuant to the OIP. The following table summarizes the status of the Company's non-vested restricted Class A Stock awards under the OIP for the year ended December 31, 2018: Number of Class A Shares Subject to Restricted Stock Awards Weighted Average Fair Value Remaining Contractual Life Nonvested at beginning of year 1,067,296 $16.34 2.2 Years Granted 333,959 25.96 3.0 Years Vested (39,465)19.54 — Forfeited (72,566)16.54 — Nonvested at end of year 1,289,224 $18.72 1.8 Years As of December 31, 2018, all outstanding restricted Class A Stock awards were non-vested. The aggregate intrinsic value of restricted Class A Stock awards outstanding as of December 31, 2018 was $32.9 million. During the year ended December 31, 2018, the Company included $6.0 million ($5.6 million in 2017 and $5.2 million in 2016) of compensation expense in its consolidated statement of operations relating to restricted Class A Stock awards. As of December 31, 2018, there was $11.2 million of total unrecognized compensation cost related to unvested restricted Class A Stock awards. The cost is expected to be recognized over a weighted average period of 1.8 years. As of December 31, 2018, the number of shares of Class A Stock available under the share-based compensation plans, but not yet awarded, was 811,937. On January 31, 2019, the Company awarded a total of 359,208 restricted shares of Class A Stock to current employees pursuant to the OIP. Of these restricted shares, 153,818 shares will cliff vest in three years and 205,390 shares will cliff vest in five years. These awards will be expensed over the applicable three or five year vesting period. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 114 Stock options - The Company has granted stock options pursuant to the OIP. There were 15,573 and 14,499 options outstanding as of December 31, 2018 and 2017, respectively. In the year ended December 31, 2018, the Company included $26,500 ($25,700 in 2017 and $19,900 in 2016) of compensation expense in its consolidated statement of operations relating to the expensing of stock options. On January 31, 2019, the Company awarded a total of 3,578 options to purchase Class A Stock to current employees pursuant to the OIP. These options will be expensed over 4.5 years (the vesting period). OARs - The Company has awarded OARs pursuant to the Oppenheimer Holdings Inc. Stock Appreciation Right Plan. The following table summarizes the status of the Company's outstanding OARs awards as of December 31, 2018: Grant Date Number of OARs Outstanding Strike Price Remaining Contractual Life Fair Value as of December 31, 2018 January 14, 2014 378,460 $23.48 13 Days $2.11 January 9, 2015 428,920 21.94 1 Year 4.87 January 6, 2016 425,900 15.89 2 Years 9.90 January 6, 2017 409,660 18.90 3 Years 8.32 January 5, 2018 482,720 27.05 4 Years 5.96 2,125,660 Total weighted average values $21.58 2.1 Years $6.30 The fair value as of December 31, 2018 for each of the OARs was estimated using the Black-Scholes model with the following assumptions: Grant Date January 14, 2014 January 9, 2015 January 6, 2016 January 6, 2017 January 5, 2018 Expected term (1)13 Days 1 Year 2 Years 3 Years 4 Years Expected volatility factor (2)28.2%27.6%26.7%29.0%33.0% Risk-free interest rate (3)1.2%2.6%2.5%2.5%2.5% Actual dividends (4)$0.44 $0.44 $0.44 $0.44 $0.44 (1) The expected term was determined based on the remaining life of the actual awards. (2) The volatility factor was measured using the weighted average of historical daily price changes of the Company's Class A Stock over a historical period commensurate to the expected term of the awards. (3) The risk-free interest rate was based on periods equal to the expected term of the awards based on the U.S. Treasury yield curve in effect at December 31, 2018. (4) Actual dividends were used to compute the expected annual dividend yield. As of December 31, 2018, 2,125,660 of outstanding OARs were unvested and nil were vested. As of December 31, 2018, the aggregate intrinsic value of OARs outstanding was $9.2 million. In the year ended December 31, 2018, the Company included $650,000 ($6.9 million in 2017 and $1.0 million in 2016) in compensation expense in its consolidated statement of operations relating to OARs awards. The liability related to the OARs was $6.9 million as of December 31, 2018. As of December 31, 2018, there was $6.5 million of total unrecognized compensation cost related to unvested OARs. The cost is expected to be recognized over a weighted average period of 2.1 years. On January 11, 2019, 560,156 OARs were awarded to Oppenheimer employees related to fiscal 2018 performance. These OARs will be expensed over 5 years (the vesting period). Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 115 Cash-based Compensation Plan Defined Contribution Plan The Company, through its subsidiaries, maintains a defined contribution plan covering substantially all full-time U.S. employees. The Oppenheimer & Co. Inc. 401(k) Plan provides that Oppenheimer may make discretionary contributions. Eligible Oppenheimer employees could make voluntary contributions which could not exceed $18,500, 18,000 and 18,000 per annum in 2018, 2017 and 2016, respectively. The Company made contributions to the 401(k) Plan of $1.8 million, $1.5 million and $1.3 million in 2018, 2017 and 2016, respectively. Deferred Compensation Plans The Company maintains an Executive Deferred Compensation Plan ("EDCP") and a Deferred Incentive Plan ("DIP") in order to offer certain qualified high-performing financial advisers a bonus based upon a formula reflecting years of service, production, net commissions and a valuation of their clients' assets. The bonus amounts resulted in deferrals in fiscal 2018 of $9.4 million ($8.2 million in 2017 and $7.7 million in 2016). These deferrals normally vest after five years. The liability is being recognized on a straight-line basis over the vesting period. The EDCP also includes voluntary deferrals by senior executives that are not subject to vesting. The Company maintains a Company-owned life insurance policy, which is designed to offset approximately 60% of the EDCP liability. The EDCP liability is being tracked against the value of a benchmark investment portfolio held for this purpose. As of December 31, 2018, the Company's liability with respect to the EDCP and DIP totaled $46.5 million and is included in accrued compensation on the consolidated balance sheet as of December 31, 2018. In addition, the Company is maintaining a deferred compensation plan on behalf of certain employees who were formerly employed by CIBC World Markets. The liability is being tracked against the value of an investment portfolio held by the Company for this purpose and, therefore, the liability fluctuates with the fair value of the underlying portfolio. As of December 31, 2018, the Company's liability with respect to this plan totaled $15.6 million. The total amount expensed in 2018 for the Company's deferred compensation plans was $6.1 million ($17.1 million in 2017 and $11.8 million in 2016). 16. Commitments and contingencies Commitments The Company and its subsidiaries have operating leases for office space, equipment and furniture and fixtures expiring at various dates through 2034. Future minimum rental commitments under such office and equipment leases as of December 31, 2018 are as follows: (Expressed in thousands) 2019 $39,684 2020 36,851 2021 32,858 2022 29,604 2023 27,356 2024 and thereafter 114,256 $280,609 The above table includes operating leases which have been signed by the Company's subsidiary, Viner Finance Inc., in which the Company is responsible for rent charges associated with its occupancy. Certain of the leases contain provisions for rent increases based on changes in costs incurred by the lessor. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 116 The Company's rent expense for the year ended December 31, 2018 was $44.7 million ($45.6 million in 2017 and $44.4 million in 2016). As of December 31, 2018, the Company had capital commitments of $1.4 million with respect to unfunded obligations in private equity funds sponsored by the Company. As of December 31, 2018, the Company had no collateralized or uncollateralized letters of credit outstanding. Contingencies Many aspects of the Company's business involve substantial risks of liability. In the normal course of business, the Company has been named as defendant or co-defendant in various legal actions, including arbitrations, class actions and other litigation, creating substantial exposure and periodic expenses. Certain of the actual or threatened legal matters include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. These proceedings arise primarily from securities brokerage, asset management and investment banking activities. The Company is also involved, from time to time, in other reviews, investigations and proceedings (both formal and informal) by governmental and self-regulatory agencies regarding the Company's business, which may result in expenses, adverse judgments, settlements, fines, penalties, injunctions or other relief. The investigations include inquiries from the Securities and Exchange Commission (the "SEC"), the Financial Industry Regulatory Authority ("FINRA") and various state regulators. The Company accrues for estimated loss contingencies related to legal and regulatory matters when available information indicates that it is probable a liability had been incurred and the Company can reasonably estimate the amount of that loss. In many proceedings, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount of any loss. 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. 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. Counsel may be required to review, analyze and resolve numerous issues, including through potentially lengthy discovery and determination of important factual matters, and by addressing novel or unsettled legal questions relevant to the proceedings in question, before the Company can reasonably estimate a loss or range of loss or additional loss for the proceeding. Even after lengthy review and analysis, the Company, in many legal and regulatory proceedings, may not be able to reasonably estimate possible losses or range of loss. For certain other legal and regulatory proceedings, the Company can estimate possible losses, or range of loss in excess of amounts accrued, but does not believe, based on current knowledge and after consultation with counsel, that such losses individually, or in the aggregate, will have a material adverse effect on the Company's consolidated financial statements as a whole. 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 $0 to $30.0 million. This estimated aggregate range is based upon currently available information for those legal proceedings in which the Company is involved, where the Company can make an estimate for such losses. For certain cases, the Company does not believe that it can make an estimate. The foregoing aggregate estimate is based on various factors, including the varying stages of the proceedings (including the fact that many are currently in preliminary stages), the numerous yet-unresolved issues in many of the proceedings and the attendant uncertainty of the various potential outcomes of such proceedings. Accordingly, the Company's estimate will change from time to time, and actual losses may be more than the current estimate. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 117 In February 2010, Oppenheimer finalized settlements with the Regulators concluding investigations and administrative proceedings by the Regulators concerning Oppenheimer's marketing and sale of ARS. Pursuant to the settlements with the Regulators, Oppenheimer agreed to extend offers to repurchase ARS from certain of its clients subject to certain terms and conditions more fully described below. As of December 31, 2018, the Company had no outstanding ARS purchase commitments related to the settlements with the Regulators. In addition to the settlements with the Regulators, Oppenheimer has also reached settlements of and received adverse awards in legal proceedings with various clients where the Company is obligated to purchase ARS. Pursuant to completed Purchase Offers (as defined) under the settlements with the Regulators and client related legal settlements and awards to purchase ARS, as of December 31, 2018, the Company purchased and holds (net of redemptions) approximately $40.7 million in ARS from its clients. In addition, the Company is committed to purchase another $7.3 million in ARS from clients through 2020 under legal settlements and awards. The Company's purchases of ARS from its clients holding ARS eligible for repurchase will, subject to the terms and conditions of the settlements with the Regulators, continue on a periodic basis. Pursuant to these terms and conditions, the Company is required to conduct a financial review every six months, until the Company has extended Purchase Offers to all Eligible Investors (as defined), to determine whether it has funds available, after giving effect to the financial and regulatory capital constraints applicable to the Company, to extend additional Purchase Offers. There are no predetermined quantitative thresholds or formulas used for determining the final agreed upon amount for the Purchase Offers. Upon completion of the financial review, the Company first meets with its primary regulator, FINRA, and then with representatives of the NYAG and other regulators to present the results of the review and to finalize the amount of the next Purchase Offer and discuss offer scenarios in terms of which Eligible Investors should receive a Purchase Offer. Once various Purchase Offer scenarios have been discussed, the regulators, not the Company, make the final determination of which Purchase Offer scenario to implement. The terms of the settlements provide that the amount of ARS to be purchased during any period shall not risk placing the Company in violation of regulatory requirements. Eligible Investors for future buybacks continued to hold approximately $7.5 million of ARS principal value as of December 31, 2018. It is reasonably possible that some ARS Purchase Offers will need to be extended to Eligible Investors holding ARS prior to redemptions (or tender offers) by issuers of the full amount that remains outstanding. The potential additional losses that may result from entering into ARS purchase commitments with Eligible Investors for future buybacks represent the estimated difference between the principal value and the fair value. It is possible that the Company could sustain a loss of all or substantially all of the principal value of ARS still held by Eligible Investors but such an outcome is highly unlikely. The amount of potential additional losses resulting from entering into these commitments cannot be reasonably estimated due to the uncertainties surrounding the amounts and timing of future buybacks that result from the six-month financial review and the amounts, scope, and timing of future issuer redemptions and tender offers of ARS held by Eligible Investors. The range of potential additional losses related to valuation adjustments is between $0 and the amount of the estimated differential between the principal value and the fair value of ARS held by Eligible Investors for future buybacks that were not yet purchased or committed to be purchased by the Company at any point in time. The range of potential additional losses described here is not included in the estimated range of aggregate loss in excess of amounts accrued for legal and regulatory proceedings described above. Outside of the settlements with the Regulators, the Company has also reached various legal settlements with clients. As of December 31, 2018, there were no ARS purchase commitments related to legal settlements extending past 2020. Since August 2014, Oppenheimer has been responding to information requests from the SEC regarding the supervision of one of its former financial advisers who was indicted by the United States Attorney's Office for the District of New Jersey in March 2014 on allegations of insider trading. Oppenheimer is continuing to cooperate with the SEC inquiry. Since September 2016, Oppenheimer has been responding to information requests from FINRA (including from FINRA's Enforcement Department) regarding the supervision of Oppenheimer's sale of unit investment trusts from 2011 to 2015. The inquiry is part of a larger targeted examination or "sweep" examination involving many other brokerage firms. Oppenheimer is continuing to cooperate with the FINRA inquiry. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 118 On February 12, 2018, the SEC Division of Enforcement ("Enforcement Division") announced the Share Class Selection Disclosure Initiative ("SCSD Initiative") pursuant to which investment advisers were encouraged to self-report possible securities laws violations relating to the failure to make certain disclosures concerning mutual fund share class selection. On June 11, 2018, Oppenheimer and OAM notified the Enforcement Division that it intended to participate in the SCSD Initiative. Oppenheimer and OAM filed the information required by the SCSD Initiative on September 19, 2018. On February 7, 2019, Oppenheimer (and its affiliate Oppenheimer Asset Management, collectively “Oppenheimer”) filed an Offer of Settlement with the SEC (the “Offer”) pursuant to which Oppenheimer offered to disgorge approximately $3.5 million (the “Disgorgement Amount”) (including pre-judgment interest) of 12b-1 fees and agree to certain undertakings including the following: (i) within 30 days of the entry of an SEC Order, review and correct as necessary all relevant disclosure documents concerning mutual fund share class selection and 12b-1 fees; (ii) within 30 days of the entry of an SEC Order, evaluate whether existing clients should be moved to a lower-cost share class and move clients as necessary; (iii) within 30 days of the entry of an SEC Order, evaluate, update (if necessary), and review for the effectiveness of their implementation, Oppenheimer ’s policies and procedures so that they are reasonably designed to prevent violations of the Investment Advisers Act in connection with disclosures regarding mutual fund share class selection; (iv) within 30 days of the entry of an SEC Order, notify affected investors (i.e., those former and current clients who, during the relevant period of inadequate disclosure, purchased or held 12b-1 fee paying share class mutual funds when a lower-cost share class of the same fund was available to the client) of the settlement terms of the Order in a clear and conspicuous fashion; and (v) within 40 days of the entry of an SEC Order, certify, in writing, compliance with the undertaking(s) set forth above. Oppenheimer is awaiting the entry of an SEC Order consistent with the above. 17. Regulatory requirements The Company's U.S. broker dealer subsidiaries, Oppenheimer and Freedom, are subject to the uniform net capital requirements of the SEC under Rule 15c3-1 (the "Rule") promulgated under the Securities Exchange Act of 1934. Oppenheimer computes its net capital requirements under the alternative method provided for in the Rule which requires that Oppenheimer maintain net capital equal to two percent of aggregate customer-related debit items, as defined in SEC Rule 15c3-3. As of December 31, 2018, the net capital of Oppenheimer as calculated under the Rule was $194.5 million or 20.86% of Oppenheimer's aggregate debit items. This was $175.8 million in excess of the minimum required net capital at that date. Freedom computes its net capital requirement under the basic method provided for in the Rule, which requires that Freedom maintain net capital equal to the greater of $100,000 or 6-2/3% of aggregate indebtedness, as defined. As of December 31, 2018, Freedom had net capital of $5.3 million, which was $5.2 million in excess of the $100,000 required to be maintained at that date. As of December 31, 2018, the capital required and held under the Capital Requirements Directive ("CRD IV") for Oppenheimer Europe Ltd. was as follows: • Common Equity Tier 1 ratio 13.37% (required 4.5%); • Tier 1 Capital ratio 13.37% (required 6.0%); and • Total Capital ratio 13.65% (required 8.0%). In December 2017, Oppenheimer Europe Ltd. received approval from the Financial Conduct Authority ("FCA") for a variation of permission to remove the limitation of "matched principal business" from the firm's scope of permitted businesses and become a "Full-Scope Prudential Sourcebook for Investment Firms (IFPRU) €730K" firm which was effective January 2018. In addition to the capital requirement under CRV IV above, Oppenheimer Europe Ltd. is required to maintain a minimum capital of EUR 730,000. As of December 31, 2018, Oppenheimer Europe Ltd. is in compliance with its regulatory requirements. As of December 31, 2018, the regulatory capital of Oppenheimer Investments Asia Limited was $1.5 million, which was $1.1 million in excess of the $383,000 required to be maintained on that date. Oppenheimer Investments Asia Limited computes its regulatory capital pursuant to the requirements of the Securities and Futures Commission of Hong Kong. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 119 18. Goodwill and intangibles Goodwill The Company's goodwill of $137.9 million resides in its PCD reporting unit. The Company performed its annual test for goodwill impairment as of December 31, 2018 and 2017, which did not result in any impairment charges for either period. At each annual goodwill impairment testing date, the PCD reporting unit had a fair value that was substantially in excess of its carrying value. Intangible Assets Indefinite intangible assets are comprised of trademarks, trade names and an Internet domain name. These intangible assets carried at $32.1 million, which are not amortized, are subject to at least an annual test for impairment to determine if the estimated fair value is less than their carrying amount. Trademarks and trade names recorded as of December 31, 2018 and 2017 have been tested for impairment and it has been determined that no impairment has occurred. At each annual intangible assets impairment testing date, the trademarks and trade names had a fair value that was substantially in excess of its carrying value. 19. Segment information The Company has determined its reportable segments based on the Company's method of internal reporting, which disaggregates its retail business by branch and its proprietary and investment banking businesses by product. The Company evaluates the performance of its segments and allocates resources to them based upon profitability. The Company's reportable segments are: Private Client — includes commissions and a proportionate amount of fee income earned on assets under management ("AUM"), net interest earnings on client margin loans and cash balances, fees from money market funds, custodian fees, net contributions from stock loan activities and financing activities, and direct expenses associated with this segment; Asset Management — includes a proportionate amount of fee income earned on AUM from investment management services of Oppenheimer Asset Management Inc. Oppenheimer's asset management divisions employ various programs to manage client assets either in individual accounts or in funds, and includes direct expenses associated with this segment; and Capital Markets — includes investment banking, institutional equities sales, trading, and research, taxable fixed income sales, trading, and research, public finance and municipal trading, as well as the Company's operations in the United Kingdom, Hong Kong and Israel, and direct expenses associated with this segment. The Company does not allocate costs associated with certain infrastructure support groups that are centrally managed for its reportable segments. These areas include, but are not limited to, legal, compliance, operations, accounting, and internal audit. Costs associated with these groups are separately reported in a Corporate/Other category and primarily include compensation and benefits. The Commercial Mortgage Banking segment was discontinued during the second quarter of 2016. See note 3 for further details. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 120 The table below presents information about the reported revenue and income (loss) before income taxes from continuing operations of the Company for the years ended December 31, 2018, 2017 and 2016. Asset information by reportable segment is not reported, since the Company does not produce such information for internal use by the chief operating decision maker. (Expressed in thousands) For the Year Ended December 31, 2018 2017 2016 Revenue Private client (1)$617,871 $592,753 $504,192 Asset management (1)71,696 89,896 92,852 Capital markets 272,719 231,632 254,933 Corporate/Other (4,132)6,057 5,802 Total $958,154 $920,338 $857,779 Income (loss) before income taxes Private client (1)$149,097 $128,840 $66,072 Asset management (1)18,590 26,685 31,412 Capital markets (13,416)(39,978)(17,713) Corporate/Other (109,418)(95,811)(101,663) Total $44,853 $19,736 $(21,892) (1) Clients investing in the OAM advisory program are charged fees based on the value of AUM. Advisory fees were allocated 22.5% to the Asset Management and 77.5% to the Private Client segments. Starting January 1, 2017, the Company determined it was appropriate to change the allocation to 10.0% to the Asset Management and 90.0% to the Private Client segments due to changes in the mix of the business over time and costs associated with it. Revenue, classified by the major geographic areas in which it was earned for the years ended December 31, 2018, 2017 and 2016 was as follows: (Expressed in thousands) Year Ended December 31, 2018 2017 2016 Americas $925,127 $880,602 $815,231 Europe/Middle East 29,292 36,364 39,048 Asia 3,735 3,372 3,500 Total $958,154 $920,338 $857,779 20. Subsequent events On February 1, 2019, the Company announced a quarterly dividend in the amount of $0.11 per share, payable on February 28, 2019 to holders of Class A Stock and Class B Stock of record on February 15, 2019. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 121 21. Quarterly information (unaudited) (Expressed in thousands, except per share amounts) Fiscal Quarters For the Year Ended December 31, 2018 Fourth Third Second First Year Revenue $243,254 $237,814 $242,556 $234,530 $958,154 Expenses 227,671 230,670 230,055 224,905 913,301 Income before income taxes from continuing operations 15,583 7,144 12,501 9,625 44,853 Income taxes 7,316 2,083 3,662 2,916 15,977 Net income from continuing operations 8,267 5,061 8,839 6,709 28,876 Net income from discontinued operations ————— Net income 8,267 5,061 8,839 6,709 28,876 Less net income (loss) attributable to non-controlling interest, net of tax 6 (10)(16)4 (16) Net income attributable to Oppenheimer Holdings Inc.$8,261 $5,071 $8,855 $6,705 $28,892 Basic net income per share attributable to Oppenheimer Holdings Inc. Continuing operations $0.62 $0.38 $0.67 $0.51 $2.18 Discontinued operations ————— Net income per share $0.62 $0.38 $0.67 $0.51 $2.18 Diluted net income per share attributable to Oppenheimer Holdings Inc. Continuing operations $0.59 $0.36 $0.63 $0.48 $2.05 Discontinued operations ————— Net income per share $0.59 $0.36 $0.63 $0.48 $2.05 Dividends per share $0.11 $0.11 $0.11 $0.11 $0.44 Market price of Class A Stock (1) High $33.76 $34.15 $29.80 $29.00 $34.15 Low $23.52 $27.40 $24.60 $25.25 $23.52 (1) The price quotations above were obtained from the New York Stock Exchange website. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 122 (Expressed in thousands, except per share amounts) Fiscal Quarters For the Year Ended December 31, 2017 Fourth Third Second First Year Revenue $264,973 $226,220 $215,884 $213,261 $920,338 Expenses 248,403 214,392 217,521 220,286 900,602 Income (Loss) before income taxes from continuing operations 16,570 11,828 (1,637)(7,025)19,736 Income taxes (4,598)4,425 (274)(1,687)(2,134) Net income (loss) from continuing operations 21,168 7,403 (1,363)(5,338)21,870 Net income (loss) from discontinued operations 29 461 53 587 1,130 Net income (loss)21,197 7,864 (1,310)(4,751)23,000 Less net income attributable to non-controlling interest, net of tax 4 75 9 96 184 Net income (loss) attributable to Oppenheimer Holdings Inc.$21,193 $7,789 $(1,319)$(4,847)$22,816 Basic net income (loss) per share attributable to Oppenheimer Holdings Inc. Continuing operations $1.61 $0.56 $(0.10)$(0.40)$1.65 Discontinued operations —0.03 —0.04 0.07 Net income (loss) per share $1.61 $0.59 $(0.10)$(0.36)$1.72 Diluted net income (loss) per share attributable to Oppenheimer Holdings Inc. Continuing operations $1.54 $0.54 $(0.10)$(0.40)$1.60 Discontinued operations —0.03 —0.04 0.07 Net income (loss) per share $1.54 $0.57 $(0.10)$(0.36)$1.67 Dividends per share $0.11 $0.11 $0.11 $0.11 $0.44 Market price of Class A Stock (1) High $29.00 $17.70 $18.25 $19.60 $29.00 Low $17.35 $15.40 $15.10 $15.90 $15.10 (1) The price quotations above were obtained from the New York Stock Exchange website. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 123 22. Condensed consolidating financial information On June 23, 2017, the Parent issued in a private offering $200.0 million aggregate principal amount of the Notes. The Company used a portion of the net proceeds from the offering of the Unregistered Notes to redeem in full its Old Notes. See note 11 for further details. The Notes are jointly and severally and fully and unconditionally guaranteed on a senior basis by E.A. Viner International Co. and Viner Finance Inc. (together, the "Guarantors"), unless released as described below. Each of the Guarantors is 100% owned by the Parent. The indenture for the Notes contains covenants with restrictions which are discussed in note 10. The following condensed consolidating financial information presents the financial position, results of operations and cash flows of the Parent, the Guarantor subsidiaries, the Non-Guarantor subsidiaries and elimination entries necessary to consolidate the Company. Each Guarantor will be automatically and unconditionally released and discharged upon: the sale, exchange or transfer of the capital stock of a Guarantor and the Guarantor ceasing to be a direct or indirect subsidiary of the Parent if such sale does not constitute an asset sale under the indenture for the Notes or does not constitute an asset sale effected in compliance with the asset sale and merger covenants of the indenture for the Notes; a Guarantor being dissolved or liquidated; a Guarantor being designated unrestricted in compliance with the applicable provisions of the Notes; or the exercise by the Parent of its legal defeasance option or covenant defeasance option or the discharge of the Parent's obligations under the indenture for the Notes in accordance with the terms of such indenture. Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 124 OPPENHEIMER HOLDINGS INC. CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2018 (Expressed in thousands)Parent Guarantor subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $53,526 $3,826 $33,323 $—$90,675 Deposits with clearing organizations ——67,678 —67,678 Receivable from brokers, dealers and clearing organizations ——166,493 —166,493 Receivable from customers, net of allowance for credit losses of $886 ——720,777 —720,777 Income tax receivable 45,733 23,491 (702)(67,508)1,014 Securities purchased under agreements to resell ——290 —290 Securities owned, including amounts pledged of $517,951, at fair value —1,358 836,226 —837,584 Notes receivable, net of accumulated amortization and allowance for uncollectibles of $25,109 and $6,800, respectively ——44,058 —44,058 Furniture, equipment and leasehold improvements, net of accumulated depreciation of $89,182 —20,722 8,266 —28,988 Subordinated loan receivable —112,558 —(112,558)— Intangible assets —400 31,700 —32,100 Goodwill ——137,889 137,889 Other assets 135 2,581 110,052 —112,768 Deferred tax assets 1 455 18,494 (18,950)— Investment in subsidiaries 661,837 546,704 —(1,208,541)— Intercompany receivables (14,211)46,840 (6,299)(26,330)— Total assets $747,021 $758,935 $2,168,245 $(1,433,887)$2,240,314 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Drafts payable $—$—$16,348 $—$16,348 Bank call loans ——15,000 —15,000 Payable to brokers, dealers and clearing organizations ——289,207 —289,207 Payable to customers ——336,616 —336,616 Securities sold under agreements to repurchase ——484,218 —484,218 Securities sold but not yet purchased, at fair value ——85,446 —85,446 Accrued compensation ——167,348 —167,348 Accounts payable and other liabilities 163 31,653 55,823 (9)87,630 Income tax payable 2,440 22,189 42,878 (67,507)— Senior secured notes, net of debt issuance cost of $904 199,096 ———199,096 Subordinated indebtedness ——112,558 (112,558)— Deferred tax liabilities ——33,029 (18,946)14,083 Intercompany payables —26,334 —(26,334)— Total liabilities 201,699 80,176 1,638,471 (225,354)1,694,992 Stockholders' equity Stockholders' equity attributable to Oppenheimer Holdings Inc.545,322 678,759 529,774 (1,208,533)545,322 Total stockholders' equity 545,322 678,759 529,774 (1,208,533)545,322 Total liabilities and stockholders' equity $747,021 $758,935 $2,168,245 $(1,433,887)$2,240,314 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 125 OPPENHEIMER HOLDINGS INC. CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2017 (Expressed in thousands)Parent Guarantor subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $7,442 $3,716 $36,996 $—$48,154 Deposits with clearing organizations ——42,222 —42,222 Receivable from brokers, dealers and clearing organizations ——187,115 —187,115 Receivable from customers, net of allowance for credit losses of $769 ——848,226 —848,226 Income tax receivable 45,998 26,025 —(69,084)2,939 Securities purchased under agreements to resell ——658 —658 Securities owned, including amounts pledged of $655,683 at fair value —1,386 925,211 —926,597 Notes receivable, net of accumulated amortization and allowance for uncollectibles of $24,705 and $7,975, respectively ——40,520 —40,520 Furniture, equipment and leasehold improvements, net of accumulated depreciation of $82,826 —20,221 6,966 —27,187 Subordinated loan receivable —112,558 —(112,558)— Intangible assets ——31,700 —31,700 Goodwill ——137,889 —137,889 Other assets 133 2,573 142,604 —145,310 Deferred tax assets 3,502 —18,463 (21,965)— Investment in subsidiaries 622,824 507,747 —(1,130,571)— Intercompany receivables 52,149 83,437 —(135,586)— Total assets $732,048 $757,663 $2,418,570 $(1,469,764)$2,438,517 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Drafts payable $—$—$42,412 $—$42,412 Bank call loans ——118,300 —118,300 Payable to brokers, dealers and clearing organizations ——211,483 —211,483 Payable to customers ——385,907 —385,907 Securities sold under agreements to repurchase ——586,478 —586,478 Securities sold but not yet purchased, at fair value ——94,486 —94,486 Accrued compensation ——173,116 —173,116 Accounts payable and other liabilities 7,221 33,994 51,280 —92,495 Income tax payable 2,440 22,189 44,455 (69,084)— Senior secured notes, net of debt issuance costs of $1,163 198,837 ———198,837 Subordinated indebtedness ——112,558 (112,558)— Deferred tax liabilities —17 33,040 (21,965)11,092 Intercompany payables —62,163 73,423 (135,586)— Total liabilities 208,498 118,363 1,926,938 (339,193)1,914,606 Stockholders' equity Stockholders' equity attributable to Oppenheimer Holdings Inc.523,550 639,300 491,271 (1,130,571)523,550 Non-controlling interest ——361 —361 Total stockholders' equity 523,550 639,300 491,632 (1,130,571)523,911 Total liabilities and stockholders' equity $732,048 $757,663 $2,418,570 $(1,469,764)$2,438,517 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 126 OPPENHEIMER HOLDINGS INC. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2018 (Expressed in thousands)Parent Guarantor subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated REVENUES Commissions $—$—$329,668 $—$329,668 Advisory fees —1,938 316,829 (4,418)314,349 Investment banking ——115,353 —115,353 Bank deposit sweep income ——116,052 —116,052 Interest 66 8,247 52,481 (8,310)52,484 Principal transactions, net ——14,515 (54)14,461 Other —443 15,782 (438)15,787 Total revenue 66 10,628 960,680 (13,220)958,154 EXPENSES Compensation and related expenses 1,548 —605,644 —607,192 Communications and technology 163 —74,316 —74,479 Occupancy and equipment costs ——61,610 (439)61,171 Clearing and exchange fees ——22,985 —22,985 Interest 13,500 —41,205 (8,309)46,396 Other 1,208 4,059 100,229 (4,418)101,078 Total expenses 16,419 4,059 905,989 (13,166)913,301 Income (loss) before income taxes (16,353)6,569 54,691 —44,853 Income taxes expenses (benefits)(4,371)2,052 18,296 —15,977 Net income (loss) from continuing operations (11,982)4,517 36,395 —28,876 Equity in earnings of subsidiaries 40,874 36,411 —(77,285)— Net income 28,892 40,928 36,395 (77,285)28,876 Less net income attributable to non-controlling interest, net of tax ——(16)—(16) Net income attributable to Oppenheimer Holdings Inc.28,892 40,928 36,411 (77,285)28,892 Other comprehensive income ——(1,417)—(1,417) Total comprehensive income $28,892 $40,928 $34,994 $(77,285)$27,475 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 127 OPPENHEIMER HOLDINGS INC. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2017 (Expressed in thousands)Parent Guarantor subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated REVENUES Commissions $—$—$336,620 $—$336,620 Advisory fees —1,752 323,114 (4,120)320,746 Investment banking ——81,215 (3,000)78,215 Bank deposit sweep income ——76,839 —76,839 Interest —9,589 48,548 (9,639)48,498 Principal transactions, net —17 23,256 —23,273 Other 22 361 36,123 (359)36,147 Total revenue 22 11,719 925,715 (17,118)920,338 EXPENSES Compensation and related expenses 1,237 —600,901 —602,138 Communications and technology 160 —71,818 —71,978 Occupancy and equipment costs ——61,523 (359)61,164 Clearing and exchange fees ——23,545 —23,545 Interest 13,740 —24,253 (9,639)28,354 Other 4,969 1,382 114,192 (7,120)113,423 Total expenses 20,106 1,382 896,232 (17,118)900,602 Income (loss) before income taxes (20,084)10,337 29,483 —19,736 Income taxes expenses (benefits)(7,110)(12,655)17,631 —(2,134) Net income (loss) from continuing operations (12,974)22,992 11,852 —21,870 Discontinued operations Income from discontinued operations ——2,071 —2,071 Income taxes ——941 —941 Net income from discontinued operations ——1,130 —1,130 Equity in earnings of subsidiaries 35,790 12,798 —(48,588)— Net income 22,816 35,790 12,982 (48,588)23,000 Less net income attributable to non-controlling interest, net of tax ——184 —184 Net income attributable to Oppenheimer Holdings Inc.22,816 35,790 12,798 (48,588)22,816 Other comprehensive income ——2,263 —2,263 Total comprehensive income $22,816 $35,790 $15,061 $(48,588)$25,079 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 128 OPPENHEIMER HOLDINGS INC. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2016 (Expressed in thousands)Parent Guarantor subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated REVENUES Commissions $—$—$377,317 $—$377,317 Advisory fees —1,571 271,763 (4,215)269,119 Investment banking ——81,011 —81,011 Bank deposit sweep income ——36,316 —36,316 Interest —10,242 47,804 (10,397)47,649 Principal transactions, net —16 20,465 —20,481 Other —326 25,885 (325)25,886 Total revenue —12,155 860,561 (14,937)857,779 EXPENSES Compensation and related expenses 1,241 —583,469 —584,710 Communications and technology 124 —70,266 —70,390 Occupancy and equipment costs ——61,116 (325)60,791 Clearing and exchange fees ——25,126 —25,126 Interest 13,125 —16,709 (10,397)19,437 Other 1,887 1,284 120,261 (4,215)119,217 Total expenses 16,377 1,284 876,947 (14,937)879,671 Income (loss) before income taxes (16,377)10,871 (16,386)—(21,892) Income taxes expenses (benefits)(8,296)3,325 (7,291)—(12,262) Net income (loss) from continuing operations (8,081)7,546 (9,095)—(9,630) Discontinued operations Income from discontinued operations ——17,339 —17,339 Income taxes ——7,218 —7,218 Net income from discontinued operations ——10,121 —10,121 Equity in earnings of subsidiaries 6,920 (626)—(6,294)— Net income (loss)(1,161)6,920 1,026 (6,294)491 Less net income attributable to non-controlling interest, net of tax ——1,652 —1,652 Net income (loss) attributable to Oppenheimer Holdings Inc.(1,161)6,920 (626)(6,294)(1,161) Other comprehensive income ——220 —220 Total comprehensive income (loss)$(1,161)$6,920 $(406)$(6,294)$(941) Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 129 OPPENHEIMER HOLDINGS INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2018 (Expressed in thousands)Parent Guarantor subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Cash flows from operating activities: Cash provided by (used in) operating activities $60,270 $510 $107,790 $168,570 Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements ——(8,672)—(8,672) Purchase of intangible assets —(400)——(400) Proceeds from the settlement of Company-owned life insurance 881 881 Cash used in investing activities —(400)(7,791)—(8,191) Cash flows from financing activities: Cash dividends paid on Class A non-voting and Class B voting common stock (5,833)———(5,833) Cash dividends paid to non-controlling interest ——(372)—(372) Issuance of Class A non-voting common stock 70 ———70 Repurchase of Class A non-voting common stock for cancellation (5,894)———(5,894) Payments of employee taxes withheld related to vested share- based awards (2,529)———(2,529) Decrease in bank call loans, net ——(103,300)—(103,300) Cash used in financing activities (14,186)—(103,672)—(117,858) Net increase (decrease) in cash and cash equivalents 46,084 110 (3,673)—42,521 Cash and cash equivalents, beginning of the year 7,442 3,716 36,996 —48,154 Cash and cash equivalents, end of the year $53,526 $3,826 $33,323 $—$90,675 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 130 OPPENHEIMER HOLDINGS INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2017 (Expressed in thousands)Parent Guarantor subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Cash flows from operating activities: Cash provided by (used in) operating activities $(25,979)$(6,568)$16,411 $—$(16,136) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements ——(5,611)—(5,611) Proceeds from the settlement of Company-owned life insurance ——1,744 —1,744 Cash used in investing activities ——(3,867)—(3,867) Cash flows from financing activities: Cash dividends paid on Class A non-voting and Class B voting common stock (5,836)———(5,836) Cash dividends paid to non-controlling interest ——(2,448)—(2,448) Issuance of Class A non-voting common stock 26 ———26 Repurchase of Class A non-voting common stock for cancellation (7,464)———(7,464) Payments of employee taxes withheld related to vested share- based awards (2,237)———(2,237) Issuance of senior secured notes 200,000 ———200,000 Redemption of senior secured notes (150,000)———(150,000) Debt issuance costs (1,297)———(1,297) Decrease in bank call loans, net ——(27,500)—(27,500) Cash provided by (used in) financing activities 33,192 —(29,948)—3,244 Net increase (decrease) in cash and cash equivalents 7,213 (6,568)(17,404)—(16,759) Cash and cash equivalents, beginning of the year 229 10,284 54,400 —64,913 Cash and cash equivalents, end of the year $7,442 $3,716 $36,996 $—$48,154 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 131 OPPENHEIMER HOLDINGS INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2016 (Expressed in thousands)Parent Guarantor subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Cash flows from operating activities: Cash provided by (used in) operating activities $10,485 $7,698 $(85,048)$—$(66,865) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements ——(5,731)—(5,731) Proceeds from sale of assets ——45,448 —45,448 Cash provided by investing activities ——39,717 —39,717 Cash flows from financing activities: Cash dividends paid on Class A non-voting and Class B voting common stock (5,887)———(5,887) Cash dividends paid to non-controlling interest ——(5,740)—(5,740) Repurchase of Class A non-voting common stock for cancellation (3,935)———(3,935) Payments of employee taxes withheld related to vested share- based awards (1,341)———(1,341) Increase in bank call loans, net ——45,600 —45,600 Cash provided by (used in) financing activities (11,163)—39,860 —28,697 Net increase (decrease) in cash and cash equivalents (678)7,698 (5,471)—1,549 Cash and cash equivalents, beginning of the year 907 2,586 59,871 —63,364 Cash and cash equivalents, end of the year $229 $10,284 $54,400 $—$64,913 Table of Contents 132 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. Item 9A. CONTROLS AND PROCEDURES The Company carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Rule 13a–15(e) of the Exchange Act. Based on this evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by this report. Management, including the Chief Executive Officer and Chief Financial Officer, does not expect that the Company's disclosure controls and procedures or its internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision–making can be faulty and that break- downs can occur because of a simple error or omission. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based, in part, upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost–effective control system, misstatements due to error or fraud may occur and not be detected. The Company confirms that its management, including its Chief Executive Officer and its Chief Financial Officer, concluded that the Company's disclosure controls and procedures are effective to ensure that the information required to be disclosed by the Company in its reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Changes in Internal Control over Financial Reporting There have been no changes in the Company's internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting during the quarter ended December 31, 2018. Management's Report on Internal Control over Financial Reporting and the Report of Independent Registered Public Accounting Firm are set forth in Part II, Item 8 of this Annual Report on Form 10-K. Section 303A.12(a) CEO Certification The Company submitted a Section 12(a) CEO Certification to the New York Stock Exchange on June 7, 2018 with respect to fiscal 2018. Sarbanes-Oxley Act Section 302 CEO and CFO Certifications The Company submitted the CEO and CFO Certifications required under Section 302 of the Sarbanes-Oxley Act as exhibits to its Annual Report on Form 10-K for the year ended December 31, 2018. Item 9B. OTHER INFORMATION None. Table of Contents 133 PART III Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this item will be contained under the caption "Election of Directors" in our definitive Proxy Statement for the 2019 Annual Meeting of Stockholders. Information about compliance with Section 16(a) of the Securities Exchange Act of 1934 required by this form will be contained under the caption "Executive Compensation and Related Information - Section 16(a) Beneficial Ownership Reporting Compliance" in that proxy statement. That information is incorporated herein by reference. STATEMENT OF CORPORATE GOVERNACE PRACTICES, WHISTLEBLOWER POLICY AND COMMITTEE CHARTERS A copy of the Company’s Statement of Corporate Governance Practices and its Whistleblower Policy, as well as copies of the Charters of the Audit Committee, Compensation Committee, Compliance Committee and Nominating/Corporate Governance Committee, are posted on the Company’s website at www.oppenheimer.com. These documents are available at no charge and can be requested by writing to the Company at its head office or by making an email request to info@opco.com. CODE OF ETHICS The Company has adopted a Code of Conduct and Business Ethics for Directors, Officers and Employees, which can be found on its website at www.oppenheimer.com. This document is available at no charge and can be requested by writing to the Company at its head office or by making an email request to info@opco.com. Item 11. EXECUTIVE COMPENSATION The information required by this item will be contained under the caption "Executive Compensation and Related Information" in our definitive Proxy Statement for the 2019 Annual Meeting of Stockholders and is incorporated herein by reference. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this item will be contained under the caption "Executive Compensation and Related Information - Security Ownership of Certain Beneficial Owners and Management" in our definitive Proxy Statement for the 2019 Annual Meeting of Stockholders and is incorporated herein by reference. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this item will be contained under the caption "Executive Compensation and Related Information - Certain Relationships and Related Party Transactions" under the sub-heading "Indebtedness of Directors and Executive Officers under (1) Securities Purchase and (2) Other Programs" in our definitive Proxy Statement for the 2019 Annual Meeting of Stockholders and is incorporated herein by reference. Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item will be contained under the caption "Appointment of Independent Registered Public Accounting Firm – Principal Accounting Fees and Services" in our definitive Proxy Statement for the 2019 Annual Meeting of Stockholders and is incorporated herein by reference. Table of Contents 134 PART IV Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) (i) Financial Statements See Item 8 (pages 70 to 130) (ii) Financial Statement Schedules Not Applicable. (iii) Listing of Exhibits The exhibits which are filed with this Form 10-K or are incorporated herein by reference are set forth in the Exhibit Index (pages 134 to 135) (b) Exhibits See the Exhibit Index included hereinafter on pages 134 to 135 (c) Financial Statement Schedules excluded from the annual report to stockholders None Table of Contents 135 EXHIBIT INDEX Unless there is a parenthetical indicating that such document has been filed herewith, the Exhibits listed below have been heretofore filed by the Company pursuant to Section 13 or 15(d) of the Exchange Act and are hereby incorporated herein by reference to the pertinent prior filing. Number Description 3.1 Certificate of Incorporation of Oppenheimer Holdings Inc., a Delaware corporation (previously filed as an exhibit to Form 10-Q for the quarterly period ended June 30, 2009). 3.2 By-Laws of Oppenheimer Holdings Inc., a Delaware corporation (previously filed as an exhibit to Form 10-Q for the quarterly period ended June 30, 2009). 4.1 Indenture dated as of June 23, 2017 among Oppenheimer Holdings Inc., the subsidiary guarantors, The Bank of New York Mellon Trust Company, N.A., as Trustee and The Bank of New York Mellon Trust Company, as Collateral Agent (previously filed as an exhibit to Form 8-K dated June 23, 2017). 4.3 Registration Rights Agreement dated June 23, 2017 by and among Oppenheimer Holdings Inc., a Delaware corporation, E.A. Viner International Co., a Delaware corporation, Viner Finance Inc., a Delaware corporation and Oppenheimer & Co. Inc., as representative of the several Initial Purchasers (previously filed as an exhibit to Form 8-K dated June 23, 2017). 10.1 Assurance of Discontinuance, dated February 23, 2010, between the Attorney General of the State of New York and Oppenheimer & Co. Inc. (previously filed as an Exhibit to Form 8-K filed February 26, 2010). 10.2 Lease dated July 15, 2011 between 85 Broad Street LLC, Landlord and Viner Finance Inc., Tenant for premises at 85 Broad Street, New York, NY (previously filed as an exhibit to Form 10-Q for the quarterly period ended June 30, 2011). 10.3 Consent Order from the Commonwealth of Massachusetts Division of Securities dated February 26, 2010 (previously filed as an exhibit to Form 10-K for the year ended December 31, 2009). 10.4 Security Agreement by and among Oppenheimer Holdings Inc., as grantor, and each other grantor from time to time party thereto and the Bank of New York Mellon Trust Company, N.A., as Collateral Agent dated as of June 23, 2017 (previously filed as an exhibit to Form 8-K dated June 23, 2017). 10.30 First Amendment to Agreement of Lease dated January 29, 2013 between 85 Broad Street LLC, Landlord and Viner Finance Inc., Tenant for premises at 85 Broad Street, New York, NY (previously filed as an exhibit to Form 10-K for the year ended December 31, 2012). 10.31 Form of Indemnification Agreement between Oppenheimer Holdings Inc. and the directors of Oppenheimer Holdings Inc., as the Indemnified Party, dated as of October 25, 2012. (previously filed as an exhibit to Form 10-K for the year ended December 31, 2012). 10.32 Form of Indemnification Agreement between Oppenheimer Holdings Inc. and the officers of Oppenheimer Holdings Inc., as the Indemnified Party, dated as of October 25, 2012. (previously filed as an exhibit to Form 10-K for the year ended December 31, 2012). 10.33 Oppenheimer & Co. Inc. Executive Deferred Compensation Plan (As Amended and Restated Effective January 1, 2005) (As Further Amended and Restated with respect to Specific Elective Accounts Effective as of March 1, 2013) (previously filed as an exhibit to Form 10-K for the year ended December 31, 2012). 10.34 Oppenheimer Holdings Inc. 2014 Incentive Plan (previously filed as an exhibit to Form 10-K for the year ended December 31, 2013). 10.37 Amended and Restated Performance-Based Compensation Agreement between Oppenheimer Holdings Inc. and Albert G. Lowenthal effective as of May 11, 2015 (previously filed as an exhibit to form 10-K for the year ended December 31, 2017). 10.38 Oppenheimer & Co. Inc. 2019 Executive Deferred Compensation Plan (filed herewith) Table of Contents 136 10.40 Offer of Settlement, dated February 22, 2010, between the Commonwealth of Massachusetts Division of Securities and Oppenheimer & Co. Inc., Albert Lowenthal, Robert Lowenthal and Greg White (previously filed as an Exhibit to Form 8-K filed February 26, 2010). 21 Subsidiaries of the registrant 23.1 Consent of independent accountants (filed herewith). 31.1 Certification signed by A.G. Lowenthal (filed herewith). 31.2 Certification signed by Jeffrey J. Alfano (filed herewith). 32.1 Certification pursuant to 18 U.S.C. Section 1350 signed by A.G. Lowenthal (filed herewith). 32.2 Certification pursuant to 18 U.S.C. Section 1350 signed by Jeffrey J. Alfano (filed herewith). 101 Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets as of December 31, 2018 and December 31, 2017, (ii) the Consolidated Statements of Operations for the three years ended December 31, 2018, 2017 and 2016, (iii) the Consolidated Statements of Comprehensive Income (Loss) for the three years ended December 31, 2018, 2017 and 2016, (iv) the Consolidated Statements of Changes in Stockholders' Equity for the three years ended December 31, 2018, 2017 and 2016, (v) the Consolidated Statements of Cash Flows for the three years ended December 31, 2018, 2017 and 2016, and (vi) the notes to the Consolidated Financial Statements.* * This information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934. 137 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 1st day of March, 2019. OPPENHEIMER HOLDINGS INC. BY: /s/ Jeffrey J. Alfano Jeffrey J. Alfano, Chief Financial Officer (on behalf of the Registrant) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ J.J. Alfano Chief Financial Officer (Principal Financial and Accounting Officer) March 1, 2019 J.J. Alfano /s/ E. Behrens Director March 1, 2019 E. Behrens /s/ T. Dwyer Director March 1, 2019 T. Dwyer /s/ W. Ehrhardt Director March 1, 2019 W. Ehrhardt /s/ P. Friedman Director March 1, 2019 P. Friedman /s/ L. Roth Director March 1, 2019 L. Roth /s/ A.G.Lowenthal Chairman, Chief Executive Officer (Principal Executive Officer), Director March 1, 2019 A.G. Lowenthal /s/ R.S. Lowenthal Director March 1, 2019 R.S. Lowenthal /s/ A.W. Oughtred Director March 1, 2019 A.W. Oughtred /s/ D. Glasser Director March 1, 2019 D. Glasser EXHIBIT 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in this Registration Statement on Form S-4 (No. 333-219753), Form S-8 (Nos. 333-129385, 333-129387, 333-129389, 333-129390, 333-135064, 333-146989, 333-146990, 333-157686,333-180979, 333-195951 and 333-217824) of our reports dated March 1, 2019, relating to the financial statements and financial statement schedules of Oppenheimer Holdings Inc. and subsidiaries (the “Company”) and the effectiveness of Company’s internal control over financial reporting, appearing in this Annual Report on Form 10-K of Company for the year ended December 31, 2018, and to the reference to us under the heading “Experts” in the Prospectus, which is part of this Registration Statement. /s/ Deloitte & Touche LLP New York, NY March 1, 2019 EXHIBIT 31.1 CERTIFICATION I, Albert G. Lowenthal, certify that: 1.I have reviewed this annual report on Form 10-K of Oppenheimer Holdings Inc.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. /s/ Albert G. Lowenthal Name: Albert G. Lowenthal Title: Chief Executive Officer March 1, 2019 EXHIBIT 31.2 CERTIFICATION I, Jeffrey J. Alfano, certify that: 1.I have reviewed this annual report on Form 10-K of Oppenheimer Holdings Inc.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. /s/ Jeffrey J. Alfano Name: Jeffrey J. Alfano Title: Chief Financial Officer March 1, 2019 EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 The undersigned, Albert G. Lowenthal, Chairman and Chief Executive Officer of Oppenheimer Holdings Inc. (the “Company”), hereby certifies that to his knowledge the Annual Report on Form 10-K for the year ended December 31, 2018 of the Company filed with the Securities and Exchange Commission on the date hereof (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the period specified. Signed at New York, New York, this 1st day of March, 2019. /s/ Albert G. Lowenthal Albert G. Lowenthal Chairman and Chief Executive Officer EXHIBIT 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 The undersigned, Jeffrey J. Alfano, Chief Financial Officer of Oppenheimer Holdings Inc. (the “Company”), hereby certifies that to his knowledge the Annual Report on Form 10-K for the year ended December 31, 2018 of the Company filed with the Securities and Exchange Commission on the date hereof (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the period specified. Signed at New York, New York, this 1st day of March, 2019. /s/ Jeffrey J. Alfano Jeffrey J. Alfano Chief Financial Officer EXHIBIT 21 Subsidiaries of Oppenheimer Holdings Inc. As of December 31, 2018 Pursuant to Item 601(b)(21)(ii) of Regulation S-K, the names of certain other subsidiaries of Oppenheimer are omitted because, considered in the aggregate as a single subsidiary, they would not constitute a "significant subsidiary" as that term is defined in Rule 1-02(w) of Regulation S-X under the Securities Exchange Act of 1934. Company Jurisdiction of Incorporation or Formation Oppenheimer & Co. Inc.Delaware E.A. Viner International Co.Delaware Oppenheimer Asset Management Inc.New York Oppenheimer Europe Ltd.United Kingdom OPPENHEIMER & CO. INC. AND SUBSIDIARIES (S.E.C. I.D. No. 8-04077) CONSOLIDATED STATEMENT OF FINANCIAL CONDITION AS OF DECEMBER 31, 2018 AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Filed pursuant to Rule 17a-5(e)(3) under the Securities E chan e Act of 1934 as a Public Document Oppenheimer & Co. Inc. and Subsidiaries Table of Contents As of December 31, 2018 Page(s) Report of Independent Registered Public Accounting Firm Consolidated Statement of Financial Condition. Notes to Consolidated Statement of Financial Condition. 4 ,5-31 Deloitte Deloitte 8 Touche LLP 30 Rockefeller Plaza New York, NY 10112-0015 USA Tel:+1 212 492 4000 Fax:+1 212 489 1687 www.deloitte.com REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholder of Oppenheimer & Co. Inc. Opinion on the Financial Statement We have audited the accompanying consolidated statement of financial condition of Oppenheimer & Co. Inc. and subsidiaries (the Company ) as of December 31, 2018, and the related notes (collectively referred to as the financial statemen ). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31, 2018, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion The financial statement is the responsibility of the Company s management. Our responsibility is to express an opinion on this financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as ev luating the overall presentation of the financial statement. We believe that our audit of the financial statement provides a reasonable basis for our opinion. February 27, 2019 We have served as the Company's auditor since 2013. Oppenheimer & Co. Inc. and Subsidiaries Consolidated Statement of Financial Condition As of December 31, 2018 (Expressed in ihoiisands. e cept inimbe of share a d per share amou ts) SSE S Cash and cash equivalents $19,675 Deposits with clearing organizations (includes securities with a fair value of $34,599) 67,321 Receivable from brokers, dealers and clearing organizations 166,493 Receivable from customers, net of allowance for credit losses of $886 720,506 Securities purchased under agreements to resell 290 Securities owned, including amounts ple ged of $517,951 at fair value 832,016 Notes receivable, net of accumulated amortization and allowance for uncollectibles of $24,784 and $6,800, respectively 43,883 Furniture, equip ent and leasehold irhproyements, net of accumulated epreciation o ,$ 0,305 . 546) Deferred income taxes, net 26,573 ¦•Goodwill 10,788 Other assets 101,765 Total assets 1,996,856 I ABim iES AND S rOClKHOLDER S EQIJI l Y Liabilities Drafts payable $16,348 Bank call loans 15,000 Payable to brokers, dealers and clearing organizations 289,513 Payable to customers ¦ ¦ ;336,907 Securities sold under agree ents to repurchase 484,218 Securitie sol but not yet pu chased, at fai value 85,446 Income tax payable 64,891 Accrued compensation • • y .157,823 Accounts payable and other liabilities 154,896 Subordinated borrowings 112,558 Total liabilities 1,717,600 Co mitment and contingencies (note 11) Stockhol er's equity Common stock, par value $100 per share - 1,000 shares authorized; 760 shares issued and outstanding.,76 Additional paid-in capital 307,911 Accumulated deficit (27,750) Accumulated other comprehensive income 377 Less 369 shares of tre sury stock, at cost (1. 58) Total stockholder's equity 279,256 Total liabilities and stocldiolder's equity 1,996,856 The accompanying notes are an integral part of the consolidated statement of financial condition. 4 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 1. Or anization Oppenheimer & Co. Inc. (the "Company" and "Oppenheimer") is a wholly owned subsidiary whose ultim te parent is Oppenheimer Holdings Inc. (the "Parent"), a Dela are public corporation. The Company is a New York-based registered broker-dealer and investment adviser in securities under the Securities Exchange Act of 1934 ("the Act") and is a member firm of the Financial Industry Regulatory Authority. The Company is also a registered introducing broker with the Commodities Futures Trading Commission and is a member of the National Futures Association. The Company is also a member of Intercontinental Exchange, Inc., known as ICE Futures U.S., and various exchanges, including the New York Stock Exchange, Inc. The Company engages in a broad range of activities in the securities industry, including etail securities brokerage, institutional sales and trading, investment banking (both corporate and public finance), underwritings, research, market-making, and investment advisory and asset anagement services. The Company provides its services from offices located throughout the United States. In addition, the Company conducts business in Israel and Latin America. 2. Summary of significant accounting policies and estimates Basis of Presentation The consolidated statement of financial condition of the Company includes the accounts of the Company's wholly owned subsidiaries; Freedom Investments, Inc. ("Freedom"), a registered broker- ealer in securities, which provides on-line investing as well as discount brokerage services; Oppenheimer Israel (OPCO) Ltd., which is engaged in offering investment services in the State of Israel; Pace Securities, Inc. ("Pace"), Prime Charter Ltd., Ol Michigan Corp. and Subsidiaries (inactive), and Reich & Co., Inc. (in liquidation). This consolidated statement of financial condition has been prepared in conformity with accountin principles generally accepted in the United States of America. Intercompany transactions and balances have been eliminated in the preparation ofthe consolidated statement of financial condition. Use of Estimates The preparation of the consolidated statement of financial condition in conformity with generally accepted accounting principles requires management to m ke estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated statement of financial condition. In presenting the consolidated statement of financial condition, management makes estimates regarding valuations of financial instruments, loans and allowances for credit losses, the outcome of legal and regulatory matters, goodwill and other intangible assets, share-based compensation plans and income taxes. Estimates, by their nature, are based on judgment and available information. Therefore, actual results could be materially different from these estimates. A discussion of certain critical accounting policies in which estimates are a significant component of the amounts reported on the consol idated statement of financial condition follo s. Financial Instruments and Fair Value Fina cial Instrume ts Securities owned, securities sold but not yet purchased, investments and derivative contracts are carried at fair value with changes in fair value recognized in earnings each period. 5 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 F'air Value Measurements Accounting guidance for the fair value measurement of financial assets, which defines fair value, establishes a framework for measuring fair value, establishes a fair value measurement hierarchy, and expands fair value measurement disclosures. Fair value, as defined by the accounting guidance, is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy established by this accounting guidance prioritizes the inputs used in valuation techniques into the following three categories (highest to lowest priority): Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets; Level 2; Inputs other than quoted prices included in Level 1 that are observable for the asset o liability either directly or indirectly; and Level 3: Unobservable inputs that re significant to the overall fair value measurement. The Company's financial instruments that are recorded at fai value generally are classified within Level 1 or Level 2 within the fair value hierarchy using quoted market prices or quotes from market makers or broker-dealers. Financial instruments classified within Level 1 are valued based on quoted market prices in active markets and consist of U.S. Treasury and Agency securities, corporate equities, and certain money market instruments. Level 2 financial instruments pri arily consist of investment grade and high-yield corporate debt, convertible bonds, mortgage and asset-backed securities, and municipal obligations. Financial instruments classified as Level 2 are valued based on quoted prices for si ilar assets and liabilities in active markets and quoted prices for identical or similar assets and liabilities in markets that are not active. Some financial instruments are classified within Level 3 within the fair value hierarchy as observable pricing inputs are not available due to limited market activity for the asset or liability. Such financial instruments include certain distressed municipal securities and auction rate securities ("ARS"). Fair Value Option The Company has the option to measure certain financial assets and financial liabilities at fair value with changes in fair value recognized in earnings each period. The Company may make a fair value option election on an instrument-by-instrument basis at initial recognition of an asset or liability or upon an event that gives rise to a new basis of accounting for that instru ent. Con olidation The Company consolidates all subsidiaries in which it has a controlling financial interest, as well as any variable interest entities ("VlEs") where the Company is deemed to be the primary beneficiaiy, when it has the power to make the decisions that most significantly affect the economic performance of the VIE and has the obligation to absorb significant losses or the right to receive benefits that could potentially be significant to the VIE. The Company reviews factors, including the rights of the equity holders at risk and obligations of equity holders to absorb losses or receive expected residual returns, to determine if the entity is a VIE. In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly or indirectly by the Company. Under Accounting Standards Update ("ASU") 2015-02, a general partner will not consolidate a partnership or similar entity under the voting interest model. See note 6 for further details. Financing Receivables The Company's financing receivables include customer margin loans, securities purchased under agreements to resell ("reverse repurchase agreements"), and securities borrowed transactions. The Company uses financing receivables to extend margin loans to customers, meet trade settlement requirements, and facilitate its matched-book arrangements and inventory requirements. The Company's financing receivables are secured by collateral received from clients and counterparties. In many cases, the Company is permitted to sell or re-pledge securities held as collateral. These securities may be used to collateralize repurchase agreements, to enter into securities lending agreements, to cover short positions or fulfil 1 the obligation of securities fai Is to deliver. The Company monitors the market value of the collateral received on a daily basis and may require clients and counterparties to deposit additional collateral or return collateral pledged, when appropriate. 6 Oppenheimer & Co. Inc. and Snbsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 Customer receivables, primarily consisting of customer margin loans collateralized by custo er-owned securities, are stated net of allowance for credit losses. The Company reviews large customer accounts that do not comply with the Company s margin requirements on a case-by-case basis to determine the likelihood of collection and records an allo ance for credit loss following that process. For small customer accounts that do not comply with the Company's margin requirements, the allowance for credit loss is generally recorded as the amount of unsecured or partially secured receivables. The Company also makes loans to financial advisers as part of its hiring process. These loans are recorded as notes receivable on its consolidated statement of financial condition. Allowances are established on these loans if the financial adviser is no longer associated with the Company and the loan has not been promptly repaid. Legal and Regulatory Reserves The Company records reserves related to legal and regulatoi proceedings in accounts payable and other liabilities. The determination of the amounts of these eserves requires significant judg ent on the part of management. In accordance with applicable accounting guidance, the Company establishes reserves for litigation and regulatory matters where available information indicates that it is probable a liability had been incurred and the Company can reasonably estimate the amount of that loss. When loss contingencies are not probable or cannot be reasonably estimated, the Company does not establish reserves. When determining hether to record a reserve, management considers many factors including, but not limited to, the amount of the claim; the stage and foru of the proceeding, the sophistication of the claimant, the amount of the loss, if any, in the client's account and the possibility of wrongdoing, if any, on the part of an employee of the Co pany; the basis and validity of the claim; previous results in similar cases; and applicable legal precedents and case law. Each legal and regulatory proceeding is reviewed with counsel in each accounting period and the reserve is adjusted as deemed appropriate by anagement. Any change in the reserve amount is recorded in the results of that period. The assumptions of management in determining the esti ates of reserves may be incorrect and the actual disposition of a legal or egulatory proceeding could be greate or less than the reserve amount. Goodwill The Company defines a reportin unit as an operating segment. Goodwill of a reporting unit is subject to at least an annual test for impairment to determine if the estimated fair value of a reporting unit is less than its carrying amount. Goodwill of a reporting unit is required to be tested for impair ent between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Due to the volatility in the financial services sector and e uity markets in general, determining whether an impairment of goodwill has occurred is increasingly difficult and requires management to e ercise significant judgment. The Company's annual goodwill i pairment analysis perfoi ned as of December 31, 2018 applied the following valuation methodologies; In estimating the fair value of the reporting unit, the Company uses the market co parable approach. The market comparable approach is based on comparisons of the subject company to public companies whose stocks are actively traded ("Price Multiples") or to similar companies engaged in an actual merger or acquisition ("Precedent Transactions"). As part of this process, multiples of value relative to financial variables, such as earnings or stockholders' equity, are developed and applied to the appropriate financial variables of the subject company to indicate its value. Each of these standard valuation methodologies requires the use of management estimates and assumptions. In its Price Multiples valuation analysis, the Company uses various operating metrics of comparable companies, including revenues, after-tax earnings, and EBITDA as well as price-to-book value ratios at a oint in time. The Company analyzes prices paid in Precedent Transactions that are comparable to the business conducted in the reporting unit. The Company weighs each of the valuation methods equally in its overall valuation. Given the subjectivity involved in selecting which valuation method to use, the corresponding weightings, and the input variables for use in the analyses, it is possible that a different valuation model and the selection of different input variables could produce a materially different estimate of the fair value of the reporting unit. 7 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 Share-Based Compensation Plans As part of the compensation to employees and directors, the Company uses stock-based co pensation, consisting of restricted stock, stock options and stock appreciation rights. In accordance with ASC Topic 718, "Compensation - Stock Compensation," the Company classifies the stock options and restricted stock awards as equity awards, which requires the compensation cost to be recognized in the consolidated income statement over the requisite service period of the a ard at grant date fair value and adjust for actual forfeitures. The fai value of restricted stock awards is determined based on the grant date closing price of the Parent's Class A non-voting common stock ("Class A Stock") adjusted for the present value of the dividend to be received upon vesting. The fair value of stock options is determined using the Black-Scholes model. Key assumptions used to estimate the fair value include the e pected term and the expected volatility of the Parent's Class A Stock over the term of the award, the risk-free interest rate over the expected term, and the Parent's expected annual dividend yield. The Company classifies stock appreciation rights ("OARs") as liability awards, which requires the fair value to be remeasured at each reporting period until the award vests. The fair value of OARs is also determined using the Black-Scholes odel at the end of each reporting period. The co pensation cost is adjusted each reporting period for changes in fair value prorated for the portion of the requisite service period rendered. Statement of Financial Condition Cash and Cash Equivale ts The Company defines cash equivalents as highly liquid investments with original maturities of less than 90 days that are not held for sale in the ordinary course of business. Receivables from / Payables to Broke , Dealers and Clearing Orga izatio s Securities borrowed and securities loaned are carried at the amounts of cash collateral advanced or received. Securities borrowed transactions require the Company to deposit cash or other collateral with the lender. The Company receives cash or collateral in an amount generally in excess of the market value of securities loaned. The Company monitors the market value of securities borrowed and loaned on a daily basis and may require counterparties to deposit additional collateral or return collateral pledged, when appropriate. Securities failed to deliver and receive represent the contract value of securities which have not been delivered or received, respectively, by settlement date. Securities Purchased under Agreements to Resell a d Sec rities Sold nder Agreeme ts to Rep rchase Reverse repurchase agreements and securities sold under agreements to repurchase ("repurchase agreements") are treated as collateralized financing transactions and are recorded at their contractual amounts plus accrued interest. Additionally, the Company elected the fair value option for repurchase agreements and reverse repurchase agreements that do not settle overnight or have an open settle ent date. The Company can present the reverse repurchase and repurchase transactions on a net-by-counterparty basis when the specific offsetting requirements are satisfied. Notes Receivable Notes receivable represent recruiting and retention payments generally in the form of upfront loans to financial advisers and key revenue producers as part of the Company's overall growth strategy. These notes generally amortize over a service period of 3 to 9 years from the initial date of the note or based on productivity levels of employees. All such notes are contingent on the employees' continued employment with the Company. The unforgiven portion of the notes becomes due on demand in the event the e ployee departs during the service period. 8 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 F rnit re, Eq ipme t a d Leasehold Improveme ts Furniture, equipment and leasehold improvements are stated at cost less accu ulated depreciation. Depreciation of furniture, fixtures, and equipment is provided on a straight-line basis generally over 3-7 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the life of the improvement or the remaining term of the lease. Leases with escalating rents are expensed on a straight-line basis over the life of the lease. Landlord incentives are recorded as deferred rent and amortized, as reductions to lease expense, on a straight-line basis over the life of the applicable lease. Deferred rent is included in accounts payable and other liabilities on the consolidated statement of financial condition. Drafts Payable Drafts payable represent amounts drawn by the Company against a bank. Bank Call Loans Bank call loans are generally payable on demand and bear interest at various rates, such loans were collateralized by firm and/or customer securities. Foreign C rrency Translations Foreign currency balances have been translated into U.S. dollars as follows: monetary assets and liabilities at exchange rates prevailing at period end; revenue and expenses at average rates for the period; and non-monetary assets and stockholders' equity at historical rates. The functional currency of the overseas operations in Tel Aviv, Israel is the local currency. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated statement of financial condition. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in hich the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and the results of recent operations. The Company records uncertain tax positions in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740, "Inco e Taxes" on the basis of a two-step process whereby it determines whether it is more likely than not that the tax positions ill be sustained on the basis of the technical erits of the position and for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company permanently reinvests eligible earnings of its foreign subsidiaries and, accordingly, does not accrue any U.S. income taxes that would arise if such earnings were repatriated. On December 22, 2017, the Federal government enacted Public Law 115-97, commonly referred to as the Tax Cuts and Jobs Act ("TCJA"). The TCJA makes broad and complex changes to the U.S. tax code, including, but not limited to: (1) reducing the U.S. Federal corporate tax rate from 35 percent to 21 percent; (2) requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; (3) generally eliminating U.S. federal income taxes on dividends fro foreign subsidiaries; (4) a new provision designed to tax global intangible low-taxed income ("GILTl"), which allows for the possibility of using foreign tax credits ("FTCs") and a deduction of up to 50 percent to offset the income tax liability (subject to some 9 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 limitations); (5) limitations on the use of FTCs to reduce the U.S. income tax liability; (6) eliminating the corporate alternative minimu tax ("AMT") and changing how existing MT credits can be realized; (7) creating the base erosion anti-abuse tax, a new minimum tax; (8) limitations on the deductibility of certain executive compensation; (9) creating a new limitation on deductible interest expense; (10) eliminating the deductibility of entertainment expenses; and (11) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31,2017. On December 22,2017, the SEC staff issued Staff Accounting Bulletin 118 ( SAB 118 ) which provides guidance on accounting for the impact of the Tax Cuts and Jobs Act (the Tax Act ). SAB 118 provides a measurement period, not to e ceed 12 months from the date of enactment to complete, the accounting associated with the Tax Act. Under SAB 118, for matters for which the accounting related to the Act had not yet been completed, the Company recognized provisional amounts to the extent that they were reasonably estimable. The Co pany has completed its accounting of the impact of the Tax Act in the current period and there were no significant changes to the provisional amounts previously recorded in accordance with SAB 118. See note 9, Income taxes. New Accounting Pronouncements Recently Issued In February 2016, the FASB issued ASU 2016-02, "Leases." The ASU requires the recognition of a right-of-use asset and lease liability on the balance sheet by lessees for those leases classified as operating leases under previous guidance. The ASU is effective for fiscal years beginning after December 15, 2018. The Company evaluated the impact ofadopting this ASU which will not have a significant impact on its consolidated statement of financial condition. As of December 31,2018, the Company estimates that it will record right-of-use assets between $4.0 million to $6.0 million and lease liabilities within the same range on the consolidated statement of financial condition upon the adoption of this standard, which predominately relates to real estate leases. The Company has elected the modified retrospective method and will include any cumulative-effect adjustment as of the date of adoption. In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments," which amends the FASB's guidance on the impairment of financial instru ents. The ASU adds to U.S. GAAP an impairment model ("current expected credit loss model"). Under this new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The ASU is effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact, if any, that the ASU will have on the Company; the adoption ofthe ASU is not currently expected to have a m terial impact on the Company's consolidated statement of financial condition. In January 2017, the FASB issued ASU 2017-04, "Intangibles-Goodwill and Other, Simplifying theTest for Goodwill Impair ent," which simplifies the subsequent measurement of goodwill. The Company is no longer required to perform its Step 2 good ill impairment test; instead, the Company should perform its annual or interim goodwill impairment test by co paring the fair value of a reporting unit with its carrying amount. The ASU is effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. The Company will not early adopt this ASU. The Company is currently evaluating the i pact, if any, of the ASU on the Company; the adoption of the ASU is not currently expected to have a material impact on the Company's consolidated statement of financial condition. In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement - Disclosure Framework - Changes to the Disclosure Requirements fo the Fair Value Measurement," which modifies the disclosure requirements related to fair value measurement. The ASU is effective for fiscal years and interim periods beginning after December 15, 2019 and early adoption is permitted. The Company will not early adopt this ASU. The Company is currently evaluating the impact, if any, of the ASU on the Company's disclosure. 10 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 3. Receivable from and payable to brokers, dealers and clearin or anizations (Expressed in tho ands) As of December 31,2018 Receivable from brokers, de lers and clearing organizations consists of: Securities borro ed $108,144 Receivable from brokers 20,140 Securities failed to deliver 7,021 Clearing o ganiz tions 28,777 Other 2,411 Total ,166.493 Payable to brokers, dealers and clearing organizations consists of: Securities loaned 146,815 Payable to brokers 158 Securities failed to receive 27,m Other 114,741 ¦¦¦ Total t 289,513 4. Fair value easurements Securities owned, securities sold but not yet purchased, investments and derivative contracts are carried at fair value with changes in fair value recognized in earnings each period. Valuation Techniques A description of the valuation techniques applied and inputs used in measuring the fair value of the Company's financial instruments is as follows: U.S. Government Obligatio s U.S. Treasury securities are valued using quoted market prices obtained from active market makers and inter-dealer brokers. U.S. Age cy Obligations U.S. agency securities consist of agency issued debt securities and mortgage pass-through securities. Non-callable agency issued debt securities are generally valued using quoted market prices. Callable agency issued debt securities are valued by benchmarking model-derived prices to quoted market prices and trade data for identical or com arable securities. The fair value of mortgage pass-through securities are model driven with respect to spreads of the comparable to-be-announced ("TBA") security. Sovereig Obligations The fair value of sovereign obligations is determined based on quoted market prices when available or a valuation model that generally utilizes interest rate yield curves and credit spreads as inputs. Corpo ate Debt and Other Obligations The fair value of corporate bonds is estimated using recent transactions, broker quotations and bond spread information. Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 Mortgage and Other Asset-Backed Sec rities The Company holds non-agency securities collateralized by home equity and various other types of collateral which are valued based on external pricing and spread data provided by independent pricing services. When specific external pricing is not observable, the valuation is based on yields and spreads for comparable bonds. Municipal Obligatio s The fair value of municipal obligations is estimated using recently executed transactions, broker quotations, and bond spread information. Co vertible Bonds The fair value of convertible bonds is estimated using recently executed transactions and dollar-neutral price quotations, where observable. When observable price quotations are not available, fair value is determined based on cash flow models using yield curves and bond spreads as key inputs. Corporate Equities Equity securities and options are generally valued based on quoted prices from the exchange or market where traded. To the extent quoted prices are not available, fair values are generally derived using bid/ask spreads. A ctio Rate Sec rities ("ARS") In February 2010, Oppenheimer finalized settlements with each of the New York Attorney General's office ("NYAG") and the Massachusetts Securities Division (" SD" and, together with the NYAG, the "Regul tors") concluding investigations and ad inistrative proceedings by the Regulators concerning Oppenheimer's marketing and sale of ARS. Pursuant to the settlements with the Regulators, Oppenheimer agreed to extend offers to repurchase ARS from certain of its clients subject to certain terms and conditions more fully described below. As of December 31,2018, the Company had no outstanding ARS purchase commitments related to the settlements with the Regulators. In addition to the settlements with the Regulators, Oppenheimer has also reached settlements of and received adverse awards in legal proceedings with various clients where the Company is obligated to purchase ARS. Pursuant to completed Purchase Offers (as defined) under the settlements with the Regulators and client-related legal settle ents and awards to purchase ARS, as of December 31, 2018, the Company purchased and holds (net of redemptions) approximately $40.7 million in ARS from its clients. In addition, the Company is committed to purchase another $7.3 million in ARS from clients through 2020 under legal settlements and awards. The ARS positions that the Company owns and is co mitted to purchase primarily represent auction rate preferred securities issued by closed-end funds and, to a lesser extent, municipal auction rate securities which are municipal bonds wrapped by unicipal bond insurance and student loan auction rate securities which are asset-backed securities backed by student loans. Interest rates on ARS typically reset through periodic auctions. Due to the auction mechanism and generally liquid markets, ARS have historically been categorized as Level 1 of the fair value hierarchy. Beginning in February 2008, uncertainties in the credit markets resulted in substantially all of the ARS market experiencing failed auctions. Once the auctions failed, the ARS could no longer be valued using observable prices set in the auctions. The Company has used less observable determinants of the fair value of ARS, including the strength in the underlying credits, announced issuer I'edemptions, completed issuer redemptions, and announcements from issuers I'egai'ding their intentions with I espect to their outstanding ARS. The Company has also developed an internal methodology to discount for the lack of liquidity and non-performance risk of the failed auctions. Due to liquidity problems associated with the ARS market, ARS that lack liquidity are setting their interest rates according to a maximum rate formula. For example, an auction rate preferred security maximum rate may be set at 200% of a short-term inde such as LIBOR or U.S. Treasury yield. For fair value purposes, the Company has determined that the maximum spread would be an adequate risk premium to account for illiquidity in the market. Accordingly, the Company applies a spread to the short-term index for each asset class to derive the discount rate. The Company uses short-term U.S. T easui yields as its benchmark short-te m index. The risk of non-perfonnance is typically reflected in the prices of ARS positions where the fair value is derived from recent trades in the secondary market. 12 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 The ARS purchase commitment, or derivative asset or liability, arises from both the settlements with the Regulators and legal settlements and awards. The ARS purchase commitment represents the difference bet een the principal value and the fair value of the ARS the Co pany is committed to purchase. The Company utilizes the same valuation ethodology for the ARS purchase commitment as it does for the ARS it owns. Additionally, the present value of the future principal value of ARS purchase commitments under legal settlements and awards is used in the discounted valuation model to reflect the time value of money over the period of time that the commitments are outstanding. The amount of the ARS purchase commitment only becomes determinable once the Company has met with its pri ary regulator and the NYAG and agreed upon a buyback amount, commenced the ARS buyback offer to clients, and received notice from its clients which ARS they are tendering. As a result, it is not possible to observe the current yields actually paid on the ARS until all of these events have happened which is typically very close to the time that the Company actually purchases the ARS. For ARS purchase co mitments pursuant to legal settlements and awards, the criteria for purchasing ARS from clients is based on the nature of the settlement or award which will stipulate a time period and a ount for each repurchase. The Company will not kno which ARS will be tendered by the client until the stipulated time for repurchase is reached. Therefore, the Company uses the current yields of ARS owned in its discounted valuation model to determine a fail- value of ARS purchase commitments. The Company also uses these current yields by asset class (i.e., auction rate preferred securities, municipal auction rate securities, and student loan auction rate securities) in its discounted valuation model to determine the fair value of ARS purchase commitments. In addition, the Company uses the discount rate and duration of ARS owned, by asset class, as a proxy for the duration of ARS purchase co mitments. 13 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 Additional information regarding the valuation technique and inputs for ARS used is as follows; (Expressed in tho sands) Quantitative Information abo t ARS Level 3 Fair Value Measurements as of December 31,2018 Valuation Fair Valuation Unobservable Weighted Product Principal Adjust ent Value Technique Input Range Average Auction Rate Securities Owned Auction Rate $ 21,350 $ 1 $ 21.349 Discounted Discount Rate 2.86% to 3.8 %3.88% Preferred Securities Cash Flow D ration ,;'A' "L'YearCfCj::}uA'VsCi Current Yield 2.69% to 4.05%4.03% Auction Rate Preferred Securities 18,950 2,697 16,253 Tender Offer N/A N/A N/A Municipal uction Rate Securities ; ' 757 ¦¦ A ,75:Discounted :Discount Rate :4.35%4.35% Cashflow Duration 2 Yea s 2 Years teurrchtYiel :* ? .T51% a 5.51% Student Loan ; 275 -W 275 Discounted Discount Rate ®3. 8%7 : :3te8% : Auction ate : V A. Securities Cash Flow Duration 4 Years 4 Years urreM Yiel ,¦j 3.6 %i 7 7 3.64% $40,650 $2,698 $37,952 Auctio Rate Securities Commitme ts to Purchase Auction Rate Preferred Securities $7,305 $1,096 $6,209 Tender Offer N/A N/A N/A A %7,305 A:1,0 6:$:7 6,209 Total $47,955 $3,794 $44,161 (1) Principal amount represents the par value of the ARS and is included in securities owned on the consolidated statement of financial condition as of December 31,2018. The valuation adjustment amount is included as a reduction to securities owned on the consolidated statement of financial condition as of December 31, 2018. (2) Derived by applying a multiple to the spread between 110% to 150% to the U.S. Treasury ate of 2.60%. (3) Based on current yields for ARS positions owned. (4) Residual ARS amounts owned and ARS commitments to purchase that were subject to tender offers were priced at the tender offer price. Included in Level 2 of the fair value hierarchy. (5) Derived by applying the sum of the spread of 175% to the U.S. Treasury rate of 2.49% (6) Derived by applying a multiple to the spread of 1.20% to the U.S. Treasury rate of 2.48%. (7) Principal amount represents the present value of the ARS par value that the Company is committed to purchase at a future date. This principal amount is presented as an off-balance sheet item. The valuation adjustment amount is included in accounts payable and other liabilities on the consolidated statement of financial condition as of December 31, 2018. 14 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 The fair value of ARS and ARS purchase commitments is particularly sensitive to movements in interest rates. Incre ses in short¬ term interest rates would increase the discount rate input used in the ARS valuation and thus reduce the fair value of the ARS (increase the valuation adjustment). Conversely, decreases in short-term interest rates would decrease the discount rate and thus increase the fair value of ARS (decrease the valuation adjustment). However, an increase (decrease) in the discount rate input would be partially mitigated by an increase (decrease) in the current yield earned on the underlying ARS asset increasing the cash flows and thus the fair value. Furthermore, movements in short term interest rates would likely impact the ARS duration (i.e., sensitivity of the price to a change in interest rates), which would also have a mitigating effect on interest rate movements. For example, as interest rates increase, issuers of ARS have an incentive to redeem outstanding securities as servicing the interest payments gets prohibitively expensive which would lower the duration assumption thereby increasing the ARS fair value. Alternatively, ARS issuers are less likely to redeem ARS in a lower interest rate environment as it is a relatively inexpensive source of financing which would increase the duration assumption thereby decreasing the ARS fair value. For example, see the following sensitivities: The impact of a 25 basis point increase in the discount rate at December 31, 2018 would result in a decrease in the fair value of $22,000 (does not consider a corresponding reduction in duration as discussed above). • The impact of a 50 basis point increase in the discount rate at Dece ber 31, 2018 would result in a decrease in the fair value of $76,000 (does not consider a corresponding reduction in duration as discussed above). These sensitivities are hypothetical and are based on scenarios where they are "stressed" and should be used with caution. These estimates do not include all of the interplay among assumptions and are estimated as a portfolio rather than as individual assets. Due to the less observable nature of these inputs, ARS is primarily categorized in Level 3 of the fair value hierarchy. As of December 31,2018, the Company had a valuation adjustment (unrealized loss) of $2.7 million for ARS owned which is included as a reduction to securities owned on the consolidated statement of financial condition. As of December 31, 2018, the Company also had a valuation adjustment of $ 1.1 million on ARS purchase commitments from legal settlements and awards which is included in accounts payable and other liabilities on the consolidated statement of financial condition. The total valu tion adjustment was $3.8 million as of December 31,2018. The valuation adjustment represents the difference between the principal value and the fair value of the ARS owned and ARS purchase commitments. Investments In its role as general partner in certain hedge funds and private equity funds, the Co pany, through its subsidiaries, holds direct investments in such funds. The Company uses the net asset value of the underlying fund as a basis for estimating the fair value of Its investment. The following table provides information about the Company's investments in Company-sponsored funds as of December 31,2018: (Expressed i thousands) Hed e funds '* Private equity funds Unfunded Redemption Fair Value Commitments Frequency A337,\, L . A; Ann allytt 8 N/A '7 345'')$ CVC'.: Redemption Notice Period 120 Days N/A (1) Includes investments in hedge funds and hedge fund of funds that pursue long/short, event-driven, and activist strategies. Each hedge fund has various restrictions regarding redemption; no investment is locked-up for a period reater than one year. (2) Includes private equity funds and private equity fund of funds with a focus on diversified portfolios, real estate and global natural resources. Due to the illiquid nature of these funds, investors are not permitted to make withdrawals without the consent of the general partner. The lock-up period of the private equity funds can extend to 10 years. 15 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 Valuation Process The Com any's Finance & Accounting ("F&A") group is responsible for the Company's fair value policies, processes and procedures. F&A is independent from the business units and trading desks and is headed by the Parent's Chief Financial Officer ("CFO"), who has final authority over the valuation of the Company's financial instruments. The Finance Control Group ("FCG") within F&A is responsible for daily profit and loss reporting, front-end trading system position reconciliations, monthly profit and loss reporting, and independent price verification procedures. For financial instruments categorized in Levels 1 and 2 of the fair value hierarchy, the FCG performs a monthly independent price verification to determine the reasonableness of the prices provided by the Company's independent pricing vendor. The FCG uses its third-party pricing vendor, executed transactions, and broker-dealer quotes for validating the fair values of financial instruments. For financial instruments categorized in Level 3 of the fair value hierarchy easured on a recurring basis, primarily for ARS, a group comprised of the Parent's CFO, the Controller, and an Operations Director are responsible for the ARS valuation model and resulting fair valuations. Procedures performed include aggregating all ARS owned by type from firm inventory accounts and ARS purchase commitments from regulatory and legal settlements and awards provided by the Legal Department. Observable and unobservable inputs are aggregated from various sources and entered into the ARS valuation model. For unobservable inputs, the group reviews the appropriateness of the inputs to ensure consistency with how a market participant would arrive at the unobservable input. For example, for the duration assumption, the group would consider recent policy statements regarding short-term interest rates by the Federal Resei've and recent ARS issuer redemptions and announcements for future rede ptions. The model output is reviewed for reasonableness and consistency. Where available, comparisons are perfonned bet een ARS owned or committed to purchase with ARS that are trading in the secondary market. 16 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 Assets and Liabilities Measured at Fair Value The Company's assets and liabilities, recorded at fair value on a recurring basis as of December 31, 2018, have been categorized based upon the above fair value hierarchy as follows; Assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 (Expressed in tho sands) Level 1 Level 2 Leve! 3 Total Assets ' '¦ ¦ , Cash equivalents $10.500 $$$10.500 Deposits wi h clearin organizations Securities owned: : 34,599 ¦ i'34,59 U.S. rea ry sec rities : v! e52,743; '652,743 U.S. Agency securities 812 6,474 7,286 Sovereign obligations 214 214 Corporate debt and ot er obligations 19,819 19,819 , Mortgage an Other asset-backed securities y 7; a 2,486 1 --2.486 Municipal obligations 2.176 52,176 Convertible bonds .7 ¦ V ; ;31, 70 31,270 Corporate equities 28,063 28.063 .Mdpey markets fill ¦ :- -y 7 Auction rate securities 16,253 21,69 37,952 S curities owned, at fair value 681,625,\ 128,692 :f :L21, 9 L 832.016 Investments Derivative contracts: ' ; 101 101 TBAs 4,873 4,873 '¦¦ Idtal;':'.; ; : 26, 24:$t AT 3,5 5 ''7''2l;8()iQi 882,089 In bilities Securities sold but not yet purchased:: U.S, Treasury securities $53,646 $$$53,646 1 !.S. . enc . ecurities : 3::y V 3 Sovereign obligations 78 78 V Corporate debt an other obli ations i , ¦ - i I 7,236: v' ;7'i ,7-ry:'7 f ;fi23 Convertible bonds 9.709 9,709 : i Cor orate equities : ;V 14,774 f five ivA;14,774 Securities sold but not yet purchased, at fair value Derivative contracts; 68,420 17,026 85,446 Futures 807 807 Foreign exchange forward contracts 4 ~4 TBAs 4,873 4,873 ARS purchase commitments AT 4,096'1,096 Derivative contracts, total 811 5.969 6,780 Total,: 69,231:; 7;22,995l $1; :v77 'i -A;''7L:V'9 226'. 17 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 Financial Instruments Not Measured at Fair Value The table below presents the carrying value, fair value and fair value hierarchy category of certain financial instruments that are not measured at fair value on the consolidated state ent of financial condition. The table belo excludes non-financial assets and liabilities (e.g., furniture, equipment and leasehold improvements and accrued compensation). The carrying value of financial instruments not measured at fair value categorized in the fair value hierarchy as Level 1 or Level 2 (e.g., cash and receivables from customers) approximates fair value because of the relatively short term nature of the underlying assets. Assets and liabilities not measured at fair value as of December 31, 2018 (Expressed in thousa ds)Fair Value Measurement: Assets Cariying Value Level 1 Level 2 Level 3 Total Cash A 9il:75,$;: :9,175i $3:43 : 7 4' 4'i - $ 9,175 Deposits with clearing organization 32,722 32,722 - 32,722 Receivable from brokers, dealers and clearing organizations; Securities borrowed 108,144 108,144 108,144 Receivables from b okers 20,140 20,140 20,140 Securities failed to deliver 7,021 7,021 7,021 Clearin organizations 28,7773 :28, 77: 3 3 28,777 Other 2,411 2,411 2,411 166,493 166,493 166,493 Receivable fro customers 720,506 720,506 720,506 Securities urchased under agreements to resell .290 290 290 Notes receivable, net 43,883 43,883 43,883 Investments 59,765 59,765 59.7 5 (1) Included in other assets on the consolidated state ent of financial condition. (E pressed in thousa ds)Fair Value Measure ent: Liabilities Carrying Value Level 1 Level 2 Level 3 Total Drafts payable S 16,348 $3 16,34 i :$,3 :''3 3,: : '$'N''3 $ 16.348 Bank call loans 15,000 15,000 15,000 Payables to brokers, deale s and clearing organization ; Securities loaned 146,815 146,815 146,815 ; Payable to brokers 158 --158 158 Securities failed to receive 27,799 27,799 27,799 : Other:L',,;.:il3, 3 '113,934 113,9.34 288,706 288,706 288,706 Payables to customers 336,907 33 ,907 336,907 Securities sold under agree ents to repurchase 484,218 484,218 484,218 Subordinated borrowings : '412,558 112,558 112.558 18 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 Fair Value Option The Company elected the fair value option for securities sold under agreements to repurchase ("repurchase agreements") and securities purchased under agreements to resell ("reverse epurchase agreements") that do not settle overnight or have an open settlement date. The Company has elected the fair value option for these instruments to reflect more accurately market and economic events in its earnings and to mitigate a potential mismatch in earnings caused by using different measurement attributes (i.e. fair value versus carrying value) for certain assets and liabilities. As of December 31,2018, the Company did not have any repurchase agreements and reverse repurchase agreements that do not settle overnight or have an open settlement date. Derivative Instruments and Hedgin Activities The Company transacts, on a limited basis, in exchange traded and over-the-counter derivatives for both asset and liability management as well as for trading and investment purposes. Risks managed using derivative instruments include interest rate risk and, to a lesser extent, foreign exchange risk. All derivative instruments are measured at fair value and are recognized as either assets or liabilities on the consolidated statement of financial condition. Foreign excha ge hedges From time to time, the Company also utilizes forward and options contracts to hedge the foreign currency risk associated with compensation obligations to Oppenheimer Israel (OPCO) Ltd. employees denominated in New Israeli Shekel (" IS"). Such hedges have not been designated as accounting hedges. Unrealized gains and losses on foreign exchange forward contracts are recorded in other assets on the consolidated statement of financial condition. De ivatives sed for trading a d i vestment purposes Futures contracts represent commitments to purchase or sell securities or other commodities at a future date and at a specified price. Market risk exists with respect to these instruments. Notional or contractual amounts are used to express the volume of these transactions and do not represent the amounts potentially subject to market risk. The Company uses futures contracts, including U.S. Treasury notes. Federal Funds, General Collateral futures and Eurodollar contracts pri arily as an economic hedge of interest rate risk associated with government trading activities. Unrealized gains and losses on futures contracts are recorded on the consolidated statement of financial condition in payable to brokers, dealers and clearing organizations. To-be-an ou ced sec rities The Company also transacts in pass-through mortgage-backed securities eligible to be sold in the TB A market as economic hedges against mortgage-backed securities that it owns or has sold but not yet purchased. TB As provide for the forward or del yed delivery of the underlying instrument with settlement up to 180 days. The contractual or notional amounts related to these financial instruments reflect the volume of activity and do not reflect the amounts at risk. Net unrealized g ins and losses on TBAs are recorded on the consolidated statement of financial condition in receivable from brokers, dealers and clearing organizations or payable to brokers, dealers and clearing organizations. 19 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 The notional amounts and fair values of the Company's derivatives as of December 31,2018 by product were as follows: (Expressed in tho sands) Fair Val e of Derivative Instruments Description Notional Fair Value Assets: Derivatives not designated as hedging instruments Other contracts TBAs $ 729,500 $: 4;.873 $ 729,500 $ 4,873 Liabili ies: Derivatives not designated as hedging instruments Commodity contracts ¦¦'Futures' / $ 4,580.800 $807 Other contracts Foreign exchange forward contracts 200 4 Other contracts TBAs 729,500 4,873 ARS purchase commitments 7,305 f:$ :5,3T 05 $/ / 1,096 6,780 (1) See "Derivative Instruments and Hedging Activities" above for a description of derivative financial instruments. Such derivate instruments are not subject to master netting agreements, thus the related amounts are not offset. 5. Collateralized transactions The Co any enters into collateralized borrowing and lending transactions in order to meet customers' needs and earn residual interest rate spreads, obtain securities for settlement and finance trading inventory positions. Under these transactions, the Company either receives or provides collateral, including U.S. Government and Agency, asset-backed, corporate debt, equity, and non-U.S. Government and Agency securities. The Company obtains short-term borrowings primarily through bank call loans. Bank call loans are generally payable on demand and bear interest at various rates. As of December 31, 2018, bank call loans were $15.0 million. As of December 31, 2018, such loans were collateralized by firm and/or customer securities with market values of approximately $18.6 million and $1.6 million, respectively, with commercial banks. As of December 31, 2018, the Company had approximately $1.0 billion of customer securities under customer margin loans that are available to be pledged, of which the Company has re-pledged approxi ately $112.6 million under securities loan agreements. As of December 31, 2018, the Company had pledged $460.2 million of customer securities directly with the Options Clearing Corporation to secure obligations and margin requirements under option contracts written by customers. As of December 31,2018, the Company had no outstanding letters of credit. The Company enters into reverse repurchase agreements, repurchase agreements, securities borrowed and securities loaned transactions to, among other things, acquire securities to cover short positions and settle other securities obi igations, to accommodate customers' needs and to finance the Company's inventory positions. Except as described below, repurchase and reverse repurchase agreements, principally involving U.S. Government and Agency securities, are carried at amounts at which the securities subsequently will be resold or reacquired as specified in the respective agreements and include accrued interest. 20 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 Repurchase agreements and reverse repurchase agreements are presented on a net-by-counterparty basis, when the repurchase agreements and reverse repurchase agreements are executed with the same counterparty, have the same explicit settlement date, are executed in accordance with a master netting a rangement, the securities underlying the repurchase agreements and reverse repurchase agreements exist in "book entry" form and certain other requirements are met. The following table presents a disaggregation of the gross obligation by the class of collateral pledged and the remaining contractual maturity of the repurchase agreements and securities loaned transactions as of December 31, 2018: (Expressed hi tho ands) Overnight and Open Repurchase agreements:: : ¦ '.-A' U.S. Government and Agency securities $566,357 Securities loaned:¦ A-A . Equity securities 146,815 Gross a ount of recognized liabilities for repurch se agreements and securities loaned: i 713,172 The following tables presentthe gross amounts and the offsetting amounts ofreverse repurchase agreements, repurchase agreements, securities borrowed and securities loaned transactions as of December 31,2018: (Expressed in tho sa ds) Reverse epurchase agreements Securities borrowed Total Gross Amounts Not Offset on the Consolidated Statement of Financial Condition Gross A ounts of Gross Amounts Offset on the Consolidated State ent of Net Amounts of Assets Presented on the Consolidated Statement of Cash Recognized Assets Financial Condition Financi l Condition Financial Instruments Collateral Received Net Amount $ 82,429 $(82,139)$290 $ 290 108,144 108,144 (105,960)2,184 $ V 1 0,573 $, (82,13 ) ; 108,434.$ (105,960)$ 2,474 (1) Included in receivable from brokers, dealers and clearing organizations on the consolidated statement of financial condition. (E pressed in tho sands) Repurchase agree ents Securities loaned Total Gross Amounts Not Offset on the Consolidated Statement of Financial Condition Gross A ounts of Gross Amounts Offset on the Consolidated Statement of Net A ounts of Liabilities Presented on the Consolidated Statement of Cash RecognizedLiabilities Financial Condition Financial Condition Financial Instruments Collateral Pledged Net Amount $ ;566,357 $ (82,13 )$.484,218 $::(480 322)$ ,896 146,815 146,815 (139,232)7,583 $ 3 713,17 $ (82,139).$631,033 $ (619,554)$ 11,479 (2) Included in payable to brokers, dealers and clearing organizations on the consolidated statement of financial condition. 21 Oppenheimer & Co. Inc. and Snbsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 The Company elected the fair value option for those repurchase agreements and reverse repurchase agreements that do not settle overnight or have an open settlement date. As of Dece ber 31,2018, the Company did not have any repurchase agreements and reverse repurchase agreements that do not settle overnight or have an open settlement date. The Company receives collateral in connection ith securities borrowed and reverse repurchase agreement transactions and customer margin loans. Under many agreements, the Company is permitted to sell or re-pledge the securities received (e.g., use the securities to enter into securities lending transactions, or deliver to counterparties to cover short positions). As ofDecember 31, 2018, the fair value of securities received as collateral under securities borrowed transactions and reverse repurchase agreements was $104.9 million and $83.0 million, respectively, of which the Company has sold and re-pledged approxi ately $27.6 million under securities loaned transactions and $83.0 million under repurchase agreements. The Company pledges certain of its securities owned for securities lending and repurchase agreements and to collateralize bank call loan transactions. The carrying value of pledged securities owned that can be sold or re-pledged by the counterparty was $518.0 million, as presented on the face of the consolidated state ent of financial condition as ofDecember 31,2018. The carrying value of securities owned by the Company that have been loaned or pledged to counterparties where those counterparties do not have the right to sell or re-pledge the collateral was $20.2 million as ofDecember 31, 2018. The Company manages credit exposure arising fro repurchase and reverse repurchase agreements by, in appropriate circumstances, entering into master netting agreements and collateral arrangements with counterparties that provide the Company, in the event of a customer default, the right to liquidate securities and the right to offset a counterparty's rights and obligations. The Company manages market risk of repurchase agreements and securities loaned by monitoring the arket value of collateral held and the market value of securities receivable from others. It is the Company's policy to request and obtain additional collateral when exposure to loss exists. In the event the counterparty is unable to meet its contractual obligation to return the securities, the Company may be exposed to off-balance sheet risk of acquiring securities at prevailing arket prices. Credit Concentrations Credit concentrations may arise from trading, investing, underwriting and financing activities and may be impacted by changes in economic, industiy or political factors. In the normal course of business, the Company may be exposed to credit risk in the event customers, counterparties including other brokers and dealers, issuers, banks, depositories or clearing organizations are unable to fulfill their contractual obligations. The Company seeks to mitigate these risks by actively monitoring exposures and obtaining collateral as deemed appropriate. Included in receivable from brokers, dealers and clearing organizations as ofDecember 31,2018 are receivables from five major U.S. broker-dealers totaling approximately $86.2 million. The Co pany is obligated to settle transactions with brokers and other financial institutions even if its clients fail to meet their obligations to the Company. Clients are required to complete their transactions on the settlement date, generally one to two business days after the trade date. If clients do not fulfill their contractual obligations, the Company may incur losses. The Company has clearing/participating arrangements with the National Securities Clearing Corporation, the Fixed Income Clearing Corporation ("FICC"), R.J. O'Brien & Associates (commodities transactions), Mortgage-Backed Securities Division (a division of FICC) and others. With respect to its business in reverse repurchase and repurchase agreements, substantially all open contracts as of December 31,2018 are with the FICC. The clearing organizations have the right to charge the Company for losses that result from a client's failure to fulfill its contractual obligations. Accordingly, the Company has credit exposures with these clearing brokers. The clearing brokers can re-hypothecate the securities held on behalf of the Co pany. As the right to charge the Company has no maximum amount and applies to all trades executed through the clearing brokers, the Company believes there is no axi um amount assignable to this right. As of December 31,2018, the Company had recorded no liabilities with regard to this right. The Company's policy is to monitor the credit standing of the clearing brokers and banks with which it conducts business. 22 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 6. Variable interest entities The Company's policy is to consolidate all subsidiaries in which it has a controlling financial interest, as well as any VIEs where the Company is deemed to be the primaiy beneficiary, when it has the po er to ake the decisions that most significantly affect the economic perfor ance of the VIE and has the obligation to absorb significant losses or the right to receive benefits that could potentially be significant to the VIE. For funds that the Company has concluded are not VIEs, the Company then evaluates whether the fund is a partnership or similar entity. If the fund is a partnership or similar entity, the Company evaluates the fund under the partnership consolidation guidance. Pursuant to that guidance, the Company consolidates funds in which it is the general partner, unless presu ption of control by the Company can be overcome. This presu ption is overcome only hen unrelated investors in the fund have the substantive ability to liquidate the fund or otherwise remove the Company as the general partner without cause, based on a simple majority vote of unaffiliated investors, or have other substantive participating rights. If the presumption of control can be overcome, the Company accounts for its interest in the fund pursuant to the equity method of accounting. The Company serves as general partner of hedge funds and private equity funds that were established for the purpose of providing investment alternatives to both its institutional and qualified retail clients. The Company holds variable interests in these funds as a result of its right to receive management and incentive fees. The Company's investment in and additional capital commitments to these hedge funds and private equity funds are also considered variable interests. The Company's additional capital commitments are subject to call at a later date and are limited in amount. The Company assesses whether it is the primary beneficiary of the hedge funds and private equity funds in hich it holds a variable interest in the form of general partner interests. In each instance, the Company has determined that it is not the primary beneficia y and therefore need not consolidate the hedge funds or private equity funds. The subsidiaries' general partnership interests, additional capital commitments, and management fees receivable represent its maximum exposure to loss. The subsidiaries' general partnership interests and management fees receivable are included in other assets on the consolidated statement of financial condition. The following tables set forth the total VIE assets, the carrying value of the subsidiaries' variable interests, and the Company's maximum exposure to loss in Company-sponsored non-consolidated VIEs in which the Company holds variable interests and other non-consolidated VIEs in which the Company holds variable interests as of December 31,2018: (Expressed in tho ands) Ma,ximum Carrying Value of the Exposure _ , Com any's Variable Interest to Loss mTotal Capital Non-consolidated VIE Assets Assets® Liabilities Commitments VIEs Hedge funds : ’ 32,6511.$337 $:: f I. ®1337 Private equity funds 7,454 8 8 Total $ 40,105 .$ :’¦ 345.:®$ . 4 .-.a:’; ®:t 4 ® (1) Represents the total assets of the VIEs and does not represent the Company's interests in the VIEs. (2) Represents the Company's interests in the VIEs and is included in other assets on the consolidated statement of financial condition. 23 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 7. Furniture, equipment and leasehold improvements The components of furniture, equipment and leasehold improvements as of December 31,2018 are as follows: (Expressed i thousands) Furniture, fixtu es and equipment Leasehold improvements Total Less accumulated depreciation I'otal $ ' 54,171 23,680 77,851 (70,305) 7,54 8. Subordinated borro in s The subordinated loans are payable to the Company's indirect parent, E.A, Viner International Co. ("Viner"). Certain loans bear interest at 11-1/2% per annum. These loans are due: $3.8 million, November 29, 2019, $7.1 million, December 31,2019 and $1.6 million, June 25,2020 and are auto atically renewed for an additional year unless terminated by either party within seven months of their expiration. The subordinated loans are available in computing net capital under the Securities and Exchange Co mission's uniform net capital rule. These borrowings may be repaid only if, after giving effect to such repayment, the Company meets the Securities and Exchange Commission's net capital requirements. 9. Income taxes The Company is included in an affiliated group that files a consolidated Federal income ta return. The Company files state and local income tax returns on a separate company basis or as part of the affiliated group's unitary combined state filing, depending on the specific requirements of each state and local ju isdiction. The Company permanently reinvests eligible earnings of its foreign subsidiaries and, accordingly, does not accrue any U.S. income taxes that would arise if these earnings were repatriated. The unrecognized deferred tax liability associated ith the outside basis difference of its foreign subsidiaries is estimated at $2.9 million for those subsidiaries. The Compan has continued to reinvest permanently the excess earnings of Oppenheimer Israel (OPCO) Ltd. in its own business. With the passage of the TCJA, the Company will continue to review its historical treatment of these earnings to determine whether its historical practice will continue or whether a change is warranted. As of December 31, 2018, the Company has net deferred tax assets of $26.6 million. Included in deferred tax assets on a tax- effected basis are timing differences arising with respect to compensation and othe expenses not currently deductible for tax purposes and a net operating loss carryforwa d related to Oppenheimer Israel (OPCO) Ltd. (valued at $2.5 million on a tax-effected basis). The Company believes that realization of deferred tax assets arising from temporary differences in the U.S. taxing jurisdictions is more likely than not based on past income trends and expectations of futu e taxable income. The Company believes that realization of the deferred tax asset related to net operating loss carryforwards of its subsidiary, Oppenheimer Israel (OPCO) Ltd., is more likely than not based on past income trends and expectations of future taxable income. The net operating loss carries forward indefinitely and is not subject to expiration, provided that this subsidiar and its underlying businesses continue operating normally (as is anticipated). 24 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 The Company is included in the filing of income tax returns in the U.S. federal jurisdiction, and in various states, either as part of an affiliated filing group or on a stand-alone basis. The Company's open income tax years vary by Jurisdiction, but all income tax years are closed through 2008 for all significant jurisdictions. The Company re ularly assesses the likelihood of asse sments in each taxingjurisdiction within which it operates and has established ta reserves it believes are adequate in relation to any potential exposures. The Company has recorded unrecognized tax benefits of $ 1.1 million as of December 31,2018. Included in the balance of unrecognized tax benefits as of December 31,2018 is $852,900 of tax benefits that, if recognized, would affect the effective tax rate. The Company does not believe any unrecognized tax benefit ill significantly increase or decrease within twelve months. The Company records interest and penalties accruing on unrecognized tax benefits in loss before tax benefit as interest expense and other expense, respectively. For the year ended December 31,2018, the Company accrued income tax-interest of $96,630 on unrecognized tax benefits. As of December 31, 2018, the Company had an income tax-related interest payable of $317,355 on its consolidated statement of financial condition. 10. Employee compensation plans The Parent and the Company maintains various employee compensation plans for the benefits of the Company's employees and its affiliates. Two types of employee compensation are granted under share-based compensation and cash-based compensation plans. Share-based Compensation Oppenheimer Holdings Inc. 2014 Incentive Plan On February 26, 2014, the Company adopted the Oppenheimer Holdings Inc. 2014 Incentive Plan (the "OIP"). Pursuant to the OIP, the Compensation Committee of the Board of Directors of the Parent (the "Committee") is permitted to grant options to purchase Class A Stock ("stock options"). Class A Stock a ard a d restricted Class A Stock (collectively "rest icted stock awards") to or fo the benefit of employees and non-employee director of the Company and its affiliates as part of their compen ation. Stock options are generally granted for a five-year term and generally vest at the rate of 25% of the amount granted on the second anniversary of the grant, 25% on the third anniversary of the grant, 25% on the fourth anniversary of the grant and 25% six months before expiration. Restricted stock awards are generally awarded for a three or five year term and fully vest at the end of the ter . Oppenheimer Holdings Inc. Stock Appreciation Right Plan Under the Oppenheimer Holdings Inc. Stock Appreciation Ri ht Plan, the Com ittee awards stock appreciation rights ("OARs") to certain employees as part of their compensation package based on a formula reflecting gross production and length of service. These awards a e granted once per year in January with espect to the prior year's production. The OARs vest five years from grant date and settle in cash at vesting. 25 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 Restricted stock - The Company has granted restricted stock awards pursuant to the OIP. The follo ing table summarizes the status of the Company's non-vested restricted Class A Stock awards under the OIP for the year ended December 31,2018: Number of Class A Shares Subject to Weighted Remaining Restricted Stock Average Fair Contractual Awards Value Life Nonvested at be inning of year : :7S4, i1 16.17 2.2 Years Granted 269,209 26.06 2.9 Years Vested . ,¦(10,000)23 06 Forfeited (71,566)16.60 Nonvested at end of year 981,769 ;'¦; CkTs .::1.7 Years As of December 31, 2018, all outstanding restricted Class A Stock awards were non-vested. The aggregate intrinsic value of restricted Class A Stock a ards outstanding as of December 31,2018 was $25,1 million. As of December 31, 2018, there was $8.8 million of total unrecognized compensation cost related to unvested restricted Class A Stock awards. The cost is expected to be recognized over a weighted average period of 1.7 years. As of December 31,2018, the number of shares of Class A Stock available under the share-based compensation plans, but not yet awarded, was 811,937. On January 31,2019, the Committee awarded a total of 306,208 restricted shares of Class A Stock to current employees pursuant to the OIP. Of these restricted shares, 145,818 shares will cliff vest in three years and 160,390 shares will cliff vest in five years. These awards will be expensed over the applicable three or five year vesting period. Stock options - The Committee has granted stock options pursuant to the OIP, There were 15,573 options outstanding as of December 31,2018. On January 31, 2019, the Committee awarded a total of 3,578 options to purchase Class A Stock to current employees pursuant to the OIP. These options will be expensed over 4.5 years (the vesting period). OARs - The Committee has awarded OARs pursuant to the Oppenheimer Holdings Inc. Stock Appreciation Right Plan. The following table summarized the status of the Company's outstanding OARs awards as of December 31,2018: Grant Date N umber ofOARs Outstanding strike Price Re aining ContractualLife Fair Value as of Dece ber 31,2018 January 14,2014 78,460 A;: : A 23:48; ¦13 Days $ 2.11 January 9, 2015 428,920 21.94 1 Year 4.87 January 6, 2016 425,900 15.89 2 Years 9.90 January 6, 2017 409,660 18.90 3 Years 8.32 January 5, 2018 ( 482,720:27.05 '4 Years 5.96 Total weighted average values 2,125,660 $ 21.58 ' 2.1 Year $ 30 26 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 The fair value as of December 31, 2018 for each OARs was esti ated using the Black-Scholes model with the following assumptions: Grant Date Janu ry 14, 2014 January 9, 2015 Januai 6, 2016 January 6, 2017 January 5, 2018 Ex ected term 13 Days 1 Year 2 Years 3 Years 4 Years Expected volatility factor 28.2%27.6%26.7%29.0%33.0% Risk-free interest rate ¦ ' 1.2% ''2.6%¦ ¦fi ; 2.5% A ' Actual dividends $ 0.44 $0.44 $0.44 $0.44 $0.44 (1) The expected term was determined based on the remaining life of the actual awards. (2) The volatility factor was measured using the weighted average of historical daily price changes of the Parent's Class A Stock over a historical period commensurate to the expected ter of the awards. (3) The isk-free interest rate was based on periods equal to the expected ter of the awards based on the U.S. Treasury yield curve in effect at December 31, 2018. (4) Actual dividends of the Parent were used to compute the expected annual dividend yield. As of December 31, 2018, 2,125,660 of outstanding OARs were unvested and nil ere vested. As of December 31, 2018, the aggregate intrinsic value of OARs outstanding was $9.2 million. The liability related to the OARs was $6.9 million as of December 31,2018. As of December 31,2018, the e was $6.5 million oftotal unrecognized compensation cost related to unvested OARs. The cost is expected to be recognized over a weighted average period of 2.1 years. On January 11, 2019, 560,156 OARs were awarded to Oppenheimer employees related to fiscal 2018 performance. These OARs will be expensed over 5 years (the vesting period). Cash-based Compensation Plan Defined Contribution Plan The Company maintains a defined contribution plan covering substantially all full-time U.S. employees. The Oppenheimer & Co. Inc. 401(k) Plan provides that Oppenheimer may make discretionary contributions. Eligible Oppenheimer employees could make voluntary contributions which could not exceed $18,500 per annum in 2018. Deferred Compensation Plans The Co pany maintains an Executive Deferred Compensation Plan ("EDCP") and a Deferred Incentive Plan ("DIP") in order to offer certain qualified high-performing financial advisers a bonus based upon a formula reflecting years of service, production, net commissions and a valuation of their clients' assets. The bonus a ounts resulted in deferrals in fiscal 2018 of $9.4 million. These deferr ls nor ally vest after five years. The liability is being recognized on a straight-line basis over the vesting period. The EDCP also includes voluntary deferrals by senior executives that are not subject to vesting. The Com any maintains a Company- owned life insurance polic} , which is designed to offset approximately 60% of the EDCP liability. The EDCP liability is being tracked against the value of a benchmark investment portfolio held for this purpose. As of December 31, 2018, the Company's liability with respect to the EDCP and DIP totaled $46.5 million and is included in accrued compensation on the consolidated statement of financial condition as of December 31, 2018. In addition, the Company is maintaining a deferred compensation plan on behalf of certain employees who were fonnerly employed by CIBC World Markets. The liability is being tracked against the value of an investment portfolio held by the Com any for this purpose and, therefore, the liability fluctuates with the fair value of the underlying portfolio. As of December31, 2018, the Company's liability with respect to this plan totaled $15.6 million. 27 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 11. Commitments and contin encies Commitments The Company and its subsidiaries have operating leases for office space, equipment and furniture an fixtures expiring at various dates through 2034. Future minimum rental commitments under such office and equipment leases as of December 31, 2018 are as follows; (Expressed i thousa ds) 2019 $ 38,591 2020 35,871 2021 32,141 2022 29,049 023 2024 and thereafter 114,256 The above table includes operating leases which have been signed by the Company's i mediate parent, Viner Finance Inc., in which the Company is allocated for rent charges associated with its occupancy. Certain of the leases contain provisions for rent increases based on changes in costs incurred by the lessor. As of December 31,2018, the Company had no collateralized or uncollateralized lette s of credit outstanding. Contin encies Many aspects of the Co pany's business involve substantial risks of liability. In the normal course of business, the Company has been named as defendant or co-defendant in various legal actions, including arbitrations, class actions and other litigation, creating substantial exposure and periodic expenses. Certain of the actual or threatened legal atters include clai s for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. These proceedings arise primarily from securities brokerage, asset management and investment banking activities. The Company is also involved, from time to time, in other reviews, investigations and proceedings (both formal and informal) by governmental and self-regulatory agencies regarding the Company's business which ay result in expenses, adverse judgments, settlements, fines, penalties, injunctions or other relief. The investigations include inquiries from the Securities and Exchange Commission (the "SEC"), the Financial Industry Regulatory Authority ("FINRA") and various state regulators. The Company accrues for estimated loss contingencies related to legal and regulatory matters when available information indicates that it is probable a liability had been incurred and the Co pany can reasonably estimate the a ount of that loss. In many proceedings, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the a ount of any loss. 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. 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. Counsel may be required to review, analyze and resolve numerous issues, including through potentially lengthy discoveiy and determination of i portant factual matters, and by addressing novel or unsettled legal questions relevant to the proceedings in question, before the Company can reasonably estimate a loss or range of loss or additional loss for the proceeding. Even afte lengthy review and analysis, the Company, in many legal and regulatory proceedings, may not be able to reasonably estimate possible losses or range of loss. 28 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 For certain other legal and regulatory proceedings, the Company can estimate possible losses, or range of loss in excess of amounts accrued, but does not believe, based on current knowledge and after consultation with counsel, that such losses individually, or in the aggregate, will have a material adverse effect on the Company's consolidated statement of financial condition as a whole. 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 $0 to $30,0 million. This estimated aggregate range is based upon currently available information for those legal proceedings in which the Company is involved, where the Company can make an estimate for such losses. For certain cases, the Company does not believe that it can make an estimate. The foregoing aggregate estimate is based on various factors, including the varying stages of the proceedings (including the fact that many are currently in preliminary stages), the numerous yet-unresolved issues in many of the proceedings and the attendant uncertainty of the various potential outcomes of such proceedings. Accordingly, the Company's estimate will change from time to time, and actual losses may be more than the current estimate. In February 2010, Oppenheimer finalized settlements with the Regulators concluding investigations and administrative proceedings by the Regulators concerning Oppenheimer's marketing and sale of ARS. Pursuant to the settlements with the Regulators, Oppenheimer agreed to extend offers to repurchase ARS from certain of its clients subject to certain ter s and conditions more fully described below. As of December 31, 2018, the Company had no outstanding ARS purchase commitments related to the settlements with the Regulators. In addition to the settlements with the Regulators, Oppenheimer has also reached settlements of and received adverse awards in legal proceedings with various clients where the Company is obligated to purchase ARS. Pursuant to completed Purchase Offers (as defined) under the settlements with the Regulators and client related legal settlements and awards to purchase ARS, as of December 31,2018, the Company purchased and holds (net of redemptions) approximately $40.7 million in ARS from its clients. In addition, the Company is com itted to purchase another $7.3 million in ARS from clients through 2020 under legal settlements and awards. The Company's purchases of ARS from its clients holding ARS eligible for repurchase will, subject to the terms and conditions of the settlements with the Regulators, continue on a periodic basis. Pursuant to these terms and conditions, the Company is required to conduct a financial review every six months, until the Company has extended Purchase Offers to all Eligible Investors (as defined), to determine whether it has funds avai lable, after giving effect to the financial and regulatory capital constraints applicable to the Company, to extend additional Purchase Offers. There are no predetermined uantitative thresholds or formulas used for detennining the final agreed upon amount for the Purchase Offers. Upon completion of the financial review, the Company first meets with its primary regulator, FINRA, and then with representatives of the NYAG and other regulators to present the results of the review and to finalize the amount of the next Purchase Offer and discuss offer scenarios in terms of which Eligible Investors should receive a Purchase Offer. Once various Purchase Offer scenarios have been discussed, the regulators, not the Company, make the final determination of which Purchase Offer scenario to implement. The terms of the settlements provide that the amount of ARS to be purchased during any period shall not risk placing the Company in violation of regulatory requirements. Eligible Investors for future buybacks continued to hold approximately $7.5 million of ARS principal value as of Dece ber 31, 2018. It is reasonably possible that some ARS Purchase Offers will need to be extended to Eligible Investors holding ARS prior to redemptions (or tender offers) by issuers of the full amount that remains outstanding. The potential additional losses that may result from entering into ARS purchase commitments with Eligible Investors for future buybacks represent the estimated difference between the principal value and the fair value. It is possible that the Company could sustain a loss of all or substantially all of the principal value of ARS still held by Eligible Investors but such an outcome is highly unlikely. The amount of potential additional losses resulting from entering into these commitments cannot be reasonably estimated due to the uncertainties surrounding the amounts and timing of future buybacks that result from the six-month financial review and the amounts, scope, and timing of future issuer redemptions and tender offers of ARS held by Eligible Investors. The range of potential additional losses related to valuation adjustments is between $0 and the amount of the estimated differential between the principal value and the fair value of ARS held by Eligible Investors for futu e buybacks that were not yet purchased or committed to be purchased by the Company at any point in time. The range of potential additional losses described here is not included in the estimated range of aggregate loss in excess of amounts accrued for legal and regulatory proceedings described above. 29 Oppenheitner & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 Outside of the settlements with the Regulators, the Company has also reached various legal settle ents with clients. As of December 31, 2018, there were no ARS purchase commitments related to legal settlements extending past 2020. Since August 2014, Oppenheimer has been responding to information requests from the SEC regarding the supervision of one of its former financial advisers ho was indicted by the United States Attorney's Office for the District of New Jersey in March 2014 on allegations of insider trading. Oppenheimer is continuing to cooperate with the SEC inquiry. Since September 2016, Oppenheimer has been responding to information requests from FI RA (including from FfNRA's Enforcement Department) regarding the supe vision of Oppenheimer's sale of unit investment trusts from 2011 to 2015. The inquiry is part of a larger targeted exa ination or "sweep" examination involving many other brokerage fir s. Oppenheimer is continuing to cooperate with the FI RA inquiry. On February 12,2018, the SEC Division of Enforcement ("Enforcement Division") announced the Share Class Selection Disclosure Initiative ("SCSD Initiative") pursuant to which investment advisers ere encouraged to self-report possible securities laws violations relating to the failure to make certain disclosures concerning mutual fund share class selection. On June 11, 2018, Oppenheimer and 0AM notified the Enforcement Division that it intended to participate in the SCSD Initiative. Oppenheimer and 0AM filed the information required by the SCSD Initiative on September 19, 2018. On Februaiy 7, 2019, Oppenhei er (and its affiliate Oppenheimer Asset Management, collectively "Oppenheimer") filed an Offer of Settlement with the SEC (the "Offer") pursuant to which Oppenhei er offered to disgorge approximately $3.5 million (the "Disgorge ent Amount") (including pre¬ judgment interest) of 12b-l fees and agree to certain undertakings including the following: (i) within 30 days of the entry of an SEC Order, review and correct as necessary all relevant disclosure documents concerning mutual fund share class selection and 12b-l fees; (ii) within 30 days of the entry of an SEC Order, evaluate whether existing clients should be moved to a lower-cost share class and ove clients as necessary; (iii) within 30 days of the entry of an SEC Order, evaluate, update (if necessary), and review for the effectiveness of their i plementation, Oppenheimer s policies and procedures so that they are reasonably designed to prevent violations of the Investment Advisers Act in connection with disclosures regarding mutual fund share class selection; (iv) within 30 days of the entry of an SEC Order, notify affected investors (i.e., those former and current clients who, during the relevant period of inadequate disclosure, purchased or held 12b-l fee paying share class mutual funds when a lower-cost share class of the same fund was available to the client) of the settlement terms of the O der in a clear and conspicuous fashion; and (v) within 40 days of the entry of an SEC Order, certify, in writing, compliance with the undertaking(s) set forth above. Oppenheimer is awaiting the entry of an SEC Order consistent with the above. 12. Re ulatory requirements The Company's U.S. broker dealer subsidiaries, Oppenheimer and Freedom, are subject to the uniform net capital requirements of the SEC under Rule 15c3-l (the "Rule") promulgated under the Securities Exchange Act of 1934. Oppenheimer computes its net capital requirements under the alternative method provided for in the Rule which requires that Oppenheimer maintain net capital equal to two percent of aggregate custo er-related debit items, as defined in SEC Rule 15c3-3. As of December 31, 2018, the net capital of Oppenheimer as calculated under the Rule was $194.5 million or 20.86% of Oppenheimer's aggregate debit items. This was $175.8 million in excess of the minimum required net capital at that date. Freedom co putes its net c pital requirement under the basic method provided for in the Rule, which requires that Freedom maintain net capital equal to the greater of $100,000 or 6-2/3% of aggregate indebtedness, as defined. As of December 31,2018, Freedom had net capital of $5.3 million, which was $5.2 million in excess of the $100,000 equired to be maintained at that date. 30 Oppenheimer & Co. Inc. and Snbsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2018 13. Related party transactions T e Company provides certain administrative and support services to other consolidated operating subsidiaries of the Parent. As of December 31,2018, the Company had amounts payable to affiliates who are consolidated operating subsidiaries of the Parent on the consolidated statement of financial condition. Included in other assets are amounts receivable from affiliates of $2.5 million and included in accounts payable and other liabilities are amounts due to affiliates of $114.9 million. As ofDecember 31,2018, the Company had inco e taxes payable of $64.9 million hich are comprised of payables to affiliates related to consolidated income tax liabilities. The Co pany re its payments for income taxes on behalf of its affiliates. Payments for income taxes are reimbursable by the affiliates. The amounts payable to affiliates presented above are gross amounts that have not been netted for direct expenses that reside at the affiliate and are unsecured, non-interest bearing and have no fixed terms of payment. The Company does not ake loans to its officers and directors except under normal commercial terms pursuant to client argin account agreements. These loans are fully collateralized by such employee-owned securities. 14. Subsequent events The Company has performed an evaluation of events that have occu red since December 31,2018 and through the date on which the consolidated statement of financial condition was issued, and determined that there are no events that have occurred that would require recognition or additional disclosure. 31 OPPENHEIMER & CO. INC. AND SUBSIDIARIES (S.E.C. I.D. No. 8-04077) CONSOLIDATED STATEMENT OF FINANCIAL CONDITION AS OF DECEMBER 31, 2017 AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ******** Page(s) Report of Independent Registered Public Accounting Firm. Consolidated Statement of Financial Condition.4 Notes to Consolidated Statement of Financial Condition.5 -31 Oppenheimer & Co. Inc. and Subsidiaries Table of Contents As of December 31, 2017 3 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholder of Oppenheimer & Co. Inc.: The accompanying notes are an integral part of the consolidated statement of financial condition. (Expressed in thousands, except number of shares and per share amounts) ASSETS Cash and cash equivalents $18,779 Deposits with clearing organizations (includes securities with a fair value of $34,293)41,843 Receivable from brokers, dealers and clearing organizations 187,115 Receivable from customers, net of allowance for credit losses of $769 847,947 Securities purchased under agreements to resell 658 Securities owned, including amounts pledged of $655,683, at fair value 919,138 Notes receivable, net of accumulated amortization and allowance for uncollectibles of $23,839 and $7,975, respectively 40,195 Furniture, equipment and leasehold improvements, net of accumulated depreciation of $67,589 6,057 Deferred income taxes, net 26,872 Other assets 116,977 Total assets $2,205,581 LIABILITIES AND STOCKHOLDER'S EQUITY Liabilities Drafts payable $42,412 Bank call loans 118,300 Payable to brokers, dealers and clearing organizations 211,483 Payable to customers 386,147 Securities sold under agreements to repurchase 586,478 Securities sold but not yet purchased, at fair value 94,486 Income tax payable 63,467 Accrued compensation 162,504 Accounts payable and other liabilities 182,110 Subordinated borrowings 112,558 Total liabilities 1,959,945 Commitments and contingencies (note 11) Stockholder's equity Common stock, par value $100 per share - 1,000 shares authorized; 760 shares issued and outstanding 76 Additional paid-in capital 301,957 Accumulated deficit (56,833) Accumulated other comprehensive income 1,794 Less 369 shares of treasury stock, at cost (1,358) Total stockholder's equity 245,636 Total liabilities and stockholder's equity $2,205,581 Oppenheimer & Co. Inc. and Subsidiaries Consolidated Statement of Financial Condition As of December 31, 2017 4 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 5 1.Organization Oppenheimer & Co. Inc. (the "Company" and "Oppenheimer") is a wholly owned subsidiary whose ultimate parent is Oppenheimer Holdings Inc. (the "Parent"), a Delaware public corporation. The Company is a New York-based registered broker-dealer in securities under the Securities Exchange Act of 1934 ("the Act") and is a member firm of the Financial Industry Regulatory Authority. The Company is also a registered introducing broker with the Commodities Futures Trading Commission and is a member of the National Futures Association. The Company is also a member of Intercontinental Exchange, Inc., known as ICE Futures U.S., and various exchanges, including the New York Stock Exchange, Inc. The Company engages in a broad range of activities in the securities industry, including retail securities brokerage, institutional sales and trading, investment banking (both corporate and public finance), underwritings, research, market-making, and investment advisory and asset management services. The Company provides its services from offices located throughout the United States. In addition, the Company conducts business in Israel and Latin America. 2.Summary of significant accounting policies and estimates Basis of Presentation The consolidated statement of financial condition of the Company includes the accounts of the Company's wholly owned subsidiaries: Freedom Investments, Inc. ("Freedom"), a registered broker-dealer in securities, which provides on-line investing as well as discount brokerage services; Oppenheimer Israel (OPCO) Ltd., which is engaged in offering investment services in the State of Israel; Pace Securities, Inc. ("Pace"), Prime Charter Ltd., Old Michigan Corp. and Subsidiaries (inactive), and Reich & Co., Inc. (in liquidation). This consolidated statement of financial condition has been prepared in conformity with accounting principles generally accepted in the United States of America. Intercompany transactions and balances have been eliminated in the preparation of the consolidated statement of financial condition. Use of Estimates The preparation of the consolidated statement of financial condition in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated statement of financial condition. In presenting the consolidated statement of financial condition, management makes estimates regarding valuations of financial instruments, loans and allowances for credit losses, the outcome of legal and regulatory matters, goodwill, stock-based compensation plans, and income taxes. Estimates, by their nature, are based on judgment and available information. Therefore, actual results could be materially different from these estimates. A discussion of certain areas in which estimates are a significant component of the amounts reported on the consolidated statement of financial condition follows. Financial Instruments and Fair Value Financial Instruments Securities owned, securities sold but not yet purchased, investments and derivative contracts are carried at fair value. Fair Value Measurements Accounting guidance for the fair value measurement of financial assets, which defines fair value, establishes a framework for measuring fair value, establishes a fair value measurement hierarchy, and expands fair value measurement disclosures. Fair value, as defined by the accounting guidance, is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy established by this accounting guidance prioritizes the inputs used in valuation techniques into the following three categories (highest to lowest priority): Level 1:Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets; Level 2:Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly; and Level 3:Unobservable inputs that are significant to the overall fair value measurement. The Company's financial instruments that are recorded at fair value generally are classified within Level 1 or Level 2 within the fair value hierarchy using quoted market prices or quotes from market makers or broker-dealers. Financial instruments classified within Level 1 are valued based on quoted market prices in active markets and consist of U.S. Treasury and Agency securities, corporate equities, and certain money market instruments. Level 2 financial instruments primarily consist of investment grade and high-yield corporate debt, convertible bonds, mortgage and asset-backed securities, and municipal obligations. Financial instruments classified as Level 2 are valued based on quoted prices for similar assets and liabilities in active markets and quoted prices for identical or similar assets and liabilities in markets that are not active. Some financial instruments are classified within Level 3 within the fair value hierarchy as observable pricing inputs are not available due to limited market activity for the asset or liability. Such financial instruments include certain distressed municipal securities, and auction rate securities ("ARS"). Fair Value Option The Company has the option to measure certain financial assets and financial liabilities at fair value with changes in fair value recognized in earnings each period. The Company may make a fair value option election on an instrument-by-instrument basis at initial recognition of an asset or liability or upon an event that gives rise to a new basis of accounting for that instrument. Consolidation The Company consolidates all subsidiaries in which it has a controlling financial interest, as well as any variable interest entities ("VIEs") where the Company is deemed to be the primary beneficiary, when it has the power to make the decisions that most significantly affect the economic performance of the VIE and has the obligation to absorb significant losses or the right to receive benefits that could potentially be significant to the VIE. The Company reviews factors, including the rights of the equity holders at risk and obligations of equity holders to absorb losses or receive expected residual returns, to determine if the entity is a VIE. In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly or indirectly by the Company. Under Accounting Standards Update ("ASU") 2015-02, a general partner will not consolidate a partnership or similar entity under the voting interest model. See note 6 for further details. Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 6 Financing Receivables The Company's financing receivables include customer margin loans, securities purchased under agreements to resell ("reverse repurchase agreements"), and securities borrowed transactions. The Company uses financing receivables to extend margin loans to customers, meet trade settlement requirements, and facilitate its matched-book arrangements and inventory requirements. The Company's financing receivables are secured by collateral received from clients and counterparties. In many cases, the Company is permitted to sell or re-pledge securities held as collateral. These securities may be used to collateralize securities sold under agreements to repurchase ("repurchase agreements"), to enter into securities lending agreements, to cover short positions or fulfill the obligation of securities fails to deliver. The Company monitors the market value of the collateral received on a daily basis and may require clients and counterparties to deposit additional collateral or return collateral pledged, when appropriate. Customer receivables, primarily consisting of customer margin loans collateralized by customer-owned securities, are stated net of allowance for credit losses. The Company reviews large customer accounts that do not comply with the Company's margin requirements on a case-by-case basis to determine the likelihood of collection and records an allowance for credit loss following that process. For small customer accounts that do not comply with the Company's margin requirements, the allowance for credit loss is generally recorded as the amount of unsecured or partially secured receivables. The Company also makes loans to financial advisers as part of its hiring process. These loans are recorded as notes receivable on its consolidated statement of financial condition. Allowances are established on these loans if the financial adviser is no longer associated with the Company and the loan has not been promptly repaid. Legal and Regulatory Reserves The Company records reserves related to legal and regulatory proceedings in accounts payable and other liabilities. The determination of the amounts of these reserves requires significant judgment on the part of management. In accordance with applicable accounting guidance, the Company establishes reserves for litigation and regulatory matters where available information indicates that it is probable a liability had been incurred and the Company can reasonably estimate the amount of that loss. When loss contingencies are not probable or cannot be reasonably estimated, the Company does not establish reserves. When determining whether to record a reserve, management considers many factors including, but not limited to, the amount of the claim; the stage and forum of the proceeding, the sophistication of the claimant, the amount of the loss, if any, in the client's account and the possibility of wrongdoing, if any, on the part of an employee of the Company; the basis and validity of the claim; previous results in similar cases; and applicable legal precedents and case law. Each legal and regulatory proceeding is reviewed with counsel in each accounting period and the reserve is adjusted as deemed appropriate by management. Any change in the reserve amount is recorded in the results of that period. The assumptions of management in determining 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. Goodwill The Company defines a reporting unit as an operating segment. The Company has goodwill of $10.8 million which is included in other assets on the consolidated statement of financial condition. Goodwill of a reporting unit is subject to at least an annual test for impairment to determine if the estimated fair value of a reporting unit is less than its carrying amount. Goodwill of a reporting unit is required to be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Due to the volatility in the financial services sector and equity markets in general, determining whether an impairment of goodwill has occurred is increasingly difficult and requires management to exercise significant judgment. The Company's annual goodwill impairment analysis performed as of December 31, 2017 applied the following valuation methodologies: Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 7 In estimating the fair value of the reporting unit, the Company uses the market comparable approach. The market comparable approach is based on comparisons of the subject company to public companies whose stocks are actively traded ("Price Multiples") or to similar companies engaged in an actual merger or acquisition ("Precedent Transactions"). As part of this process, multiples of value relative to financial variables, such as earnings or stockholders' equity, are developed and applied to the appropriate financial variables of the subject company to indicate its value. Each of these standard valuation methodologies requires the use of management estimates and assumptions. In its Price Multiples valuation analysis, the Company uses various operating metrics of comparable companies, including revenues, after-tax earnings, and EBITDA as well as price-to-book value ratios at a point in time. The Company analyzes prices paid in Precedent Transactions that are comparable to the business conducted in the reporting unit. The Company weighs each of the valuation methods equally in its overall valuation. Given the subjectivity involved in selecting which valuation method to use, the corresponding weightings, and the input variables for use in the analyses, it is possible that a different valuation model and the selection of different input variables could produce a materially different estimate of the fair value of the reporting unit. Share-Based Compensation Plans As part of the compensation to employees and directors, the Company uses stock-based compensation, consisting of restricted stock, stock options and stock appreciation rights. In accordance with ASC Topic 718, "Compensation - Stock Compensation," the Company classifies the stock options and restricted stock awards as equity awards, which requires the compensation cost to be recognized in the consolidated statement of operations over the requisite service period of the award at grant date fair value and adjust for actual forfeitures. The fair value of restricted stock awards is determined based on the grant date closing price of the Parent's Class A non-voting common stock ("Class A Stock") adjusted for the present value of the dividend to be received upon vesting. The fair value of stock options is determined using the Black-Scholes model. Key assumptions used to estimate the fair value include the expected term and the expected volatility of the Parent's Class A Stock over the term of the award, the risk-free interest rate over the expected term, and the Parent's expected annual dividend yield. The Company classifies stock appreciation rights ("OARs") as liability awards, which requires the fair value to be remeasured at each reporting period until the award vests. The fair value of OARs is also determined using the Black-Scholes model at the end of each reporting period. Statement of Financial Condition Cash and Cash Equivalents The Company defines cash equivalents as highly liquid investments with original maturities of less than 90 days that are not held for sale in the ordinary course of business. Receivables from / Payables to Brokers, Dealers and Clearing Organizations Securities borrowed and securities loaned are carried at the amounts of cash collateral advanced or received. Securities borrowed transactions require the Company to deposit cash or other collateral with the lender. The Company receives cash or collateral in an amount generally in excess of the market value of securities loaned. The Company monitors the market value of securities borrowed and loaned on a daily basis and may require counterparties to deposit additional collateral or return collateral pledged, when appropriate. Securities failed to deliver and securities failed to receive represent the contract value of securities which have not been delivered or received, respectively, by settlement date. Securities Purchased under Agreements to Resell and Securities Sold under Agreements to Repurchase Reverse repurchase agreements and securities sold under agreements to repurchase ("repurchase agreements") are treated as collateralized financing transactions and are recorded at their contractual amounts plus accrued interest. Additionally, the Company elected the fair value option for repurchase agreements and reverse repurchase agreements that do not settle overnight or have an open settlement date. The Company can present the reverse repurchase and repurchase transactions on a net-by-counterparty basis when the specific offsetting requirements are satisfied. Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 8 Notes Receivable Notes receivable represent recruiting and retention payments generally in the form of upfront loans to financial advisers and key revenue producers as part of the Company's overall growth strategy. These notes amortize over a service period of 3 to 5 years from the initial date of the note or based on productivity levels of employees. All such notes are contingent on the employees' continued employment with the Company. The unforgiven portion of the notes becomes due on demand in the event the employee departs during the service period. Furniture, Equipment and Leasehold Improvements Furniture, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation of furniture, fixtures, and equipment is provided on a straight-line basis generally over 3-7 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the life of the improvement or the remaining term of the lease. Leases with escalating rents are expensed on a straight-line basis over the life of the lease. Landlord incentives are recorded as deferred rent and amortized, as reductions to lease expense, on a straight-line basis over the life of the applicable lease. Deferred rent is included in accounts payable and other liabilities on the consolidated statement of financial condition. Drafts Payable Drafts payable represent amounts drawn by the Company against a bank. Foreign Currency Translations Foreign currency balances have been translated into U.S. dollars as follows: monetary assets and liabilities at exchange rates prevailing at period end; and non-monetary assets and stockholders' equity at historical rates. The functional currency of the overseas operations in Tel Aviv, Israel is the local currency. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated statement of financial condition. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company recognizes deferred tax assets to the extent it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and the results of recent operations. The Company records uncertain tax positions in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740, "Income Taxes" on the basis of a two-step process whereby it determines 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, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company permanently reinvests eligible earnings of its foreign subsidiaries and, accordingly, does not accrue any U.S. income taxes that would arise if such earnings were repatriated. Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 9 On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "TCJA"). The TCJA makes broad and complex changes to the U.S. tax code. On the same date, the SEC staff issued Staff Accounting Bulletin ("SAB") 118 which provides guidance on accounting for the tax effects of the TCJA. SAB 118 provides a measurement period that should not extend beyond one year from the TCJA enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the TCJA for which the accounting under ASC 740 is complete. To the extent that a company's accounting for certain income tax effects of the TCJA is incomplete but the company is able to determine a reasonable estimate, it must record a provisional estimate in the consolidated statement of financial condition. If a company cannot determine a provisional estimate to be included in the consolidated statement of financial condition, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the TCJA. The Company has not completed its accounting for the income tax effects of certain elements of the TCJA. However, the Company was able to make reasonable estimates of the effects of certain elements and recorded a provisional estimate in the consolidated statement of financial condition. The estimated enactment net discrete after-tax expense incorporates assumptions made based upon the Company's current interpretations of the TCJA, and may change as it receives additional clarification and implementation guidance and as the interpretation of the TCJA evolves over time. The Company is expected to complete its analysis within the measurement period in accordance with SAB 118. See note 9, Income taxes. New Accounting Pronouncements Recently Issued In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers." The ASU outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Additionally, the ASU expands the disclosure requirements for revenue recognition. In 2016, the FASB additionally issued ASU 2016-08, ASU 2016-10, and ASU 2016-12, which provide further revenue recognition guidance related to principal versus agent considerations, performance obligations and licensing, and narrow-scope improvements and practical expedients. All of these standards are effective either retrospectively to each prior reporting period presented, or as a cumulative-effect adjustment as of the date of adoption, during interim and annual periods beginning after December 15, 2017. The Company has elected the modified retrospective method and will include any cumulative-effect adjustment as of the date of the adoption. The Company's implementation team performed an in-depth review of the Company's revenue streams and evaluated the impact of the adoption of these updates on the Company's financial condition, results of operations, cash flows, and disclosures. The Company completed the assessment and determined that the adoption of the new guidance will not have a material impact on the Company's consolidated statement of financial condition. The Company concluded that it will continue to recognize the upfront banking advisory fees (e.g., retainer and engagement fees) ratably over the service period. The new guidance will require underwriting expenses to be recorded on a gross basis while the current guidance requires recognizing underwriting revenues net of related underwriting expenses. In addition, the new guidance will require enhanced disclosures, including revenue recognition policies to identify performance obligations to customers and significant judgments in measurement and recognition. In January 2016, the FASB issued ASU 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities," which revises an entity's accounting related to the classification and measurement of investments in equity securities, changes the presentation of certain fair value changes relating to instrument specific credit risk for financial liabilities and amends certain disclosure requirements associated with the fair value of financial instruments. The ASU is effective for fiscal years beginning after December 15, 2017. The adoption of the ASU will not have a material impact on the Company's consolidated statement of financial condition. In February 2016, the FASB issued ASU 2016-02, "Leases." The ASU requires the recognition of a right-of use asset and lease liability on the balance sheet by lessees for those leases classified as operating leases under previous guidance. The ASU is effective for fiscal years beginning after December 15, 2018. The Company is currently evaluating the impact of adopting this ASU which it expects will have a material impact on its consolidated statement of financial condition. Since the Company has operating leases in over 100 locations, the Company expects to recognize a significant right-of use asset and lease liability on its consolidated statement of financial condition upon adoption of this ASU. Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 10 In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments," which amends the FASB's guidance on the impairment of financial instruments. The ASU adds to U.S. GAAP an impairment model ("current expected credit loss model"). Under this new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The ASU is effective for the fiscal year beginning after December 15, 2019. The Company will not early adopt this ASU. The Company is currently evaluating the impact of the ASU, but the adoption of the ASU is not expected to have a material impact on its consolidated statement of financial condition. In August 2016, the FASB issued ASU 2016-15, "Classification of Certain Cash Receipts and Cash Payments," which amends the guidance on the classification of certain cash receipts and payments in the statement of cash flow. The ASU is effective for the fiscal year beginning after December 15, 2017 and early adoption is permitted. The Company did not early adopt this ASU. The Company has evaluated the impact of the ASU and the adoption of the ASU is not expected to have a material impact on its consolidated statement of financial condition. In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other, Simplifying the Test for Goodwill Impairment," which simplifies the subsequent measurement of goodwill. Under this ASU, the Company will no longer be required to perform its Step 2 goodwill impairment test; instead, the Company should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The ASU is effective for the fiscal year beginning after December 15, 2019 and early adoption is permitted. The Company will not early adopt this ASU. The Company has evaluated the impact of the ASU and the adoption of the ASU is not expected to have a material impact on its consolidated statement of financial condition. In August 2017, the FASB issued ASU 2017-12, "Targeted Improvements to Accounting for Hedging Activities," which amends the hedge accounting recognition and presentation requirements. The ASU improves the transparency and understandability of information conveyed to financial statement users by better aligning companies' hedging relationship to their existing risk management strategies, simplifies the application of hedge accounting and increases transparency regarding the scope and results of the hedging program. The ASU is effective for the fiscal year beginning after December 15, 2019 and early adoption is permitted. The Company will not early adopt this ASU. The Company is currently evaluating the impact of the ASU, but the adoption of the ASU is not expected to have a material impact on its consolidated statement of financial condition. Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 11 3.Receivable from and payable to brokers, dealers and clearing organizations   (Expressed in thousands) As of December 31, 2017 Receivable from brokers, dealers and clearing organizations consists of: Securities borrowed $132,368 Receivable from brokers 19,298 Securities failed to deliver 9,442 Clearing organizations 24,361 Other 1,646 Total $187,115 Payable to brokers, dealers and clearing organizations consists of: Securities loaned $180,270 Payable to brokers 1,567 Securities failed to receive 17,559 Other 12,087 Total $211,483 4.Fair value measurements Securities owned, securities sold but not yet purchased, investments and derivative contracts are carried at fair value with changes in fair value recognized in earnings each period. Valuation Techniques A description of the valuation techniques applied and inputs used in measuring the fair value of the Company's financial instruments is as follows: U.S. Government Obligations U.S. Treasury securities are valued using quoted market prices obtained from active market makers and inter-dealer brokers. U.S. Agency Obligations U.S. agency securities consist of agency issued debt securities and mortgage pass-through securities. Non-callable agency issued debt securities are generally valued using quoted market prices. Callable agency issued debt securities are valued by benchmarking model-derived prices to quoted market prices and trade data for identical or comparable securities. The fair value of mortgage pass-through securities are model driven with respect to spreads of the comparable to-be-announced ("TBA") security. Sovereign Obligations The fair value of sovereign obligations is determined based on quoted market prices when available or a valuation model that generally utilizes interest rate yield curves and credit spreads as inputs. Corporate Debt and Other Obligations The fair value of corporate bonds is estimated using recent transactions, broker quotations and bond spread information. Mortgage and Other Asset-Backed Securities The Company holds non-agency securities collateralized by home equity and various other types of collateral which are valued based on external pricing and spread data provided by independent pricing services. When specific external pricing is not observable, the valuation is based on yields and spreads for comparable bonds. Municipal Obligations The fair value of municipal obligations is estimated using recently executed transactions, broker quotations, and bond spread information. Convertible Bonds The fair value of convertible bonds is estimated using recently executed transactions and dollar-neutral price quotations, where observable. When observable price quotations are not available, fair value is determined based on cash flow models using yield curves and bond spreads as key inputs. Corporate Equities Equity securities and options are generally valued based on quoted prices from the exchange or market where traded. To the extent quoted prices are not available, fair values are generally derived using bid/ask spreads. Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 12 Auction Rate Securities ("ARS") In February 2010, Oppenheimer finalized settlements with each of the New York Attorney General's office ("NYAG") and the Massachusetts Securities Division ("MSD" and, together with the NYAG, the "Regulators") concluding investigations and administrative proceedings by the Regulators concerning Oppenheimer's marketing and sale of ARS. Pursuant to the settlements with the Regulators, Oppenheimer agreed to extend offers to repurchase ARS from certain of its clients subject to certain terms and conditions more fully described below. As of December 31, 2017, the Company had no outstanding ARS purchase commitments related to the settlements with the Regulators. In addition to the settlements with the Regulators, Oppenheimer has also reached settlements of and received adverse awards in legal proceedings with various clients where the Company is obligated to purchase ARS. Pursuant to completed Purchase Offers (as defined) under the settlements with the Regulators and client-related legal settlements and awards to purchase ARS, as of December 31, 2017, the Company purchased and holds (net of redemptions) approximately $113.9 million in ARS from its clients. In addition, the Company is committed to purchase another $11.0 million in ARS from clients through 2020 under legal settlements and awards. The ARS positions that the Company owns and is committed to purchase primarily represent auction rate preferred securities issued by closed-end funds and, to a lesser extent, municipal auction rate securities which are municipal bonds wrapped by municipal bond insurance and student loan auction rate securities which are asset-backed securities backed by student loans. Interest rates on ARS typically reset through periodic auctions. Due to the auction mechanism and generally liquid markets, ARS have historically been categorized as Level 1 of the fair value hierarchy. Beginning in February 2008, uncertainties in the credit markets resulted in substantially all of the ARS market experiencing failed auctions. Once the auctions failed, the ARS could no longer be valued using observable prices set in the auctions. The Company has used less observable determinants of the fair value of ARS, including the strength in the underlying credits, announced issuer redemptions, completed issuer redemptions, and announcements from issuers regarding their intentions with respect to their outstanding ARS. The Company has also developed an internal methodology to discount for the lack of liquidity and non-performance risk of the failed auctions. Due to liquidity problems associated with the ARS market, ARS that lack liquidity are setting their interest rates according to a maximum rate formula. For example, an auction rate preferred security maximum rate may be set at 200% of a short-term index such as LIBOR or U.S. Treasury yield. For fair value purposes, the Company has determined that the maximum spread would be an adequate risk premium to account for illiquidity in the market. Accordingly, the Company applies a spread to the short-term index for each asset class to derive the discount rate. The Company uses short-term U.S. Treasury yields as its benchmark short-term index. The risk of non-performance is typically reflected in the prices of ARS positions where the fair value is derived from recent trades in the secondary market. The ARS purchase commitment, or derivative asset or liability, arises from both the settlements with the Regulators and legal settlements and awards. The ARS purchase commitment represents the difference between the principal value and the fair value of the ARS the Company is committed to purchase. The Company utilizes the same valuation methodology for the ARS purchase commitment as it does for the ARS it owns. Additionally, the present value of the future principal value of ARS purchase commitments under legal settlements and awards is used in the discounted valuation model to reflect the time value of money over the period of time that the commitments are outstanding. The amount of the ARS purchase commitment only becomes determinable once the Company has met with its primary regulator and the NYAG and agreed upon a buyback amount, commenced the ARS buyback offer to clients, and received notice from its clients which ARS they are tendering. As a result, it is not possible to observe the current yields actually paid on the ARS until all of these events have happened which is typically very close to the time that the Company actually purchases the ARS. For ARS purchase commitments pursuant to legal settlements and awards, the criteria for purchasing ARS from clients is based on the nature of the settlement or award which will stipulate a time period and amount for each repurchase. The Company will not know which ARS will be tendered by the client until the stipulated time for repurchase is reached. Therefore, the Company uses the current yields of ARS owned in its discounted valuation model to determine a fair value of ARS purchase commitments. The Company also uses these current yields by asset class (i.e., auction rate preferred securities, municipal auction rate securities, and student loan auction rate securities) in its discounted valuation model to determine the fair value of ARS purchase commitments. In addition, the Company uses the discount rate and duration of ARS owned, by asset class, as a proxy for the duration of ARS purchase commitments. Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 13 Additional information regarding the valuation technique and inputs for ARS used is as follows:    (1)Principal amount represents the par value of the ARS and is included in securities owned on the consolidated statement of financial condition as of December 31, 2017. The valuation adjustment amount is included as a reduction to securities owned on the consolidated statement of financial condition as of December 31, 2017. (2)Derived by applying a multiple to the spread between 110% to 150% to the U.S. Treasury rate of 2.09%. (3)Based on current yields for ARS positions owned. (4)Derived by applying a multiple to the spread of 175% to the U.S. Treasury rate of 2.15%. (5)Derived by applying the sum of the spread of 1.20% to the U.S. Treasury rate of 2.33%. (6)Principal amount represents the present value of the ARS par value that the Company is committed to purchase at a future date. This principal amount is presented as an off-balance sheet item. The valuation adjustment amount is included in accounts payable and other liabilities on the consolidated statement of financial condition as of December 31, 2017. (7)ARS issuer announced redemption at par to take place during the first quarter of 2018. Included in Level 2 of the fair value hierarchy. (8)ARS issuer announced tender offer at 95% of par. Included in Level 2 of the fair value hierarchy. (Expressed in thousands) Quantitative Information about ARS Level 3 Fair Value Measurements as of December 31, 2017 Product Principal Valuation Adjustment Fair Value Valuation Technique Unobservable Input Range Weighted Average Auction Rate Securities Owned (1) Auction Rate Preferred Securities $88,025 $1,318 $86,707 Discounted Cash Flow Discount Rate (2)2.30% to 3.13%2.74% Duration 4.0 Years 4.0 Years Current Yield (3)2.37% to 2.47%2.41% 11,725 —11,725 Par (7)N/A N/A N/A 13,400 670 12,730 Tender Offer (8)N/A N/A N/A Municipal Auction Rate Securities 425 23 402 Discounted Cash Flow Discount Rate (4)3.76%3.76% Duration 4.5 Years 4.5 Years Current Yield (3)2.41%2.41% Student Loan Auction Rate Securities 300 11 289 Discounted Cash Flow Discount Rate (5)3.53%3.53% Duration 7.0 Years 7.0 Years Current Yield (3)2.93%2.93% $113,875 $2,022 $111,853 Auction Rate Securities Commitments to Purchase (6) Auction Rate Preferred Securities $10,992 $8 $10,984 Discounted Cash Flow Discount Rate (2)2.30% to 3.13%2.74% Duration 4.0 Years 4.0 Years Current Yield (3)2.37% to 2.47%2.41% $10,992 $8 $10,984 Total $124,867 $2,030 $122,837 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 14 The fair value of ARS and ARS purchase commitments is particularly sensitive to movements in interest rates. Increases in short- term interest rates would increase the discount rate input used in the ARS valuation and thus reduce the fair value of the ARS (increase the valuation adjustment). Conversely, decreases in short-term interest rates would decrease the discount rate and thus increase the fair value of ARS (decrease the valuation adjustment). However, an increase (decrease) in the discount rate input would be partially mitigated by an increase (decrease) in the current yield earned on the underlying ARS asset increasing the cash flows and thus the fair value. Furthermore, movements in short term interest rates would likely impact the ARS duration (i.e., sensitivity of the price to a change in interest rates), which would also have a mitigating effect on interest rate movements. For example, as interest rates increase, issuers of ARS have an incentive to redeem outstanding securities as servicing the interest payments gets prohibitively expensive which would lower the duration assumption thereby increasing the ARS fair value. Alternatively, ARS issuers are less likely to redeem ARS in a lower interest rate environment as it is a relatively inexpensive source of financing which would increase the duration assumption thereby decreasing the ARS fair value. For example, see the following sensitivities:  •The impact of a 25 basis point increase in the discount rate at December 31, 2017 would result in a decrease in the fair value of $430,000 (does not consider a corresponding reduction in duration as discussed above). •The impact of a 50 basis point increase in the discount rate at December 31, 2017 would result in a decrease in the fair value of $856,000 (does not consider a corresponding reduction in duration as discussed above). These sensitivities are hypothetical and are based on scenarios where they are "stressed" and should be used with caution. These estimates do not include all of the interplay among assumptions and are estimated as a portfolio rather than as individual assets. Due to the less observable nature of these inputs, ARS is primarily categorized in Level 3 of the fair value hierarchy. As of December 31, 2017, the Company had a valuation adjustment (unrealized loss) of $2.0 million for ARS owned which is included as a reduction to securities owned on the consolidated statement of financial condition. As of December 31, 2017, the Company also had a valuation adjustment of $8,000 on ARS purchase commitments from legal settlements and awards which is included in accounts payable and other liabilities on the consolidated statement of financial condition. The total valuation adjustment was $2.0 million as of December 31, 2017. The valuation adjustment represents the difference between the principal value and the fair value of the ARS owned and ARS purchase commitments. Investments In its role as general partner in certain hedge funds and private equity funds, the Company, through its subsidiaries, holds direct investments in such funds. The Company uses the net asset value of the underlying fund as a basis for estimating the fair value of its investment. The following table provides information about the Company's investments in Company-sponsored funds as of December 31, 2017: (1)Includes investments in hedge funds and hedge fund of funds that pursue long/short, event-driven, and activist strategies. Each hedge fund has various restrictions regarding redemption; no investment is locked-up for a period greater than one year. (2)Includes private equity funds and private equity fund of funds with a focus on diversified portfolios, real estate and global natural resources. Due to the illiquid nature of these funds, investors are not permitted to make withdrawals without the consent of the general partner. The lock-up period of the private equity funds can extend to 10 years. (Expressed in thousands) Fair Value Unfunded Commitments Redemption Frequency Redemption Notice Period Hedge funds (1)$713 $—Quarterly - Annually 30 - 120 Days Private equity funds (2)12 1 N/A N/A $725 $1 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 15 Valuation Process The Company's Finance & Accounting ("F&A") group is responsible for the Company's fair value policies, processes and procedures. F&A is independent from the business units and trading desks and is headed by the Parent's Chief Financial Officer ("CFO"), who has final authority over the valuation of the Company's financial instruments. The Finance Control Group ("FCG") within F&A is responsible for daily profit and loss reporting, front-end trading system position reconciliations, monthly profit and loss reporting, and independent price verification procedures. For financial instruments categorized in Levels 1 and 2 of the fair value hierarchy, the FCG performs a monthly independent price verification to determine the reasonableness of the prices provided by the Company's independent pricing vendor. The FCG uses its third-party pricing vendor, executed transactions, and broker-dealer quotes for validating the fair values of financial instruments. For financial instruments categorized in Level 3 of the fair value hierarchy measured on a recurring basis, primarily for ARS, a group comprised of the Parent's CFO, the Controller, and an Operations Director are responsible for the ARS valuation model and resulting fair valuations. Procedures performed include aggregating all ARS owned by type from firm inventory accounts and ARS purchase commitments from regulatory and legal settlements and awards provided by the Legal Department. Observable and unobservable inputs are aggregated from various sources and entered into the ARS valuation model. For unobservable inputs, the group reviews the appropriateness of the inputs to ensure consistency with how a market participant would arrive at the unobservable input. For example, for the duration assumption, the group would consider recent policy statements regarding short-term interest rates by the Federal Reserve and recent ARS issuer redemptions and announcements for future redemptions. The model output is reviewed for reasonableness and consistency. Where available, comparisons are performed between ARS owned or committed to purchase to ARS that are trading in the secondary market. Assets and Liabilities Measured at Fair Value The Company's assets and liabilities, recorded at fair value on a recurring basis as of December 31, 2017, have been categorized based upon the above fair value hierarchy as follows: Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 16 Assets and liabilities measured at fair value on a recurring basis as of December 31, 2017   (1)Included in other assets on the consolidated statement of financial condition. (Expressed in thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents $10,490 $—$—$10,490 Deposits with clearing organizations 34,293 ——34,293 Securities owned: U.S. Treasury securities 634,025 ——634,025 U.S. Agency securities 3,011 6,873 —9,884 Sovereign obligations —608 —608 Corporate debt and other obligations —11,675 —11,675 Mortgage and other asset-backed securities —4,037 —4,037 Municipal obligations —89,522 35 89,557 Convertible bonds —23,216 —23,216 Corporate equities 33,900 ——33,900 Money markets 383 ——383 Auction rate securities —24,455 87,398 111,853 Securities owned, at fair value 671,319 160,386 87,433 919,138 Investments (1)——169 169 Derivative contracts: TBAs —716 —716 Total $716,102 $161,102 $87,602 $964,806 Liabilities Securities sold but not yet purchased: U.S. Treasury securities $53,425 $—$—$53,425 U.S. Agency securities —13 —13 Sovereign obligations —1,179 —1,179 Corporate debt and other obligations —4,357 —4,357 Mortgage and other asset-backed securities —10 —10 Convertible bonds —10,109 —10,109 Corporate equities 25,393 ——25,393 Securities sold but not yet purchased, at fair value 78,818 15,668 —94,486 Derivative contracts: Futures 766 ——766 TBAs —614 —614 ARS purchase commitments ——8 8 Derivative contracts, total 766 614 8 1,388 Total $79,584 $16,282 $8 $95,874 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 17 Financial Instruments Not Measured at Fair Value The table below presents the carrying value, fair value and fair value hierarchy category of certain financial instruments that are not measured at fair value on the consolidated statement of financial condition. The table below excludes non-financial assets and liabilities (e.g., furniture, equipment and leasehold improvements and accrued compensation). The carrying value of financial instruments not measured at fair value categorized in the fair value hierarchy as Level 1 or Level 2 (e.g., cash and receivables from customers) approximates fair value because of the relatively short term nature of the underlying assets. Assets and liabilities not measured at fair value as of December 31, 2017   (1)Included in other assets on the consolidated statement of financial condition.   (Expressed in thousands)Fair Value Measurement: Liabilities Carrying Value Level 1 Level 2 Level 3 Total Drafts payable $42,412 $42,412 $—$—$42,412 Bank call loans 118,300 —118,300 —118,300 Payables to brokers, dealers and clearing organizations: Securities loaned 180,270 —180,270 —180,270 Payable to brokers 1,567 —1,567 —1,567 Securities failed to receive 17,559 —17,559 —17,559 Other 10,707 —10,707 —10,707 210,103 —210,103 —210,103 Payables to customers 386,147 —386,147 —386,147 Securities sold under agreements to repurchase 586,478 —586,478 —586,478 Subordinated borrowings 112,558 —112,558 —112,558 (Expressed in thousands)Fair Value Measurement: Assets Carrying Value Level 1 Level 2 Level 3 Total Cash $8,289 $8,289 $—$—$8,289 Deposits with clearing organization 7,550 7,550 ——7,550 Receivable from brokers, dealers and clearing organizations: Securities borrowed 132,368 —132,368 —132,368 Receivables from brokers 19,298 —19,298 —19,298 Securities failed to deliver 9,442 —9,442 —9,442 Clearing organizations 24,361 —24,361 —24,361 Other 930 —930 —930 186,399 —186,399 —186,399 Receivable from customers 847,947 —847,947 —847,947 Securities purchased under agreements to resell 658 —658 —658 Notes receivable, net 40,195 —40,195 —40,195 Investments (1)65,404 —65,404 —65,404 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 18 Fair Value Option The Company elected the fair value option for repurchase agreements and reverse repurchase agreements that do not settle overnight or have an open settlement date. The Company has elected the fair value option for these instruments to more accurately reflect market and economic events in its earnings and to mitigate a potential mismatch in earnings caused by using different measurement attributes (i.e. fair value versus carrying value) for certain assets and liabilities. As of December 31, 2017, the Company did not have any reverse repurchase agreements and repurchase agreements for which the fair value option was elected. Derivative Instruments and Hedging Activities The Company transacts, on a limited basis, in exchange traded and over-the-counter derivatives for both asset and liability management as well as for trading and investment purposes. Risks managed using derivative instruments include interest rate risk and, to a lesser extent, foreign exchange risk. All derivative instruments are measured at fair value and are recognized as either assets or liabilities on the consolidated statement of financial condition. Foreign exchange hedges From time to time, the Company also utilizes forward and options contracts to hedge the foreign currency risk associated with compensation obligations to Oppenheimer Israel (OPCO) Ltd. employees denominated in New Israeli Shekel ("NIS"). Such hedges have not been designated as accounting hedges. Unrealized gains and losses on foreign exchange forward contracts are recorded in other assets on the consolidated statement of financial condition. Derivatives used for trading and investment purposes Futures contracts represent commitments to purchase or sell securities or other commodities at a future date and at a specified price. Market risk exists with respect to these instruments. Notional or contractual amounts are used to express the volume of these transactions and do not represent the amounts potentially subject to market risk. The futures contracts the Company used include U.S. Treasury notes, Federal Funds, General Collateral futures and Eurodollar contracts which are used primarily as an economic hedge of interest rate risk associated with government trading activities. Unrealized gains and losses on futures contracts are recorded on the consolidated statement of financial condition in payable to brokers, dealers and clearing organizations. To-be-announced securities The Company also transacts in pass-through mortgage-backed securities eligible to be sold in the TBA market as economic hedges against mortgage-backed securities that it owns or has sold but not yet purchased. TBAs provide for the forward or delayed delivery of the underlying instrument with settlement up to 180 days. The contractual or notional amounts related to these financial instruments reflect the volume of activity and do not reflect the amounts at risk. Unrealized gains and losses on TBAs are recorded on the consolidated statement of financial condition in receivable from brokers, dealers and clearing organizations and payable to brokers, dealers and clearing organizations, respectively. Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 19 The notional amounts and fair values of the Company's derivatives as of December 31, 2017 by product were as follows:   (1)See "Derivative Instruments and Hedging Activities" above for a description of derivative financial instruments. (2)Represents TBA purchase and sale contracts related to the legacy Oppenheimer Multifamily Housing and Healthcare Finance, Inc. business. (Expressed in thousands) Fair Value of Derivative Instruments Description Notional Fair Value Assets: Derivatives not designated as hedging instruments (1) Other contracts TBAs $26,000 $22 Other TBAs (2)39,576 694 $65,576 $716 Liabilities: Derivatives not designated as hedging instruments (1) Commodity contracts Futures $5,844,000 $766 Other contracts TBAs 26,000 22 Other TBAs (2)39,576 592 ARS purchase commitments 10,993 8 $5,920,569 $1,388 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 20 5.Collateralized transactions The Company enters into collateralized borrowing and lending transactions in order to meet customers' needs and earn residual interest rate spreads, obtain securities for settlement and finance trading inventory positions. Under these transactions, the Company either receives or provides collateral, including U.S. Government and Agency, asset-backed, corporate debt, equity, and non-U.S. Government and Agency securities. The Company obtains short-term borrowings primarily through bank call loans. Bank call loans are generally payable on demand and bear interest at various rates but not exceeding the broker call rate. As of December 31, 2017, bank call loans were $118.3 million. As of December 31, 2017, such loans were collateralized by firm and customer securities with market values of approximately $97.8 million and $198.3 million, respectively, with commercial banks. As of December 31, 2017, the Company had approximately $1.2 billion of customer securities under customer margin loans that are available to be pledged, of which the Company has re-pledged approximately $139.2 million under securities loan agreements. As of December 31, 2017, the Company had pledged $237.0 million of customer securities directly with the Options Clearing Corporation to secure obligations and margin requirements under option contracts written by customers. As of December 31, 2017, the Company had no outstanding letters of credit. The Company enters into reverse repurchase agreements, repurchase agreements, securities borrowed and securities loaned transactions to, among other things, acquire securities to cover short positions and settle other securities obligations, to accommodate customers' needs and to finance the Company's inventory positions. Except as described below, repurchase agreements and reverse repurchase agreements, principally involving U.S. Government and Agency securities, are carried at amounts at which the securities subsequently will be resold or reacquired as specified in the respective agreements and include accrued interest. Repurchase agreements and reverse repurchase agreements are presented on a net-by-counterparty basis, when the repurchase agreements 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 agreements and reverse repurchase agreements exist in "book entry" form and certain other requirements are met. The following table presents a disaggregation of the gross obligation by the class of collateral pledged and the remaining contractual maturity of the repurchase agreements and securities loaned transactions as of December 31, 2017: The following tables present the gross amounts and the offsetting amounts of reverse repurchase agreements, repurchase agreements, securities borrowed and securities loaned transactions as of December 31, 2017: (1)Included in receivable from brokers, dealers and clearing organizations on the consolidated statement of financial condition.   (2)Included in payable to brokers, dealers and clearing organizations on the consolidated statement of financial condition. (Expressed in thousands) Overnight and Open Repurchase agreements: U.S. Government and Agency securities $786,532 Securities loaned: Equity securities 180,270 Gross amount of recognized liabilities for repurchase agreements and securities loaned $966,802 (Expressed in thousands) Gross Amounts Not Offset on the Consolidated Statement of Financial Condition Gross Amounts of Recognized Assets Gross Amounts Offset on the Consolidated Statement of Financial Condition Net Amounts of Assets Presented on the Consolidated Statement of Financial Condition Financial Instruments Cash Collateral Received Net Amount Reverse repurchase agreements $200,712 $(200,054)$658 $—$—$658 Securities borrowed (1)132,368 —132,368 (128,575)—3,793 Total $333,080 $(200,054)$133,026 $(128,575)$—$4,451 (Expressed in thousands) Gross Amounts Not Offset on the Consolidated Statement of Financial Condition Gross Amounts of Recognized Liabilities Gross Amounts Offset on the Consolidated Statement of Financial Condition Net Amounts of Liabilities Presented on the Consolidated Statement of Financial Condition Financial Instruments Cash Collateral Pledged Net Amount Repurchase agreements $786,532 $(200,054)$586,478 $(585,289)$—$1,189 Securities loaned (2)180,270 —180,270 (170,176)—10,094 Total $966,802 $(200,054)$766,748 $(755,465)$—$11,283 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 21 Certain of the Company's repurchase agreements and reverse repurchase agreements are carried at fair value as a result of the Company's fair value option election. The Company elected the fair value option for those repurchase agreements and reverse repurchase agreements that do not settle overnight or have an open settlement date. As of December 31, 2017, the Company did not have any reverse repurchase agreements and repurchase agreements for which the fair value option was elected. The Company receives collateral in connection with securities borrowed and reverse repurchase agreement transactions and customer margin loans. Under many agreements, the Company is permitted to sell or re-pledge the securities received (e.g., use the securities to enter into securities lending transactions, or deliver to counterparties to cover short positions). As of December 31, 2017, the fair value of securities received as collateral under securities borrowed transactions and reverse repurchase agreements was $127.2 million and $221.6 million, respectively, of which the Company has sold and re-pledged approximately $30.9 million under securities loaned transactions and $221.6 million under repurchase agreements. The Company pledges certain of its securities owned for securities lending and repurchase agreements and to collateralize bank call loan transactions. The carrying value of pledged securities owned that can be sold or re-pledged by the counterparty was $655.7 million, as presented on the face of the consolidated statement of financial condition as of December 31, 2017. The carrying value of securities owned by the Company that have been loaned or pledged to counterparties where those counterparties do not have the right to sell or re-pledge the collateral was $97.2 million as of December 31, 2017. The Company manages credit exposure arising from repurchase and reverse repurchase agreements by, in appropriate circumstances, entering into master netting agreements and collateral arrangements with counterparties that provide the Company, in the event of a customer default, the right to liquidate securities and the right to offset a counterparty's rights and obligations. The Company manages market risk of repurchase agreements and securities loaned by monitoring the market value of collateral held and the market value of securities receivable from others. It is the Company's policy to request and obtain additional collateral when exposure to loss exists. In the event the counterparty is unable to meet its contractual obligation to return the securities, the Company may be exposed to off-balance sheet risk of acquiring securities at prevailing market prices. Credit Concentrations Credit concentrations may arise from trading, investing, underwriting and financing activities and may be impacted by changes in economic, industry or political factors. In the normal course of business, the Company may be exposed to risk in the event customers, counterparties including other brokers and dealers, issuers, banks, depositories or clearing organizations are unable to fulfill their contractual obligations. The Company seeks to mitigate these risks by actively monitoring exposures and obtaining collateral as deemed appropriate. Included in receivable from brokers, dealers and clearing organizations as of December 31, 2017 are receivables from four major U.S. broker-dealers totaling approximately $94.0 million. The Company is obligated to settle transactions with brokers and other financial institutions even if its clients fail to meet their obligations to the Company. Clients are required to complete their transactions on the settlement date, generally one to two business days after the trade date. If clients do not fulfill their contractual obligations, the Company may incur losses. The Company has clearing/participating arrangements with the National Securities Clearing Corporation, the Fixed Income Clearing Corporation ("FICC"), R.J. O'Brien & Associates (commodities transactions), Mortgage-Backed Securities Division (a division of FICC) and others. With respect to its business in reverse repurchase agreements and repurchase agreements, substantially all open contracts as of December 31, 2017 are with the FICC. The clearing organizations have the right to charge the Company for losses that result from a client's failure to fulfill its contractual obligations. Accordingly, the Company has credit exposures with these clearing brokers. The clearing brokers can re-hypothecate the securities held on behalf of the Company. As the right to charge the Company has no maximum amount and applies to all trades executed through the clearing brokers, the Company believes there is no maximum amount assignable to this right. As of December 31, 2017, the Company had recorded no liabilities with regard to this right. The Company's policy is to monitor the credit standing of the clearing brokers and banks with which it conducts business. Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 22 6.Variable interest entities The Company's policy is to consolidate all subsidiaries in which it has a controlling financial interest, as well as any VIEs where the Company is deemed to be the primary beneficiary, when it has the power to make the decisions that most significantly affect the economic performance of the VIE and has the obligation to absorb significant losses or the right to receive benefits that could potentially be significant to the VIE. For funds that the Company has concluded are not VIEs, the Company then evaluates whether the fund is a partnership or similar entity. If the fund is a partnership or similar entity, the Company evaluates the fund under the partnership consolidation guidance. Pursuant to that guidance, the Company consolidates funds in which it is the general partner, unless presumption of control by the Company can be overcome. This presumption is overcome only when unrelated investors in the fund have the substantive ability to liquidate the fund or otherwise remove the Company as the general partner without cause, based on a simple majority vote of unaffiliated investors, or have other substantive participating rights. If the presumption of control can be overcome, the Company accounts for its interest in the fund pursuant to the equity method of accounting. The Company serves as general partner of hedge funds and private equity funds that were established for the purpose of providing investment alternatives to both its institutional and qualified retail clients. The Company holds variable interests in these funds as a result of its right to receive management and incentive fees. The Company's investment in and additional capital commitments to these hedge funds and private equity funds are also considered variable interests. The Company's additional capital commitments are subject to call at a later date and are limited in amount. The Company assesses whether it is the primary beneficiary of the hedge funds and private equity funds in which it holds a variable interest in the form of general partner interests. In each instance, the Company has determined that it is not the primary beneficiary and therefore need not consolidate the hedge funds or private equity funds. The subsidiaries' general partnership interests, additional capital commitments, and management fees receivable represent its maximum exposure to loss. The subsidiaries' general partnership interests and management fees receivable are included in other assets on the consolidated statement of financial condition. The following tables set forth the total VIE assets, the carrying value of the subsidiaries' variable interests, and the Company's maximum exposure to loss in Company-sponsored non-consolidated VIEs in which the Company holds variable interests and other non-consolidated VIEs in which the Company holds variable interests as of December 31, 2017:   (1)Represents the total assets of the VIEs and does not represent the Company's interests in the VIEs. (2)Represents the Company's interests in the VIEs and is included in other assets on the consolidated statement of financial condition. (Expressed in thousands) Total VIE Assets (1) Carrying Value of the Company's Variable Interest Capital Commitments Maximum Exposure to Loss in Non-consolidated VIEsAssets (2)Liabilities Hedge funds $54,143 $713 $—$—$713 Private equity funds 15,668 12 —2 14 Total $69,811 $725 $—$2 $727 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 23 7.Furniture, equipment and leasehold improvements  The components of furniture, equipment and leasehold improvements as of December 31, 2017 are as follows: (Expressed in thousands) Furniture, fixtures and equipment $50,009 Leasehold improvements 23,637 Total 73,646 Less accumulated depreciation (67,589) Total $6,057 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 24 8.Subordinated borrowings The subordinated loans are payable to the Company's indirect parent, E.A. Viner International Co. ("Viner"). Certain loans bear interest at 11-1/2% per annum. These loans are due: $3.8 million, November 29, 2018, $7.1 million, December 31, 2018 and $1.6 million, June 25, 2019 and are automatically renewed for an additional year unless terminated by either party within seven months of their expiration. The Company also issued a subordinated note to Viner in the amount of $100.0 million at a fixed rate of 8.75% due and payable on April 15, 2018. On September 1, 2017, this note was restructured and the new note is $100.0 million at a fixed rate of 6.75% due and payable on July 1, 2022. The subordinated loans are available in computing net capital under the Securities and Exchange Commission's uniform net capital rule. These borrowings may be repaid only if, after giving effect to such repayment, the Company meets the Securities and Exchange Commission's net capital requirements. 9.Income taxes The Company is included in an affiliated group that files a consolidated Federal income tax return. The Company files state and local income tax returns on a separate company basis or as part of the affiliated group's unitary combined state filing, depending on the specific requirements of each state and local jurisdiction. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the TCJA. The TCJA makes broad and complex changes to the U.S. tax code, including, but not limited to: (1) reducing the U.S. federal corporate tax rate from 35 percent to 21 percent; (2) requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; (3) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; (4) a new provision designed to tax global intangible low-taxed income ("GILTI"), which allows for the possibility of using foreign tax credits ("FTCs") and a deduction of up to 50 percent to offset the income tax liability (subject to some limitations); (5) limitations on the use of FTCs to reduce the U.S. income tax liability; (6) eliminating the corporate alternative minimum tax ("AMT") and changing how existing AMT credits can be realized; (7) creating the base erosion anti-abuse tax, a new minimum tax; (8) limitations on the deductibility of certain executive compensation; (9) creating a new limitation on deductible interest expense; (10) eliminating the deductibility of entertainment expenses; and (11) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017. On December 22, 2017, the SEC staff issued SAB 118 which provides guidance on accounting for the tax effects of the TCJA. SAB 118 provides a measurement period that should not extend beyond one year from the TCJA enactment date for companies to complete the accounting under ASC 740. The Company has not completed its accounting for the income tax effects of certain elements of the TCJA. However, the Company was able to make reasonable estimates of the effects of certain elements and recorded a provisional estimate in the consolidated statement of financial condition. The estimated enactment net discrete after-tax expense incorporates assumptions made based upon the Company's current interpretations of the TCJA, and may change as it receives additional clarification and implementation guidance and as the interpretation of the TCJA evolves over time. The Company is expected to complete its analysis within the measurement period in accordance with SAB 118. U.S. income and foreign withholding taxes have not been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that is indefinitely reinvested outside the United States. This amount becomes taxable upon a repatriation of assets from the subsidiary or a sale or liquidation of the subsidiary. The amount of such taxable temporary differences totaled $11.2 million as of December 31, 2017. The unrecognized deferred tax liability associated with earnings of foreign subsidiary, net of associated U.S. foreign tax credits, is $3.0 million for the subsidiary with respect to which the Company would be subject to residual U.S. tax on cumulative earnings through 2017 were those earnings to be repatriated. As of December 31, 2017, the Company has net deferred tax assets of $26.9 million. Included in deferred tax assets on a tax- effected basis are timing differences arising with respect to compensation and other expenses not currently deductible for tax purposes and a net operating loss carryforward related to Oppenheimer Israel (OPCO) Ltd. (valued at $3.1 million on a tax-effected basis). The Company believes that realization of deferred tax assets arising from temporary differences in the U.S. taxing jurisdictions is more likely than not based on past income trends and expectations of future taxable income. The Company believes that realization of the deferred tax asset related to net operating loss carryforwards of its subsidiary, Oppenheimer Israel (OPCO) Ltd., is more likely than not based on past income trends and expectations of future taxable income. The net operating loss carries forward indefinitely and is not subject to expiration, provided that this subsidiary and its underlying businesses continue operating normally (as is anticipated). The Company and one or more of its subsidiaries is included in the filing of income tax returns in the U.S. federal jurisdiction, and in various states and foreign jurisdictions, either as part of an affiliated filing group or on a stand-alone basis. The Company's open income tax years vary by jurisdiction, but all income tax years are closed through 2008 for all significant jurisdictions. The Company is under examination for certain tax years in federal, various states and overseas jurisdictions in which the Company has significant business operations. Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 25 10.Employee compensation plans The Parent and the Company maintains various employee compensation plans for the benefits of the Company's employees and its affiliates. Two types of employee compensation are granted under share-based compensation and cash-based compensation plans. Share-based Compensation Equity Incentive Plan Under the Oppenheimer Holdings Inc. 2006 Equity Incentive Plan, adopted December 11, 2006 and amended December 2011, and its 1996 Equity Incentive Plan, as amended March 10, 2005 (together "EIP"), the Compensation Committee of the Board of Directors of the Parent (the "Committee") could grant options to purchase Class A Stock, Class A Stock awards and restricted Class A Stock awards of the Parent to officers and key employees of the Company and its subsidiaries. Options were generally granted for a five-year term and generally vest at the rate of 25% of the amount granted on the second anniversary of the grant, 25% on the third anniversary of the grant, 25% on the fourth anniversary of the grant and 25% six months before expiration. The EIP has been amended, restated and replaced by the OIP, discussed below. Employee Share Plan On March 10, 2005, the Company adopted the Oppenheimer & Co. Inc. Employee Share Plan ("ESP"). The purpose of the ESP was to attract, retain and provide incentives to key management employees. The Committee could grant Class A Stock awards and restricted Class A Stock awards of the Parent pursuant to the ESP. ESP awards were generally awarded for a three or five year term which fully vest at the end of the term. The ESP has been amended, restated and replaced by the OIP, discussed below. Oppenheimer Holdings Inc. 2014 Incentive Plan On February 26, 2014, the Company adopted the Oppenheimer Holdings Inc. 2014 Incentive Plan (the "OIP"). The OIP amends, restates and replaces two separate plans previously in place, the EIP and ESP (the "Prior Plans"), as described above. The OIP permits the Committee to grant options to purchase Class A Stock, Class A Stock awards and restricted Class A Stock awards of the Parent to or for the benefit of employees and non-employee directors of the Company and its affiliates as part of their compensation. After February 26, 2014, no additional awards could be made under the Prior Plans, although outstanding awards previously made under the Prior Plans continue to be governed by the terms of the applicable Prior Plan. Oppenheimer Holdings Inc. Stock Appreciation Right Plan Under the Oppenheimer Holdings Inc. Stock Appreciation Right Plan, the Committee awards stock appreciation rights ("OARs") to certain employees as part of their compensation package based on a formula reflecting gross production and length of service. These awards are granted once per year in January with respect to the prior year's production. The OARs vest five years from grant date and settle in cash at vesting. Restricted stock - The Company has granted restricted stock awards pursuant to the EIP, ESP and OIP. The following table summarizes the status of the Company's non-vested restricted Class A Stock awards under the EIP, ESP and OIP for the year ended December 31, 2017: As of December 31, 2017, all outstanding restricted Class A Stock awards were non-vested. The aggregate intrinsic value of restricted Class A Stock awards outstanding as of December 31, 2017 was $21.3 million. As of December 31, 2017, the number of shares of Class A Stock available under the share-based compensation plans, but not yet awarded, was 1,143,598. On January 30, 2018, the Committee awarded a total of 281,919 restricted shares of Class A Stock to current employees pursuant to the OIP. Of these restricted shares, 126,240 shares will cliff vest in three years and 155,679 shares will cliff vest in five years. These awards will be expensed over the applicable three or five year vesting period. On January 31, 2018, the Committee awarded 9,100 restricted shares of Class A Stock to an executive officer of the Company pursuant to the OIP. This award cliff vests in five years and will be expensed over the five year vesting period. Stock options - The Committee has granted stock options pursuant to the EIP and OIP. There were 14,499 options outstanding as of December 31, 2017. On January 30, 2018, the Committee awarded a total of 4,050 options to purchase Class A Stock to current employees pursuant to the OIP. These options will be expensed over 4.5 years (the vesting period). Number of Class A Shares Subject to Restricted Stock  Awards Weighted Average Fair Value Remaining Contractual Life Nonvested at beginning of year 972,331 $17.23 1.9 Years Granted 374,300 17.00 1.9 Years Vested (482,330)18.91 — Forfeited (70,175)16.48 — Nonvested at end of year 794,126 $16.17 2.2 Years Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 26 OARs - The Committee has awarded OARs pursuant to the Oppenheimer Holdings Inc. Stock Appreciation Right Plan. The following table summarized the status of the Company's outstanding OARs awards as of December 31, 2017: The fair value as of December 31, 2017 for each OARs was estimated using the Black-Scholes model with the following assumptions: (1)The expected term was determined based on the remaining life of the actual awards. (2)The volatility factor was measured using the weighted average of historical daily price changes of the Parent's Class A Stock over a historical period commensurate to the expected term of the awards. (3)The risk-free interest rate was based on periods equal to the expected term of the awards based on the U.S. Treasury yield curve in effect at December 31, 2017. (4)Actual dividends of the Parent were used to compute the expected annual dividend yield. As of December 31, 2017, 1,697,170 of outstanding OARs were unvested and 311,780 of outstanding OARs were vested. As of December 31, 2017, the aggregate intrinsic value of OARs outstanding was $15.0 million. The liability related to the OARs was $7.1 million as of December 31, 2017. On January 5, 2018, 497,430 OARs were awarded to Oppenheimer employees related to fiscal 2017 performance. These OARs will be expensed over 5 years (the vesting period). Grant Date Number of OARs Outstanding Strike Price Remaining Contractual Life Fair Value as of December 31, 2017 January 14, 2013 311,780 $15.94 13 Days $10.86 January 14, 2014 391,730 23.48 1 Year 4.75 January 9, 2015 444,660 21.94 2 Years 7.09 January 6, 2016 439,120 15.89 3 Years 11.77 January 6, 2017 421,660 18.90 4 Years 10.35 2,008,950 Total weighted average values $19.35 2.2 Years $8.93 Grant Date January 14, 2013 January 14, 2014 January 9, 2015 January 6, 2016 January 6, 2017 Expected term (1)13 Days 1 Year 2 Years 3 Years 4 Years Expected volatility factor (2)20.683%27.995%32.249%35.174%34.439% Risk-free interest rate (3)0.613%1.738%1.887%1.971%2.089% Actual dividends (4)$0.44 $0.44 $0.44 $0.44 $0.44 Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 27 Cash-based Compensation Plan Defined Contribution Plan The Company maintains a defined contribution plan covering substantially all full-time U.S. employees. The Oppenheimer & Co. Inc. 401(k) Plan provides that Oppenheimer may make discretionary contributions. Eligible Oppenheimer employees could make voluntary contributions which could not exceed $18,000 per annum in 2017, 2016 and 2015. The Company made contributions to the 401(k) Plan of $1.5 million in 2017. Deferred Compensation Plans The Company maintains an Executive Deferred Compensation Plan ("EDCP") and a Deferred Incentive Plan ("DIP") in order to offer certain qualified high-performing financial advisers a bonus based upon a formula reflecting years of service, production, net commissions and a valuation of their clients' assets. The bonus amounts resulted in deferrals in fiscal 2017 of $8.2 million ($7.7 million in 2016 and $8.3 million in 2015). These deferrals normally vest after five years. The liability is being recognized on a straight-line basis over the vesting period. The EDCP also includes voluntary deferrals by senior executives that are not subject to vesting. The Company maintains a Company-owned life insurance policy, which is designed to offset approximately 60% of the EDCP liability. The EDCP liability is being tracked against the value of a benchmark investment portfolio held for this purpose. As of December 31, 2017, the Company's liability with respect to the EDCP and DIP totaled $52.3 million and is included in accrued compensation on the consolidated statement of financial condition as of December 31, 2017. In addition, the Company is maintaining a deferred compensation plan on behalf of certain employees who were formerly employed by CIBC World Markets. The liability is being tracked against the value of an investment portfolio held by the Company for this purpose and, therefore, the liability fluctuates with the fair value of the underlying portfolio. As of December 31, 2017, the Company's liability with respect to this plan totaled $17.2 million. Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 28 11.Commitments and contingencies Commitments The Company and its subsidiaries have operating leases for office space, equipment and furniture and fixtures expiring at various dates through 2028. Future minimum rental commitments under such office and equipment leases as of December 31, 2017 are as follows: The above table includes operating leases which have been signed by the Company's immediate parent, Viner Finance Inc., in which the Company is responsible for rent charges associated with its occupancy. Certain of the leases contain provisions for rent increases based on changes in costs incurred by the lessor. As of December 31, 2017, the Company had no collateralized or uncollateralized letters of credit outstanding. (Expressed in thousands) 2018 $43,460 2019 38,654 2020 29,997 2021 25,597 2022 22,581 2023 and thereafter 87,729 $248,018 Contingencies Many aspects of the Company's business involve substantial risks of liability. In the normal course of business, the Company has been named as defendant or co-defendant in various legal actions, including arbitrations, class actions, and other litigation, creating substantial exposure. Certain of the actual or threatened legal matters include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. These proceedings arise primarily from securities brokerage, asset management and investment banking activities. The Company is also involved, from time to time, in other reviews, investigations and proceedings (both formal and informal) by governmental and self-regulatory agencies regarding the Company's business which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief. The investigations include, among other things, inquiries from the Securities and Exchange Commission (the "SEC"), the Financial Industry Regulatory Authority ("FINRA") and various state regulators. The Company accrues for estimated loss contingencies related to legal and regulatory matters when available information indicates that it is probable a liability had been incurred and the Company can reasonably estimate the amount of that loss. In many proceedings, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount of any loss. In addition, even where 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. 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. Numerous issues may need to be reviewed, analyzed or resolved, including through potentially lengthy discovery and determination of important factual matters, and by addressing novel or unsettled legal questions relevant to the proceedings in question, before a loss or range of loss or additional loss can be reasonably estimated for any proceeding. Even after lengthy review and analysis, the Company, in many legal and regulatory proceedings, may not be able to reasonably estimate possible losses or range of loss. For certain other legal and regulatory proceedings, the Company can estimate possible losses, or range of loss in excess of amounts accrued, but does not believe, based on current knowledge and after consultation with counsel, that such losses individually, or in the aggregate, will have a material adverse effect on the Company's consolidated statement of financial condition as a whole. In February 2010, Oppenheimer finalized settlements with the Regulators concluding investigations and administrative proceedings by the Regulators concerning Oppenheimer's marketing and sale of ARS. Pursuant to the settlements with the Regulators, Oppenheimer agreed to extend offers to repurchase ARS from certain of its clients subject to certain terms and conditions more fully described below. As of December 31, 2017, the Company had no outstanding ARS purchase commitments related to the settlements with the Regulators. In addition to the settlements with the Regulators, Oppenheimer has also reached settlements of and received adverse awards in legal proceedings with various clients where the Company is obligated to purchase ARS. Pursuant to completed Purchase Offers (as defined) under the settlements with the Regulators and client related legal settlements and awards to purchase ARS, as of December 31, 2017, the Company purchased and holds (net of redemptions) $113.9 million in ARS from its clients. In addition, the Company is committed to purchase another $11.0 million in ARS from clients through 2020 under legal settlements and awards. Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 29 The Company's purchases of ARS from its clients holding ARS eligible for repurchase will, subject to the terms and conditions of the settlements with the Regulators, continue on a periodic basis. Pursuant to these terms and conditions, the Company is required to conduct a financial review every six months, until the Company has extended Purchase Offers to all Eligible Investors (as defined), to determine whether it has funds available, after giving effect to the financial and regulatory capital constraints applicable to the Company, to extend additional Purchase Offers. The financial review is based on the Company's operating results, regulatory net capital, liquidity, and other ARS purchase commitments outstanding under legal settlements and awards (described below). There are no predetermined quantitative thresholds or formulas used for determining the final agreed upon amount for the Purchase Offers. Upon completion of the financial review, the Company first meets with its primary regulator, FINRA, and then with representatives of the NYAG and other regulators to present the results of the review and to finalize the amount of the next Purchase Offer. Various offer scenarios are discussed in terms of which Eligible Investors should receive a Purchase Offer. The primary criteria to date in terms of determining which Eligible Investors should receive a Purchase Offer has been the amount of household account equity each Eligible Investor had with the Company in February 2008. Once various Purchase Offer scenarios have been discussed, the regulators, not the Company, make the final determination of which Purchase Offer scenario to implement. The terms of settlements provide that the amount of ARS to be purchased during any period shall not risk placing the Company in violation of regulatory requirements. Eligible Investors for future buybacks continued to hold approximately $25.3 million of ARS principal value as of December 31, 2017. It is reasonably possible that some ARS Purchase Offers will need to be extended to Eligible Investors holding ARS prior to redemptions (or tender offers) by issuers of the full amount that remains outstanding. The potential additional losses that may result from entering into ARS purchase commitments with Eligible Investors for future buybacks represents the estimated difference between the principal value and the fair value. It is possible that the Company could sustain a loss of all or substantially all of the principal value of ARS still held by Eligible Investors but such an outcome is highly unlikely. The amount of potential additional losses resulting from entering into these commitments cannot be reasonably estimated due to the uncertainties surrounding the amounts and timing of future buybacks that result from the six-month financial review and the amounts, scope, and timing of future issuer redemptions and tender offers of ARS held by Eligible Investors. The range of potential additional losses related to valuation adjustments is between $0 and the amount of the estimated differential between the principal value and the fair value of ARS held by Eligible Investors for future buybacks that were not yet purchased or committed to be purchased by the Company at any point in time. The range of potential additional losses described here is not included in the estimated range of aggregate loss in excess of amounts accrued for legal and regulatory proceedings described above. Outside of the settlements with the Regulators, the Company has also reached various legal settlements with clients and received unfavorable legal awards requiring it to purchase ARS. The terms and conditions including the ARS amounts committed to be purchased under legal settlements and awards are based on the specific facts and circumstances of each legal proceeding. In most instances, the purchase commitments are in increments and extend over a period of time. As of December 31, 2017, there were no ARS purchase commitments related to legal settlements extending past 2020. The Company has sought, with limited success, financing from a number of sources to try to find a means for all its clients to find liquidity from their ARS holdings and will continue to do so. There can be no assurance that the Company will be successful in finding a liquidity solution for all its clients' ARS. On January 27, 2015, the SEC approved an Offer of Settlement from Oppenheimer and issued an Order Instituting Administrative and Cease and Desist Proceedings (the "Order").  Pursuant to the Order, Oppenheimer was ordered to (i) cease and desist from committing or causing any violations of the relevant provisions of the federal securities laws; (ii) be censured; (iii) pay to the SEC $10.0 million comprised of $4.2 million in disgorgement, $753,500 in prejudgment interest and $5.1 million in civil penalties; and (iv) retain an independent consultant to review Oppenheimer's policies and procedures relating to anti-money laundering and Section 5 of the Securities Act. Oppenheimer made a payment of $5.0 million to the SEC on February 17, 2015 and agreed to make a second payment of $5.0 million to the SEC before January 27, 2017 which payment was made to the SEC on January 26, 2017. Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 30 On the same date the Order was issued, a division of the United States Department of the Treasury ("FinCEN") issued a Civil Monetary Assessment (the "Assessment") against Oppenheimer relating to potential violations of the Bank Secrecy Act ("BSA") and the regulations promulgated thereunder related primarily to, in the Company's view, the SEC matter discussed immediately above. Pursuant to the terms of the Assessment, Oppenheimer admitted that it violated the BSA and consented to the payment of a civil money penalty, which, as a result of the payments to the SEC described above, obligates Oppenheimer to make an aggregate payment of $10.0 million to FinCEN. On February 9, 2015, Oppenheimer made a payment of $5.0 million to FinCEN and agreed to make a second payment of $5.0 million before January 27, 2017 which payment was made to FinCEN on January 26, 2017. Since August of 2014, Oppenheimer has been responding to information requests from the SEC regarding the supervision of one of its former financial advisers who was indicted by the United States Attorney's Office for the District of New Jersey in March 2014 on allegations of insider trading. A number of Oppenheimer employees have provided on-the-record testimony in connection with the SEC inquiry. Oppenheimer is continuing to cooperate with the SEC inquiry. Since September 2016, Oppenheimer has been responding to information requests from FINRA regarding the supervision of Oppenheimer's sale of unit investment trusts from 2011 to 2015. The inquiry is part of a larger targeted examination or "sweep" examination involving many other brokerage firms. Oppenheimer is continuing to cooperate with the FINRA inquiry. Oppenheimer & Co. Inc. and Subsidiaries Notes to Consolidated Statement of Financial Condition As of December 31, 2017 31 12. Regulatory requirements The Company's U.S. broker dealer subsidiaries, Oppenheimer and Freedom, are subject to the uniform net capital requirements of the SEC under Rule 15c3-1 (the "Rule") promulgated under the Securities Exchange Act of 1934. Oppenheimer computes its net capital requirements under the alternative method provided for in the Rule which requires that Oppenheimer maintain net capital equal to two percent of aggregate customer-related debit items, as defined in SEC Rule 15c3-3. As of December 31, 2017, the net capital of Oppenheimer as calculated under the Rule was $142.0 million or 14.00% of Oppenheimer's aggregate debit items. This was $121.7 million in excess of the minimum required net capital at that date. Freedom computes its net capital requirement under the basic method provided for in the Rule, which requires that Freedom maintain net capital equal to the greater of $100,000 or 6-2/3% of aggregate indebtedness, as defined. As of December 31, 2017, Freedom had net capital of $5.3 million, which was $5.2 million in excess of the $100,000 required to be maintained at that date. 13. Related party transactions As of December 31, 2017, the Company had amounts payable to affiliates who are consolidated operating subsidiaries of the Parent on the consolidated statement of financial condition. Included in other assets are amounts receivable from affiliates of $2.5 million and included in accounts payable and other liabilities are amounts due to affiliates of $78.0 million. As of December 31, 2017, the Company had income taxes payable of $63.5 million which are comprised of payables to affiliates related to consolidated income tax liabilities. The Company remits payments for income taxes on behalf of its affiliates. Payments for income taxes are reimbursable by the affiliates. The amounts payable to affiliates presented above are gross amounts that have not been netted for direct expenses that reside at the affiliate and are unsecured, non-interest bearing and have no fixed terms of payment. The Company does not make loans to its officers and directors except under normal commercial terms pursuant to client margin account agreements. These loans are fully collateralized by such employee-owned securities. 14.Subsequent events The Company has performed an evaluation of events that have occurred since December 31, 2017 and through February 27, 2018, the date on which the consolidated statement of financial condition was issued, and determined that there are no events that have occurred that would require recognition or additional disclosure.