Item 8.01. Other Events.
On August 31, 2021, a statement of claim was filed (and subsequently amended)
with FINRA by twelve claimants (the "Claimants") entitled Donald Robinson,
Timothy and Sharon Padden, Rhett Rainey, Kelly A. Rainey Trust, Toucan Holdings
LP, Robert Goodman, Robert Daniel Burgner, Individually and as Trustee of the
Burgner Family Charitable Remainder Trust, Douglas Kasemeier, Wesley Callaway,
and Billy Loveless v. Oppenheimer & Co. Inc. (the "Arbitration"). The amended
statement of claim was filed by former customers of Oppenheimer & Co. Inc.
("Oppenheimer") that had invested in Horizon Private Equity, III, LLC
("Horizon"). The amended statement of claim generally alleged that Horizon was a
fraudulent scheme created by a former Oppenheimer financial advisor, John Woods.
John Woods left Oppenheimer's employ in 2016 and Oppenheimer never received a
complaint or question from any of the investors prior to the Securities and
Exchange Commission ("SEC") bringing a complaint against Woods and his
co-conspirators in 2021. Each investor signed a document acknowledging that
Horizon was not an approved Oppenheimer product. Over a protracted period of
time, Woods made multiple false statements to Oppenheimer, to regulators and to
a state court.
Based on these allegations, the amended statement of claim asserted causes of
action against Oppenheimer for, among other things, violations of FINRA rules,
negligence, breach of fiduciary duty, violations of Georgia's RICO statute and
breach of contract. On November 30, 2021, Oppenheimer answered the amended
statement of claim and filed third party claims against James Woods, Michael
Mooney, Britt Wright, Iris Israel and Julie Jones (the "Third Party
Respondents"). A stay of all actions against John Woods and other involved
parties was issued by a Federal court which is why they were not participants in
the arbitration. That stay was subsequently extended to the Third Party
Respondents. Oppenheimer's motion to delay the arbitration until the Federal
court's stay was lifted and all defendants could appear was denied by the
arbitration panel.
On September 6, 2022, the arbitration panel issued an award in the Arbitration.
In the award, the arbitration panel found in favor of the Claimants and awarded
them total damages of $36,744,276.26 (the "Robinson Award"). The arbitration
panel gave no reason or explanation for the Robinson Award. Oppenheimer filed a
Current Report on Form 8-K concerning the Robinson Award with the SEC on
September 7, 2022.
On October 6, 2022, Oppenheimer filed a motion to vacate the Robinson Award with
the Superior Court of DeKalb County, Georgia (the "Superior Court") based on,
among other defects, arbitrator bias, failure to postpone the hearing to permit
key witnesses to testify, and manifest disregard of the law. On October 18,
2022, the Claimants in the Arbitration moved to confirm the Robinson Award.
On January 30, 2023, oral argument regarding Oppenheimer's motion to vacate and
Claimant's motion to confirm was heard by a judge of the Superior Court who
orally ruled to confirm the Robinson Award. Oppenheimer is considering appealing
the Superior Court judge's ruling to the Georgia Court of Appeals.
The Robinson Award was fully reserved for by Oppenheimer in the third quarter of
2022 including accrued interest through December 31, 2022.
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