<SEC-DOCUMENT>0000950123-11-089852.txt : 20120217
<SEC-HEADER>0000950123-11-089852.hdr.sgml : 20120217
<ACCEPTANCE-DATETIME>20111013164347
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950123-11-089852
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20111013

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			OPPENHEIMER HOLDINGS INC
		CENTRAL INDEX KEY:			0000791963
		STANDARD INDUSTRIAL CLASSIFICATION:	SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211]
		IRS NUMBER:				980080034
		STATE OF INCORPORATION:			A6
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		SUITE 1110, P.O. BOX 2015
		STREET 2:		20 EGLINTON AVE. WEST
		CITY:			TORONTO
		STATE:			A6
		ZIP:			M4R 1K8
		BUSINESS PHONE:		(416)322-1515

	MAIL ADDRESS:	
		STREET 1:		PO BOX 2015 SUITE 1110
		STREET 2:		20 EGLINTON AVENUE WEST
		CITY:			TORONTO
		STATE:			A6
		ZIP:			M4R 1K8

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	FAHNESTOCK VINER HOLDINGS INC
		DATE OF NAME CHANGE:	19950725

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	VINER E A HOLDINGS LTD
		DATE OF NAME CHANGE:	19880622

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GOLDALE INVESTMENTS LTD
		DATE OF NAME CHANGE:	19861030
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
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<HTML>
<HEAD>
<TITLE>corresp</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">October&nbsp;13, 2011
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">United States Securities and Exchange Commission<BR>
Division of Corporation Finance<BR>
100 F Street, N.E.<BR>
Washington D.C. 20549<BR>
Attention: Kevin Woody, Accounting Branch Chief

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>Re: &nbsp;</B></TD>
    <TD width="1%"><B>&nbsp;</B></TD>
    <TD><B>Oppenheimer Holdings Inc.</B><br><B>
Form&nbsp;10-K</B><br><B>
Filed March&nbsp;2, 2011</B><br><B>
File No.&nbsp;001-12043</B><br></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dear Sirs:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Oppenheimer Holdings Inc. (the &#147;Company&#148;) is in receipt of a comment letter from the United States
Securities and Exchange Commission (the &#147;Commission&#148; or the &#147;SEC&#148;) dated September&nbsp;22, 2011. The
Company&#146;s responses below follow the numbered points in the comment letter.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><I>Form&nbsp;10-K for the year ended December&nbsp;31, 2010</I></U><BR>
<U><I>Item&nbsp;8. Financial Statements and Supplementary Data</I></U><BR>
<U><I>Notes to Consolidated Financial Statements</I></U><BR>
<U><I>1. Summary of Significant accounting policies</I></U><BR>
<U><I>Basis of Presentation, page 75</I></U>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>1. We have considered your response to our prior comment one. Given the apparent quantitative
significance of the over-accrual of compensation expense to net earnings for the year ended
December&nbsp;31, 2009 and several quarterly periods, we are unable to agree with your conclusions
regarding materiality. Please advise us or revise accordingly.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Response:</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company believes that several quantitative and qualitative factors considered in our SAB 99
analysis dated March&nbsp;30, 2010 mitigate the quantitative factor when assessing the out-of-period
adjustment to the overall financial statements. The out-of-period adjustment was caused by an over
accrual of compensation related to a business that was part of a large acquisition that took place
in 2008 (acquisition discussed further below). This over accrual did not result in any over
payments to employees or members of management. However it did have an impact on the Company&#146;s
incentive compensation pool. The Company, as well as other companies in the industry, uses the
compensation as a percentage of revenue ratio as a target for incentive compensation purposes. The
Company&#146;s compensation as a percentage of revenue ratio was 68% in 2008 as a result of the deferred
compensation obligations related to the 2008 acquisition. That ratio remained elevated in 2009 at
68%, despite a fairly substantial decrease in incentive
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">compensation payments in 2009 compared to 2008. For example, the total amount of investment banking
incentive compensation decreased 40% or $9.7&nbsp;million from $24.3&nbsp;million in 2008 to $14.6&nbsp;million in
2009. <B>If the Compensation Committee had known that an additional $3.7&nbsp;million in incentive
compensation was available, it would have likely paid out most, if not all, of that amount to this
group in 2009&nbsp;year which would have had the effect of reducing the magnitude of the adjustment on
the Company&#146;s operating results. In fact, to make up for some of reduced incentive compensation
paid to this group, the Company agreed to make an &#147;off-cycle&#148; incentive compensation payment in
April&nbsp;2010, which totaled $3,461,140 and approximated the amount of the Global High Yield (&#147;GHY&#148;)
over accrual.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As requested, the following is a description of the additional out-of-period adjustments to fiscal
year 2009. The sum of these items was included in the March&nbsp;30, 2010 SAB 99 memo. In addition to
the over-accrual of GHY compensation, the Company had three other adjustments in 2009 totaling a
net debit of <B>$339,683</B>. The first related to the reversal of a legal accrual of $1,000,000 (credit)
related to the settlement of an Auction Rate Security (&#147;ARS&#148;) case that was settled after issuance
of the earnings release but prior to the filing of the 2009 Form 10-K. The second item related to
recognizing a fair value adjustment of $1,067,163 (debit)&nbsp;related to ARS as a result of the legal
settlement referred to above. The third item related to an under accrual of potential loss
exposures in the amount of $272,520 (debit)&nbsp;related to the Company&#146;s Oppenheimer Multifamily
Housing &#038; Healthcare Finance Inc. subsidiary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">After considering the effects of the &#147;off-cycle&#148; incentive compensation payment in April&nbsp;2010 as
well as the additional out-of-period adjustments discussed above, the net impact would have been
$50,888 or 0.15% of 2009 pre-tax income of $34.8&nbsp;million as shown in the following table:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="8" style="border-bottom: 0px solid #000000"><B>Impact on Fiscal Year 2009</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Description</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Amount Dr/(Cr)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">GHY Out-of-Period Adjustment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(3,749,935</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&#147;Off-Cycle&#148; Incentive Compensation Payment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,461,140</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Difference</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(288,795</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>A</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Reversal of Legal Accrual related to ARS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(1,000,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Recognition of ARS Fair Value Adjustment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,067,163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Under Accrual of Interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">272,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">339,683</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>B</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net Impact on Pre-Tax Income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">50,888</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="left" nowrap><B>(A &#043; B)</B></TD>
    <TD nowrap><B></B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Notwithstanding the effects of the foregoing, the Company experienced low profitability in
2009 and 2010 due to (1)&nbsp;significant underperformance of its investment banking business, (2)&nbsp;the
low interest rate environment, and (3)&nbsp;issues in the credit markets as demonstrated in the
following table:
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>$ in Thousands</I></B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Period</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>GHY Loan</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1Q-09</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">281,176</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2Q-09</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,033,180</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3Q-09</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">611,663</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">4Q-09</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,823,916</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;&nbsp;2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,749,935</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To put this in context, in 2007, the Company was very profitable and reported $127.4&nbsp;million
in pre-tax income. In January&nbsp;2008, the Company made a large acquisition of a capital markets
business at an inopportune time and incurred transaction costs of over $85&nbsp;million which, coupled
with the ensuing financial crisis, led to a $36&nbsp;million pre-tax loss in 2008, the first loss in the
Company&#146;s history which was fully described to shareholders during the relevant period. With the
modest recovery in the overall markets in 2009, the Company reported $34.8&nbsp;million in pre-tax
profits despite acquisition costs from the 2008 transaction still weighing on the results, economic
uncertainty, and volatility in the markets. After eliminating the effect of $13.7&nbsp;million in
remaining incentive compensation costs related to the acquisition, pre-tax income in 2009 would
have been $48.5&nbsp;million which would have reduced the impact of the out-of-period adjustment to
7.6%. The Company&#146;s pre-tax income in 2009 represented only 27% of that reported in the year prior
to the financial crisis (i.e., 2007). The out-of-period adjustment did not impact the trend of
earnings from the net loss in 2008 to the net income reported in 2009 nor does it cause income
(loss)&nbsp;to result in a loss (income)&nbsp;for any of the periods in question. The adjustments for each
period would have improved results incrementally but would not have changed significantly the
magnitude of the variances period-over-period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">While this reduced level of earnings in 2009 resulted in the over accrual being quantitatively
large at 9.8%, there are metrics and quantitative factors which the Company believes need to be
assessed in determining the materiality of the adjustment to the financial statements taken as a
whole. The adjustment had the following impact:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Return on Assets (&#147;ROA&#148;) changed between 0.01% and 0.10% for each quarter in 2009, full
year 2009, and the first quarter 2010</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Return on Equity (&#147;ROE&#148;) changed between 0.04% and 0.48% for each quarter in 2009, full
year 2009, and the first quarter 2010</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Less than 0.4% of 2010 and 2009 revenues and expenses</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>0.6% of compensation expense in 2010 and 2009</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Less than 0.4% impact on compensation as a percentage of revenue ratio for both 2010
and 2009</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Less than 0.5% of stockholder&#146;s equity in 2009</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Book value per share for 2009 impacted by $0.16, or less than 0.5%</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Only 1% of gross revenues for Capital Markets business segment in 2009</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Capital Markets business segment pre-tax loss would have been reduced from $4.9&nbsp;million
to $1.2&nbsp;million in 2009*</TD>
</TR>


</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>After considering the effects of the &#147;off-cycle&#148; incentive compensation payment made in
April&nbsp;2010 as discussed above (i.e., $288,795), the Capital Markets business segment&#146;s
pre-tax loss would have been 6% lower to $4.6&nbsp;million instead of the reported $4.9&nbsp;million.</TD>
</TR>

</TABLE>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company does not consider the impact of the aforementioned metrics to be material in the
context of the overall financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There are other considerations that the Company believes are important to weigh in the overall
materiality decision. These items include the following:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>After the first quarter 2010 earnings release, which contained disclosure, including
the dollar amount, of the out-of-period item, the Company&#146;s stock price increased $1.02,
or 3.6% reflecting the large increase in the Company&#146;s quarter-over-quarter results.
Average volatility for the five days before and five days after the first quarter 2010
earnings release was 34.6 and 35.9, respectively.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Trading volume the day of the first quarter 2010 earnings release was normal at 39,000
shares (23,400 the day before and 33,700 the day after). To put things into perspective,
trading volume in the Company&#146;s shares has averaged about 48,000 per day over the last
three months.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>No analyst provides coverage on the Company. Thus there are no third party
metrics/data points to consider in the Company&#146;s SAB 99 analysis.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>There was no negative impact on regulatory or debt covenant calculations as a result of
this item.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">While there are no analysts providing coverage, the Company also considered the content included in
our Chairman&#146;s Presentation at the 2011 Annual Stockholder&#146;s Meeting (the slide deck for which is
contained on our website) that demonstrates the immateriality of the adjustment. Financial
highlights and key business factors discussed in that presentation include:
</DIV>


<DIV style="margin-top: 6pt">
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In 2010, the Company exceeded $1&nbsp;billion in revenues for the first time in the
Company&#146;s history (out-of-period item represents 0.36% of total revenues)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Capital Markets Business Segment produced revenues of $359&nbsp;million (out-of-period
item represents approximately 1% of this segment&#146;s revenues)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Profit margin increased from 3.5% to 6.8% from 2009 to 2010 (would have been 3.9% to
6.5% including the impact of the out-of-period item)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Book value per share was $37.02 in 2010 versus $34.15 in 2009 (would have been $36.84
in 2010 and $34.31 in 2009 including the impact of the out-of-period item)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>ROE increased from 4.4% to 8.0% between 2009 and 2010 (would have been 4.8% to 7.3%
including the impact of the out-of-period item)</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As you can see, the Company continued the recovery that began in 2009 in 2010, despite the
difficult economic conditions and continued low interest rate environment, continuing the trend of
returning to normalized profitability. This also had the effect of reducing the magnitude of the
reversal of the out-of-period adjustment.
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In closing, the Company continues to believe that the impact of the adjustment was not material to
the 2009 or 2010 financial statements. The Company followed the requirements of SAB 99
(Materiality) and SAB 108 (Quantifying Misstatements) and produced contemporaneous documentation
that was both comprehensive and fact-based. The Company vetted the SAB 99 analysis with the Board
of Directors, Audit Committee, outside securities counsel, and its independent auditors all of whom
were in agreement regarding the Company&#146;s conclusion. In addition to the discussion contained in
the SAB 99 memo, the above discussion further demonstrates that the adjustment did not have a
material quantitative impact on the financial statements taken as a whole. The investors did not
react with a material negative change in stock price or volume, various other quantitative metrics
(outside of pre and post-tax profit) were not materially impacted, and the Company included
transparent disclosure in its SEC filings about the nature and correction of the out-of-period
adjustment.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">*****
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company acknowledges that it is responsible for the adequacy and accuracy of the disclosure in
the filing; staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and the Company may not assert
staff comments as a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Should you have further questions or comments, do not hesitate to contact the undersigned.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
<TD width="48%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD colspan="3" align="left">Yours truly,<BR>
<BR><BR>
Oppenheimer Holdings Inc.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Jeffrey J. Alfano
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD colspan="3" align="left">Jeffrey J. Alfano,&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD colspan="3" align="left">Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


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