Fiduciary Duties
The Duties Oppenheimer Owed, and Where We Believe It Fell Short
Under federal law, an investment adviser is a fiduciary. The SEC describes that duty as a duty of care and a duty of loyalty: the adviser must serve the client’s best interest at all times and may not put its own interest first. The duty cannot be waived. SEC Release IA-5248 (2019) SEC v. Capital Gains Research Bureau, 375 U.S. 180 (1963)
Please read this first. This page is our opinion of how these rules apply, based on documents posted on this site. No arbitrator or court has found that Oppenheimer breached these duties. The FINRA award denied our claims, and the federal court confirmed that award. Both rulings are posted in full.
| Duty | What it requires | What we believe the documents show | Sources |
|---|---|---|---|
| Loyalty | Full and fair disclosure, and the client’s informed consent, before the adviser benefits | A higher rate billed for a period beginning before the client signed; an authorization letter with no effective date | Ex. 13 (OPCO_11442); Ex. 2 |
| Care | Advice in the client’s best interest, based on the client’s circumstances | A 56% fee increase sought from an elderly client during documented, significant cognitive decline | Desai letter p. 4; 5/7/25 Tr. 57–58 |
| Client before firm | The adviser may not place its own interest ahead of the client’s | Three family members described Mr. Hymen saying Lawrence gave him a bonus; one testified under oath. Mr. Hymen denied it. Oppenheimer’s Code bars employees from accepting bonuses from anyone the firm does business with. | 5/7/25 Tr. 22, 73, 99, 134, 175; quoted in Ex. 15-A at 2–3 |
| Senior-investor protections | FINRA Rule 4512: firms must make reasonable efforts to get a trusted contact. Rule 2165 permits (does not require) a temporary hold when exploitation is suspected. | We believe a firm aware of a client’s decline should use these tools before raising his fee. | FINRA Rules 4512, 2165 |
| Commercial honor | FINRA Rule 2010: high standards of commercial honor and just and equitable principles of trade | Retroactive billing; discovery conduct described on the homepage | FINRA Rule 2010 |
| Firm’s own standards | Oppenheimer’s Code of Conduct | Employees “may not, directly or indirectly, accept or receive bonuses, fees, gifts” of more than nominal value from anyone Oppenheimer does or seeks to do business with | Code of Conduct, quoted in Ex. 15-A at 2–3 |
| Illinois law | Illinois Securities Law of 1953, adviser-conduct provisions | In our view, charging for a period before the client authorized it is not consistent with these provisions | 815 ILCS 5/12 |
Loyalty
What it requires: Full and fair disclosure, and the client’s informed consent, before the adviser benefits
What we believe the documents show: A higher rate billed for a period beginning before the client signed; an authorization letter with no effective date
Sources: Ex. 13 (OPCO_11442); Ex. 2
Care
What it requires: Advice in the client’s best interest, based on the client’s circumstances
What we believe the documents show: A 56% fee increase sought from an elderly client during documented, significant cognitive decline
Sources: Desai letter p. 4; 5/7/25 Tr. 57–58
Client before firm
What it requires: The adviser may not place its own interest ahead of the client’s
What we believe the documents show: Three family members described Mr. Hymen saying Lawrence gave him a bonus; one testified under oath. Mr. Hymen denied it. Oppenheimer’s Code bars employees from accepting bonuses from anyone the firm does business with.
Sources: 5/7/25 Tr. 22, 73, 99, 134, 175; quoted in Ex. 15-A at 2–3
Senior-investor protections
What it requires: FINRA Rule 4512: firms must make reasonable efforts to get a trusted contact. Rule 2165 permits (does not require) a temporary hold when exploitation is suspected.
What we believe the documents show: We believe a firm aware of a client’s decline should use these tools before raising his fee.
Sources: FINRA Rules 4512, 2165
Commercial honor
What it requires: FINRA Rule 2010: high standards of commercial honor and just and equitable principles of trade
What we believe the documents show: Retroactive billing; discovery conduct described on the homepage
Sources: FINRA Rule 2010
Firm’s own standards
What it requires: Oppenheimer’s Code of Conduct
What we believe the documents show: Employees “may not, directly or indirectly, accept or receive bonuses, fees, gifts” of more than nominal value from anyone Oppenheimer does or seeks to do business with
Sources: Code of Conduct, quoted in Ex. 15-A at 2–3
Illinois law
What it requires: Illinois Securities Law of 1953, adviser-conduct provisions
What we believe the documents show: In our view, charging for a period before the client authorized it is not consistent with these provisions
Sources: 815 ILCS 5/12
A Third Account, Kept on Commissions
My father had three Oppenheimer accounts. Two paid the advisory fee, raised to 1.95% a year in January 2021. The third stayed a commission-based brokerage account until October 2021, when it moved into the fee-based program. Oppenheimer confirmed this in writing.
The rule that applies. In 2021 this was a brokerage account, so Regulation Best Interest governed it. Reg BI requires a broker-dealer to act in a retail customer’s best interest when it makes a recommendation, including a recommendation about what type of account to use. The cost difference between a commission account and a fee-based account is part of that analysis. 17 C.F.R. § 240.15l-1
Oppenheimer’s letter shows the account structure and the timing. It does not show why the account stayed on commissions. We present what the documents show. Readers can draw their own conclusions.