Oppenheimer to pay $70M to settle cash-sweeps class action

Oppenheimer agreed to pay $70 million to settle a class-action lawsuit that accused the firm of underpaying clients on uninvested cash balances. The settlement resolves a case that was scheduled for a June jury trial; plaintiffs asked a federal judge in New York to approve the deal.

Liberty Capital Group filed the suit in June 2025 against Oppenheimer Holdings and its wealth management subsidiaries. U.S. District Judge Jed Rakoff certified the case as a class action in December and placed it on an accelerated schedule with a trial date set for June.

The complaint alleges Oppenheimer at times paid as little as 0.25% on clients’ idle cash while routing that money into bank programs and lending it at higher rates. Court filings cite company figures showing cash-sweep income increased more than 65% to nearly $173 million from 2022 to 2023 on about $3 billion in client cash.

Oppenheimer told the court it expected the lead plaintiff to seek more than $440 million in damages and cited the accelerated timetable and the risk of an unpredictable jury verdict when explaining the settlement. In a press release, Oppenheimer wrote, “Given the lack of precedent in other cases and the inherent risks of a jury trial where the outcome could be worse than a negotiated settlement, the Company concluded that it was in the best interests of the Company, its employees, stockholders and other stakeholders to enter into an agreement to settle the claims.” Attorneys for both sides did not immediately respond to requests for comment.

The case is part of a wave of litigation that began in June 2024, when investors started suing brokerages and wealth managers over cash-sweeps programs. Plaintiffs in roughly two dozen suits have alleged firms kept most gains from lending clients’ idle cash rather than passing higher rates to customers as market interest rates rose in 2022 and 2023.

Some related lawsuits have been dismissed or narrowed. A federal judge in Minnesota dismissed a suit against U.S. Bank after finding the bank made no promise to pay a “reasonable” interest rate. Other complaints have been partly dismissed but allowed to proceed in modified form in California and Arizona.

Oppenheimer’s settlement is the first negotiated resolution among the current wave of cash-sweeps cases. Plaintiffs who supported the settlement told Judge Rakoff they had agreed in principle to the $70 million payment and asked for final approval.