Oppenheimer fails to overturn $36.7 million arbitration loss

The firm lost the huge arbitration decision, which was decided by a Finra panel, last year to eight investors who were sold a private equity fund by a former Oppenheimer broker, John Woods.

Oppenheimer & Co. Inc. at the end of January failed in its attempt to vacate or overturn in Georgia Superior Court a Finra arbitration panel award last year of $36.7 million.

Oppenheimer lost the huge arbitration decision, decided by a Financial Industry Regulatory Authority Inc. panel, in September, to eight investors who were sold a private equity fund by a former Oppenheimer broker, John Woods, near Atlanta. It is extremely rare for state court judges to overturn Finra arbitration awards.

In 2021, the Securities and Exchange Commission charged Woods with running a $110 million Ponzi scheme. He was a broker registered with Oppenheimer from 2003 to 2016, according to his BrokerCheck profile, with more than two dozen lawsuits pending.

Oppenheimer filed its motion to vacate the award on Oct. 6 with the Superior Court of DeKalb County, Georgia. The firm’s motion to vacate was based on, among other defects, arbitrator bias, failure to postpone the hearing to permit key witnesses to testify, and manifest disregard of the law, according to the company.

That effort came up short, according to a filing Jan. 30 with the SEC by Oppenheimer Holdings Inc., the publicly traded holding company for the broker-dealer.

The Georgia Superior Court judge “orally ruled to confirm” the arbitration award, according to the filing.

Oppenheimer said it may take its case to the Georgia Court of Appeals.

“Oppenheimer is disappointed in the court’s ruling and is considering an appeal to the judge’s ruling to the Georgia Court of Appeals,” an Oppenheimer spokesperson wrote in an email.