Notice2025-22336
Oppenheimer & Co. Inc., et al.; Notice of Application and Temporary Order December 5, 2025
Primary source
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Published
December 9, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 234 (Tuesday, December 9, 2025)</title>
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[Federal Register Volume 90, Number 234 (Tuesday, December 9, 2025)]
[Notices]
[Pages 57109-57112]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-22336]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. IC-35818; File No. 812-15949]
Oppenheimer & Co. Inc., et al.; Notice of Application and
Temporary Order December 5, 2025
AGENCY: Securities and Exchange Commission (the ``Commission'').
ACTION: Temporary order and notice of application for a permanent order
under section 9(c) of the Investment Company Act of 1940 (the ``Act'').
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Summary of Application: Applicants (defined below) have applied for a
temporary order (the ``Temporary Order'') exempting Advantage Advisers
Multi-Manager, L.L.C. from section 9(a) of the Act with respect to an
injunction entered against Oppenheimer & Co. Inc. in December, 2025 by
the United States
[[Page 57110]]
District Court for the Southern District of New York (the ``Court''),
until the Commission takes final action on an application for a
permanent order exempting the Applicants and other Covered Persons
(defined below) from section 9(a) of the Act (the ``Permanent Order,''
and with the Temporary Order, the ``Requested Orders'').
Applicants: Oppenheimer & Co. (``Opco'') and Advantage Advisers Multi-
Manager, L.L.C. (the ``Adviser'', and together with Opco, the
``Applicants''), and Oppenheimer Holdings Inc. (``OPY'').\1\
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\1\ OPY is a party to the application solely for purposes of
making the representations and agreeing to the conditions in the
application that apply to it.
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Filing Date: The application was filed on December 5, 2025.
Hearing or Notification of Hearing: The Temporary Order will be
effective until such time as the Commission takes final action on the
application by issuing an order granting the requested relief, unless
the Commission orders a hearing. Interested persons may request a
hearing by emailing the Commission's Secretary at <a href="/cdn-cgi/l/email-protection#f5a6909687908194878c86d8ba93939c9690b5869096db929a83"><span class="__cf_email__" data-cfemail="e1b2848293849580939892ccae8787888284a1928482cf868e97">[email protected]</span></a> and serving the Applicant with a copy of the request by
email, if an email address is listed for the relevant Applicant below,
or personally or by mail, if a physical address is listed for the
relevant Applicant below. Hearing requests should be received by the
Commission by 5:30 p.m. on December 31, 2025, and should be accompanied
by proof of service on the Applicants, in the form of an affidavit, or,
for lawyers, a certificate of service. Pursuant to rule 0-5 under the
Act, hearing requests should state the nature of the writer's interest,
any facts bearing upon the desirability of a hearing on the matter, the
reason for the request, and the issues contested. Persons who wish to
be notified of a hearing may request notification by emailing the
Commission's Secretary.
ADDRESSES: The Commission: <a href="/cdn-cgi/l/email-protection#6d3e080e1f08190c1f141e40220b0b040e082d1e080e430a021b"><span class="__cf_email__" data-cfemail="4516202637203124373c36680a23232c2620053620266b222a33">[email protected]</span></a>. Applicants:
Dennis P. McNamara, Esq., Oppenheimer & Co. Inc., 85 Broad Street, 22nd
Floor, New York, NY 10004; Norm Champ, Esq. and Pamela Poland Chen,
Esq., Kirkland & Ellis LLP, 601 Lexington Avenue, New York, New York
10022; Elizabeth A. Marino, Esq., Sidley Austin LLP, 60 State Street,
36th Floor, Boston, MA 02109.
FOR FURTHER INFORMATION CONTACT: Rachel Loko, Senior Special Counsel,
or Kaitlin Bottock, Assistant Chief Counsel, at (202) 551-6825
(Division of Investment Management, Chief Counsel's Office).
SUPPLEMENTARY INFORMATION: The following is a temporary order and a
summary of the application. The complete application may be obtained
via the Commission's website by searching for the file number at the
top of this document, or for an Applicant using the Company name search
field, on the SEC's EDGAR system. The SEC's EDGAR system may be
searched at <a href="https://www.sec.gov/edgar/searchedgar/legacy/companysearch.html">https://www.sec.gov/edgar/searchedgar/legacy/companysearch.html</a>. You may also call the SEC's Office of Investor
Education and Advocacy at (202) 551-8090.
Applicants' Representations
1. Opco, a New York corporation, is registered as a broker-dealer
under the Securities Exchange Act of 1934, as amended (the ``Exchange
Act''), and as an investment adviser under the Investment Advisers Act
of 1940, as amended (the ``Advisers Act''). Currently, Opco does not
serve as investment adviser to any registered investment company (a
``RIC''), employee securities company (an ``ESC'') or business
development company (a ``BDC''), or as principal underwriter (as
defined in section 2(a)(29) of the Act) to any open-end management
investment company registered under the Act (an ``Open-End Fund''),
registered unit investment trust (a ``UIT'') or registered face-amount
certificate company (a ``FACC'') (such activities, collectively, ``Fund
Servicing Activities''),\2\ but it may do so in the future.
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\2\ The term ``Fund Servicing Activities,'' as it relates to
Covered Persons (defined below), refers to each of the capacities
identified in section 9(a) of the Act in which a Covered Person
currently serves or may serve in the future.
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2. The Adviser is a Delaware limited liability company and is
registered as an investment adviser under the Advisers Act. The Adviser
serves an investment adviser to the Advantage Advisers Xanthus Fund,
L.L.C. (the ``Fund'').\3\
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\3\ The term ``Fund'' or ``Funds,'' as used in the application,
refers to any RIC, ESC, and BDC for which an Applicant currently
provides or may in the future provide, or a Covered Person may in
the future provide, Fund Servicing Activities (defined above),
subject to the terms and conditions of the Requested Orders.
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3. Each of the Applicants is an indirect wholly-owned subsidiary of
OPY, a Delaware corporation headquartered in New York, New York and
listed on the New York Stock Exchange. OPY is a financial services
holding company. OPY is an ``affiliated person'' within the meaning of
section 2(a)(3) of the Act (an ``Affiliated Person'') of the
Adviser.\4\
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\4\ Section 2(a)(3) of the Act defines ``affiliated person'' to
include, among others, any person directly or indirectly
controlling, controlled by, or under common control with, the other
person.
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4. While no existing company of which Opco is an Affiliated Person,
other than the Adviser, currently serves as an investment adviser or
depositor of any RIC, ESC or BDC,\5\ or as principal underwriter for
any Open-End Fund, UIT, or FACC, the Applicants request that any relief
granted by the Commission pursuant to the application apply to the
Adviser, Opco, OPY, any existing company of which Opco is an Affiliated
Person and to any other company of which Opco may become an Affiliated
Person in the future (together with the Applicants and OPY, the
``Covered Persons'') with respect to any activity contemplated by
section 9(a) of the Act.
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\5\ Neither BDCs nor ESCs are specifically mentioned in section
9 but are nonetheless required to comply with its requirements by
virtue of section 59 of the Act (for BDCs) and the terms of
applicable exemptive relief (for ESCs).
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5. On September 13, 2022, the Commission filed a complaint in the
Court relating to the matter titled SEC v. Oppenheimer & Co. Inc., Case
No. 1:22-cv-07801-JPC (the ``Complaint'') alleging Opco made certain
sales of municipal securities to broker-dealers and investment advisers
in reliance on the Limited Offering Exemption in rule 15c2-12 under the
Exchange Act (the ``LOE'') without satisfying the LOE's requirements.
The Commission asserted in the Complaint that the LOE requires, among
other things, that underwriters have a reasonable belief that the
municipal securities are being sold only to sophisticated investors
that are each buying the securities for a single account without a view
to distribute them. In the Complaint, the Commission alleged that Opco
did not have a ``reasonable belief'' that the broker-dealers or
investment advisers to which it sold the securities at issue were
buying securities for their own accounts. The Complaint also alleged
that Opco negligently made deceptive statements to municipal issuers by
representing to the issuers that it would offer the securities in
accordance with the LOE, and, in certain cases, certifying that it had
complied with the LOE. The conduct did not involve any of the Adviser's
Fund Servicing Activities, the individuals who provide the Fund
Servicing Activities, the Fund, or the assets of the Fund.
6. Opco has submitted an executed Consent of the Defendant
Oppenheimer & Co. Inc. to entry of Final Judgment
[[Page 57111]]
(the ``Consent''), which will be presented to the Court. In the
Consent, solely for the purpose of proceedings brought by or on behalf
of the Commission or in which the Commission is a party, Opco consents
to entry of the Final Judgment without admitting or denying the
allegations made in the Complaint (except as to personal and subject
matter jurisdiction, which will be admitted) (the ``Final Judgment'').
7. The Final Judgment (i) permanently restrains and enjoins Opco
from violating rule 15c2-12 under the Exchange Act, rules G-17 and G-27
of the Municipal Securities Rulemaking Board (``MSRB'') and section
15B(c)(1) of the Exchange Act (the ``Injunction''); and (ii) orders
Opco to pay a civil penalty in the amount of $1,200,000.
Applicants' Legal Analysis
1. Section 9(a)(2) of the Act provides, in pertinent part, that a
person may not serve or act as an investment adviser or depositor of
any registered investment company, or as principal underwriter for any
Open-End Fund, UIT, or FACC, if such person ``. . . by reason of any
misconduct, is permanently or temporarily enjoined by order, judgment,
or decree of any court of competent jurisdiction from acting as an
underwriter, broker, dealer, investment adviser, municipal securities
dealer, government securities broker, government securities dealer,
bank, transfer agent, credit rating agency, or entity or person
required to be registered under the Commodity Exchange Act . . . or
from engaging in or continuing any conduct or practice in connection
with any such activity or in connection with the purchase or sale of
any security.'' Section 9(a)(3) of the Act extends the prohibitions of
section 9(a)(2) to a company, any affiliated person of which has been
disqualified under the provisions of section 9(a)(2). Section 2(a)(3)
of the Act defines ``affiliated person'' to include, among others, any
person directly or indirectly controlling, controlled by, or under
common control with, the other person. Opco is an Affiliated Person of
the Adviser within the meaning of section 2(a)(3) of the Act.
Therefore, the Final Judgment would result in a disqualification of the
Adviser under section 9(a)(3) from acting in any of the capacities
listed in section 9(a), by effect of an injunction described in section
9(a)(2). Other Covered Persons similarly would be disqualified pursuant
to section 9(a)(3) were they to act in any of the capacities listed in
section 9(a).
2. Section 9(c) of the Act provides that: ``[t]he Commission shall
by order grant [an] application [for relief from the prohibitions of
subsection 9(a)], either unconditionally or on an appropriate temporary
or other conditional basis, if it is established [i] that the
prohibitions of subsection [9](a), as applied to such person, are
unduly or disproportionately severe or [ii] that the conduct of such
person has been such as not to make it against the public interest or
protection of investors to grant such application.'' Applicants have
filed an application pursuant to section 9(c) seeking a Temporary Order
for the Adviser and a Permanent Order exempting Applicants and other
Covered Persons from the disqualification provisions of section 9(a) of
the Act. The Covered Persons may, if the Requested Orders are granted,
in the future act in any of the capacities contemplated by section 9(a)
of the Act subject to the applicable terms and conditions of the
Requested Orders.
3. Applicants believe they meet the standards for exemption
specified in section 9(c). Applicants assert that: (i) the conduct
underlying the Final Judgment (the ``Conduct'') did not involve the
Adviser; (ii) application of the statutory bar would impose significant
hardships on the Fund and its shareholders; (iii) the prohibitions of
section 9(a), if applied to the Applicants, would be unduly or
disproportionately severe; and (iv) the Conduct has not been such that
would make it against the public interest or protection of investors to
grant the exemption from section 9(a).
4. Applicants argue that it would be against the public interest
and protection of investors, and would be unduly and disproportionately
severe, to bar the Adviser from providing Fund Servicing Activities as
a result of the Conduct by Opco that is wholly unrelated to any Fund
Servicing Activities.
5. Applicants state that the Conduct did not involve any of the
Adviser's Fund Servicing Activities. The Conduct did not involve the
Fund, or the assets of the Fund, with respect to which the Adviser
provides Fund Servicing Activities.
6. Applicants assert that the inability of the Adviser to continue
providing investment advisory services to the Fund would result in the
Fund and its shareholders facing unduly and disproportionately severe
hardships. The Applicants state that disqualifying the Adviser from
engaging in Fund Servicing Activities would deprive the Fund of the
advisory or sub-advisory services the Adviser has been providing for
more than 25 years while generating positive investment performance for
the Fund. The Applicants also argue that disruption caused by
prohibiting the Adviser from continuing to serve the Fund would hamper
management of the Fund's investment strategy and could cause
shareholders in the Fund to tender their interests, which could
increase the Fund's expense ratios to the detriment of remaining
shareholders. In addition, the Applicants assert that disqualifying the
Adviser could result in substantial costs to the Fund and its
shareholders, including costs related to (i) identifying a suitable
successor investment adviser, including performing due diligence on
such potential successor; (ii) holding a special meeting (or meetings)
of the Board; and (iii) soliciting shareholders to approve a new
advisory agreement.
7. Applicants also assert that disqualification could have severe
consequences for the Adviser. Applicants explain that the
Disqualification could trigger a loss of more than 93% of the Adviser's
assets under management as of May 2025, also potentially affecting
approximately 14 employees directly supporting the Adviser's work for
the Fund, none of whom had any involvement in the Conduct. Applicants
state that (i) none of the current or former directors, officers or
employees of the Applicants (other than certain current and former
personnel of Opco who were not, are not and will not be involved in
Fund Servicing Activities) had any involvement in the Conduct; (ii) no
person who has been or who subsequently may be identified by Opco or
any U.S. or non-U.S. regulatory or enforcement agencies as having been
responsible for the Conduct will be an officer, director, or employee
of the Adviser, Opco or of any Covered Person providing Fund Servicing
Activities; (iii) no persons who otherwise were involved in the Conduct
have had, and will have any future, involvement in the Applicants' or
Covered Persons' activities in any capacity described in section 9(a)
of the Act; and (iv) because the directors, officers and employees of
the Adviser did not engage in the Conduct, shareholders of the Fund
were not affected any differently than if that Fund had received
services from any other non-affiliated investment adviser.
8. With respect to Opco, Applicants argue that although Opco is not
currently providing Fund Servicing Activities, Opco has committed
significant resources to establish expertise in underwriting the
securities of Open-End Funds and establish distribution arrangements
for Open-End Fund shares, with plans to expand its
[[Page 57112]]
business in Open-End Funds and thus provide Fund Servicing Activities.
Without the requested relief, Opco would lose opportunities to further
expand its business through Fund Servicing Activities by distributing
and managing Open-End Fund products.
9. Applicants note that as of September 2022, when the Commission
filed the Complaint against Opco, Opco made changes to cease relying on
the LOE. Opco does not intend to rely on the LOE unless it can ensure
it remains compliant with SEC and MSRB rules, including exemptions
therefrom. If Opco intends to utilize the LOE at some point in the
future, Opco will implement a procedure for use of the LOE to ensure
compliance with the LOE. Applicants also note that in January 2024,
Opco hired a new Head of Public Finance with over 30 years' experience
working at other well-known industry participants, reporting directly
to the President and CEO of Opco, and added a new managing director and
a new director from outside of Opco to bolster the Public Finance team.
The Head of Public Finance has also engaged a consultant to help adopt
an updated and revised policy and procedures manual for the origination
of municipal bond sales and is finalizing policies and procedures for
the sales and trading of municipal bonds including procedures designed
to achieve compliance with SEC and MSRB rules including, but not
limited to, Exchange Act rule 15c2-12 and the exemptions therefrom.
10. Applicants will provide written notification to the Chief
Counsel of the Commission's Division of Investment Management with a
copy to the Chief Counsel of the Commission's Division of Enforcement
of a material violation of the terms and conditions of the Requested
Orders within 30 days of discovery of the material violation. In
addition, Applicants agree as a condition of the application that the
material terms and conditions of the Final Judgment will be complied
with in all material respects.
Applicants' Conditions
Applicants agree that any order granted by the Commission pursuant
to the application will be subject to the following conditions:
1. Any temporary exemption granted pursuant to the Application
shall be without prejudice to, and shall not limit the Commission's
rights in any manner with respect to, any Commission investigation of,
or administrative proceedings involving or against, Covered Persons,
including without limitation, the consideration by the Commission of a
permanent exemption from section 9(a) of the Act requested pursuant to
the Application or the revocation or removal of any temporary
exemptions granted under the Act in connection with the Application.
2. Neither the Applicants, OPY, nor any of the other Covered
Persons will employ any person to provide Fund Servicing Activities who
previously has been or who subsequently may be identified by the
Applicants or any U.S. or non-U.S. regulatory or enforcement agencies
as having been responsible for the Conduct in any capacity without
first making a further application to the Commission pursuant to
section 9(c).
3. Each Applicant, OPY and any other Covered Person will adopt and
implement policies and procedures reasonably designed to ensure that it
will comply with the terms and conditions of the Requested Orders
within 60 days of the date of the Permanent Order.
4. The material terms and conditions of the Final Judgment will be
complied with in all material respects.
5. The Applicants will provide written notification to the Chief
Counsel of the Commission's Division of Investment Management with a
copy to the Chief Counsel of the Commission's Division of Enforcement
of a material violation of the terms and conditions of the Requested
Orders and Consent within 30 days of discovery of the material
violation.
Temporary Order
The Commission has considered the matter and finds that Applicants
have made the necessary showing to justify granting a temporary
exemption.
Accordingly,
It is hereby ordered, pursuant to section 9(c) of the Act, that the
Adviser is granted a temporary exemption from the provisions of section
9(a), effective as the date of this order, solely with respect to the
Consent, subject to the representations and conditions in the
application, until the Commission takes final action on the Applicants'
application for a permanent order.
By the Commission.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-22336 Filed 12-8-25; 8:45 am]
BILLING CODE 8011-01-P
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