The Securities and Exchange Commission (SEC) and Oppenheimer & Co. are in ongoing discussions regarding a potential settlement concerning issues of non-compliance with municipal bond offering disclosure requirements. A status update relating to these negotiations was submitted to the New York Southern District Court on August 4, 2025.
Both parties have reportedly reached an agreement on the final documentation of their settlement in principle. The SEC enforcement staff involved in this case have prepared a recommendation for the settlement terms, which is now pending review by the full Commission.
However, the firm has brought to light additional statutory disqualifications that would arise from an injunctive relief component of the proposed settlement terms. This has led Oppenheimer to commence efforts to seek further relief from these statutory disqualifications from the Commission.
The processes for obtaining approvals for settlement terms and for seeking relief from statutory disqualifications within the agency are distinct and require separate reviews.
In light of these proceedings, both parties have requested that the court maintain the stay of action to save judicial and party resources while moving forward with these discussions. They have committed to filing either a consent to enter a final judgment and a proposed final judgment or an updated status report by October 3, 2025.
The ongoing case centers around Oppenheimer’s failure to adhere to the requirements of the Limited Offering Exemption. This exemption permits certain limited offerings of municipal securities to be sold without the usual disclosure obligations provided certain conditions are met.
Specifically, the Limited Offering Exemption requires underwriters like Oppenheimer to ensure a reasonable belief that the municipal securities are being sold exclusively to sophisticated investors who are purchasing for their own accounts without any intent to resell.
Between June 15, 2017, and April 27, 2022, Oppenheimer executed at least 354 municipal offerings relying on this exemption while failing to meet its stipulated conditions.
In those offerings, Oppenheimer sold municipal securities to broker-dealers or investment advisers without having a reasonable belief that those entities were making purchases for their own accounts. The firm was aware—or should have been aware—that these entities may have been acquiring securities on behalf of their customer accounts.
Oppenheimer did not make efforts to verify whether those entities were acting on behalf of customers and whether those customers met the criteria set by the exemption. Consequently, the firm did not fulfill the requirements allowing it to utilize the Limited Offering Exemption, having sold municipal securities without a sound basis for believing that the purchasers were both sophisticated and acting for a single account.
During the relevant timeframe, Oppenheimer lacked adequate policies and procedures aimed at ensuring compliance with the Limited Offering Exemption when serving as an underwriter for such municipal securities offerings.
Moreover, the firm made misleading statements to municipal securities issuers, asserting compliance with the Limited Offering Exemption—statements made with negligence, as the firm’s common practice did not include obtaining necessary information to confirm if its municipal securities sales met the exemption criteria.
The 354 offerings conducted by Oppenheimer did not satisfy the exemption conditions, and the firm was aware or should have been aware that its claims of compliance were misleading.
Through these offerings, Oppenheimer reportedly garnered a net profit of at least $1,938,580.
In summary, the parties continue to negotiate a resolution to address these compliance concerns while balancing the implications of injunctive relief and statutory disqualifications in the context of municipal bond offerings. The outcome remains pending further reviews and submissions to the court in the upcoming weeks.