Oppenheimer to pay $70M to settle cash-sweeps suit

Oppenheimer agreed to a $70 million settlement in a New York class action filed by Liberty Capital Group that accused the firm of underpaying interest on clients’ cash sweeps. Plaintiffs this week asked a federal judge to approve the agreement, which removes a jury trial scheduled for June in Manhattan.

Liberty Capital Group filed the suit in June 2025 against Oppenheimer Holdings and its wealth management subsidiaries. U.S. District Judge Jed Rakoff granted the case class-action status in December. In court filings, Oppenheimer said plaintiffs would likely seek more than $440 million if the case went to trial.

The complaint describes cash sweeps as the practice of moving uninvested brokerage balances into bank accounts or short-term investments where firms can earn higher yields. Plaintiffs alleged clients were sometimes paid rates as low as 0.25% while the firm earned larger returns on the same cash.

The suit says Oppenheimer’s income from sweeps rose more than 65% from 2022 to 2023, reaching nearly $173 million on about $3 billion in clients’ uninvested cash.

Oppenheimer told the court the case had been placed on an accelerated schedule after class status was granted and was set for a June jury trial. In a press release, the firm stated: “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.”

The filing seeking approval asks the court to accept the $70 million resolution in principle and to finalize the settlement terms. Neither Oppenheimer nor the plaintiffs’ lawyers provided additional comment in response to requests.

The Oppenheimer case is one of roughly two dozen suits filed since June 2024 against brokerages and wealth managers over cash-sweeps practices. Firms named in similar litigation include Morgan Stanley, LPL Financial, Wells Fargo, UBS, Ameriprise and Charles Schwab. Plaintiffs in those cases contend that rising interest rates in 2022 and 2023 increased what firms could earn by lending clients’ cash and that clients did not receive comparable increases in interest.

So far, one cash-sweeps complaint was dismissed in February by a federal judge in Minnesota, who found the bank at issue had not promised to pay a “reasonable” rate. Other cases have survived partial dismissals: judges narrowed claims against Wells Fargo, LPL and Osaic but allowed revised complaints to continue. The Oppenheimer settlement is the first among the larger cash-sweeps suits to reach agreed terms, eliminating the near-term prospect of a Manhattan jury verdict while related litigation continues in other courts.