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Oppenheimer loses bid to overturn FINRA arbitration award of $36.7 million

On Behalf of | Mar 7, 2023 | FINRA Compliance

A Georgia Superior Court Judge has rejected an attempt by Oppenheimer & Co. Inc. to vacate an arbitration award against the firm, according to Investment News.

Last September, a panel of Financial Industry Regulatory Authority arbitrators awarded $36.7 million to a group of investors in their claim against Oppenheimer. The investors were clients of John Woods, a former advisor at an Oppenheimer branch office in Atlanta who was charged by the Securities and Exchange Commission with orchestrating a $110 million dollar Ponzi scheme.

The investors, who purchased a private equity fund sold by Woods, said Oppenheimer failed to protect them from being victimized by the scheme due to its inadequate supervision. Overall, the fraud affected over 400 investors in more than 20 states, many of them elderly retirees.

Last October, Oppenheimer filed a motion in a Georgia Superior Court to vacate or overturn the arbitration ruling in favor of the investors. The firm’s claims included arbitrator bias, failure to postpone the hearing to allow key witnesses to testify, and “manifest disregard of the law.” The Superior Court judge orally ruled to confirm the FINRA panel’s arbitration award in favor of the investors.

Oppenheimer is considering appealing its case to the Georgia Court of Appeals. The company said it never received a complaint or question from any of the investors prior to the SEC bringing a complaint against Woods and his co-conspirators in 2021, adding that Woods made multiple false statements to Oppenheimer, to regulators and to a state court.

In September, a federal court in Georgia granted a temporary restraining order and asset freeze against Woods and his investment company, Horizon Private Equity III LLC.

The attorneys at Lewitas Hyman have handled hundreds of arbitrations before FINRA, the Chicago Board Options Exchange, the Chicago Board of Trade, JAMS, the American Arbitration Association and other self-regulatory organizations nationwide. We have also appeared in courts throughout the United States in various securities-related matters. For more information about our arbitration and litigation services, please contact Lewitas Hyman at (888) 655-6002 or through our online contact form.