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Fair value measurements
 3 Months Ended
Mar. 31, 2023
Fair Value Disclosures [Abstract]  
Fair value measurements Fair value measurements
Securities owned, securities sold but not yet purchased, investments and derivative contracts are carried at fair value with changes in fair value recognized in earnings each period.
Valuation Techniques
A description of the valuation techniques applied, and inputs used in measuring the fair value of the Company's financial instruments, is as follows:
U.S. Government Obligations
U.S. Treasury securities are valued using quoted market prices obtained from active market makers and inter-dealer brokers.
U.S. Agency Obligations
U.S. agency securities consist of agency issued debt securities and mortgage pass-through securities. Non-callable agency issued debt securities are generally valued using quoted market prices, quoted market prices for comparable securities or discounted cash flow models. Callable agency issued debt securities are valued by benchmarking model-derived prices to quoted market prices and trade data for identical or comparable securities. The fair value of mortgage pass-through securities is model driven with respect to spreads of the comparable to-be-announced ("TBA") security.
Sovereign Obligations
The fair value of sovereign obligations is determined based on quoted market prices when available or a valuation model that generally utilizes interest rate yield curves and credit spreads as inputs.
Corporate Debt and Other Obligations
The fair value of corporate bonds is estimated using recent transactions, broker quotations and bond spread information.

Mortgage and Other Asset-Backed Securities
The Company values non-agency securities collateralized by home equity and various other types of collateral based on external pricing and spread data provided by independent pricing services. When specific external pricing is not observable, the valuation is based on yields and spreads for comparable bonds.
Municipal Obligations
The fair value of municipal obligations is estimated using recently executed transactions, broker quotations, and bond spread information.
Convertible Bonds
The fair value of convertible bonds is estimated using recently executed transactions and dollar-neutral price quotations, where observable. When observable price quotations are not available, fair value is determined based on cash flow models using yield curves and bond spreads as key inputs.
Corporate Equities
Equity securities and options are generally valued based on quoted prices from the exchange or market where traded. To the extent quoted prices are not available, fair values are generally derived using bid/ask spreads.

Auction Rate Securities ("ARS")
Background
In February 2010, Oppenheimer finalized settlements with each of the New York Attorney General's office and the Massachusetts Securities Division (collectively, the "Regulators") concluding proceedings by the Regulators concerning Oppenheimer's marketing and sale of ARS. Pursuant to the settlements with the Regulators, Oppenheimer agreed to extend offers to repurchase ARS from certain of its clients. As of September 30, 2021, the Company had completed its ARS purchase obligations related to the settlements with the Regulators. In addition to the settlements with the Regulators, Oppenheimer had also reached settlements of and received adverse awards in legal proceedings with various clients where the Company was obligated to purchase ARS. As of March 31, 2023, the Company no longer had any obligations to purchase ARS from such legal settlements or adverse awards.
As of March 31, 2023, the Company owned $31.8 million of ARS. This amount represents the unredeemed or unsold amount that the Company holds as a result of ARS buybacks pursuant to the settlements with the Regulators and legal settlements and awards referred to above.
Valuation
The Company’s ARS owned referred to above have, for the most part, been subject to issuer tender offers. The Company has valued the ARS securities owned at the tender offer price and categorized them in Level 3 of the fair value hierarchy due to the illiquid nature of the securities and the period of time since the last tender offer. The fair value of ARS is particularly sensitive to movements in interest rates. However, an increase or decrease in short-term interest rates may or may not result in a higher or lower tender offer in the future or the tender offer price may not provide a reasonable estimate of the fair value of the securities. In such cases, other valuation techniques might be necessary.

As of March 31, 2023, the Company had a valuation allowance totaling $5.2 million relating to ARS owned (which is included as a reduction to securities owned on the condensed consolidated balance sheet).

Investments    
In its role as general partner in certain hedge funds and private equity funds, the Company, through its subsidiaries, holds direct investments in such funds. The Company uses the net asset value of the underlying fund as a basis for estimating the fair value of its investment.
The following table provides information about the Company's investments in Company-sponsored funds as of March 31, 2023:
(Expressed in thousands)    
 Fair ValueUnfunded
Commitments		Redemption
Frequency		Redemption
Notice Period
Hedge funds (1)
$554 $— Quarterly - Annually
30 - 120 Days
Private equity funds (2)
12,747 2,893 N/AN/A
$13,301 $2,893 
(1) Includes investments in hedge funds and hedge fund of funds that pursue long/short, event-driven, and activist strategies
(2) Includes private equity funds and private equity fund of funds with diversified portfolios focusing on but not limited to
technology companies, venture capital and global natural resources

The following table provides information about the Company's investments in Company-sponsored funds as of December 31, 2022:

(Expressed in thousands)    
 Fair ValueUnfunded
Commitments		Redemption
Frequency		Redemption
Notice Period
Hedge funds (1)
$574 $— Quarterly - Annually
30 - 120 Days
Private equity funds (2)
8,221 3,018 N/AN/A
$8,795 $3,018 
(1) Includes investments in hedge funds and hedge fund of funds that pursue long/short, event-driven, and activist strategies.
(2) Includes private equity funds and private equity fund of funds with diversified portfolios focusing on but not limited to technology companies, venture capital and global natural resources.

During 2020, the Company made an investment in a financial technologies firm. The Company elected the fair value option for this investment and it is included in other assets on the condensed consolidated balance sheet. The Company determined the fair value of the investment based on an implied market-multiple approach and observable market data, including comparable company transactions. As of March 31, 2023, the fair value of the investment was $6.0 million and was categorized in Level 2 of the fair value hierarchy.

Assets and Liabilities Measured at Fair Value
The Company's assets and liabilities, recorded at fair value on a recurring basis as of March 31, 2023, and December 31, 2022, have been categorized based upon the above fair value hierarchy as follows:
Assets and liabilities measured at fair value on a recurring basis as of March 31, 2023:
(Expressed in thousands)    
 
Fair Value Measurements as of March 31, 2023
 Level 1Level 2Level 3Total
Assets
Deposits with clearing organizations$25,211 $— $— $25,211 
Securities owned:
U.S. Treasury securities618,227 — — 618,227 
U.S. Agency securities— 7,994 — 7,994 
Corporate debt and other obligations— 4,591 — 4,591 
Mortgage and other asset-backed securities— 2,741 — 2,741 
Municipal obligations— 38,183 — 38,183 
Convertible bonds— 29,812 — 29,812 
Corporate equities27,311 — — 27,311 
Money markets— 1,519 — 1,519 
Auction rate securities— — 31,776 31,776 
Securities owned, at fair value645,538 84,840 31,776 762,154 
Investments (1)
5,242 9,794 — 15,036 
TBAs— 21 — 21 
Derivative contracts, total— 21 — 21 
Total$675,991 $94,655 $31,776 $802,422 
Liabilities
Securities sold but not yet purchased:
U.S. Treasury securities$82,387 $— $— $82,387 
U.S. Agency securities— 2 — 2 
Corporate debt and other obligations— 208 — 208 
Convertible bonds— 13,732 — 13,732 
Corporate equities14,328 — — 14,328 
Securities sold but not yet purchased, at fair value96,715 13,942 — 110,657 
Derivative contracts:
Futures51 — — 51 
TBAs— 19 — 19 
Derivative contracts, total51 19 — 70 
Total$96,766 $13,961 $— $110,727 
(1) Included in other assets on the condensed consolidated balance sheet.
Assets and liabilities measured at fair value on a recurring basis as of December 31, 2022:
(Expressed in thousands)    
 
Fair Value Measurements as of December 31, 2022
 Level 1Level 2Level 3Total
Assets
Deposits with clearing organizations$24,937 $— $— $24,937 
Securities owned:
U.S. Treasury securities362,815 — — 362,815 
U.S. Agency securities— 6,012 — 6,012 
Sovereign obligations— 9,502 — 9,502 
Corporate debt and other obligations— 9,844 — 9,844 
Mortgage and other asset-backed securities— 1,882 — 1,882 
Municipal obligations— 30,126 — 30,126 
Convertible bonds— 21,800 — 21,800 
Corporate equities24,837 — — 24,837 
Money markets— — — — 
Auction rate securities— — 31,776 31,776 
Securities owned, at fair value387,652 79,166 31,776 498,594 
Investments (1)
— 7,068 — 7,068 
Derivative contracts:
TBAs— 1,762 — 1,762 
Total$412,589 $87,996 $31,776 $532,361 
Liabilities
Securities sold but not yet purchased:
U.S. Treasury securities$25,006 $— $— $25,006 
U.S. Agency securities— 3 — 3 
Corporate debt and other obligations— 2,905 — 2,905 
Convertible bonds— 4,428 — 4,428 
Corporate equities11,378 — — 11,378 
Securities sold but not yet purchased, at fair value36,384 16,384 — 52,768 
Derivative contracts:
Futures44 — — 44 
TBAs— 1,761 — 1,761 
Derivative contracts, total44 1,761 — 1,805 
Total$36,428 $18,145 $— $54,573 
(1) Included in other assets on the condensed consolidated balance sheet.    
The following tables present changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the three months ended March 31, 2023 and 2022:
(Expressed in thousands)
Level 3 Assets and Liabilities
For the Three Months Ended March 31, 2023
Total Realized
Beginningand UnrealizedPurchasesSales andTransfersEnding
Balance
Losses
and IssuancesSettlementsIn (Out)Balance
Assets
Auction rate securities (1)
$31,776 $— $— $— $— $31,776 
Liabilities
ARS Purchase Commitments (2)
— — — — — — 
(1) Represents auction rate securities that failed in the auction rate market.
(2) Represents the difference in principal and fair value for auction rate securities purchase commitments outstanding at the end of the period.

(Expressed in thousands)
Level 3 Assets and Liabilities
For the Three Months Ended March 31, 2022
Total Realized
Beginningand UnrealizedPurchasesSales andTransfersEnding
BalanceLossesand IssuancesSettlementsIn (Out)Balance
Assets
Auction rate securities (1)
$31,804 $— $— $— $— $31,804 
Liabilities
ARS Purchase Commitments (2)
— — — — — — 
(1) Represents auction rate securities that failed in the auction rate market.
(2) Represents the difference in principal and fair value for auction rate securities purchase commitments outstanding at the end of the period.

Financial Instruments Not Measured at Fair Value
The table below presents the carrying value, fair value and fair value hierarchy category of certain financial instruments that are not measured at fair value on the condensed consolidated balance sheets. The table below excludes non-financial assets and liabilities (e.g., furniture, equipment and leasehold improvements, and accrued compensation).
The carrying value of financial instruments not measured at fair value categorized in the fair value hierarchy as Level 1 or Level 2 (e.g., cash and receivables from customers) approximates fair value because of the relatively short-term nature of the underlying assets. The fair value of the Company's senior secured notes, categorized in Level 2 of the fair value hierarchy, is based on quoted prices from the market in which the notes trade.
Assets and liabilities not measured at fair value as of March 31, 2023:
(Expressed in thousands) Fair Value Measurement: Assets
 Carrying ValueLevel 1Level 2Level 3Total
Cash$30,320 $30,320 $— $— $30,320 
Restricted cash25,581 25,581 — — 25,581 
Deposits with clearing organization44,094 44,094 — — 44,094 
Receivable from brokers, dealers and clearing organizations:
Securities borrowed256,508 — 256,508 — 256,508 
Receivables from brokers72,942 — 72,942 — 72,942 
Securities failed to deliver12,488 — 12,488 — 12,488 
Clearing organizations and other 19,099 — 19,099 — 19,099 
361,037 — 361,037 — 361,037 
Receivable from customers1,054,316 — 1,054,316 — 1,054,316 
Notes receivable, net63,649 — 63,649 — 63,649 
Investments (1)
83,302 — 83,302 — 83,302 
(1) Included in other assets on the condensed consolidated balance sheet.
(Expressed in thousands) Fair Value Measurement: Liabilities
 Carrying ValueLevel 1Level 2Level 3Total
Drafts payable$18,024 $18,024 $— $— $18,024 
Bank call loans$19,300 $— $19,300 $— $19,300 
Payables to brokers, dealers and clearing organizations:
Securities loaned368,101 — 368,101 — 368,101 
Payable to brokers226 — 226 — 226 
Securities failed to receive10,105 — 10,105 — 10,105 
Clearing organization and other257,487 — 257,487 — 257,487 
635,919 — 635,919 — 635,919 
Payables to customers458,588 — 458,588 — 458,588 
Securities sold under agreements to repurchase280,436 — 280,436 — 280,436 
Senior secured notes113,050 — 105,986 — 105,986 

Assets and liabilities not measured at fair value as of December 31, 2022:
(Expressed in thousands) Fair Value Measurement: Assets
 Carrying ValueLevel 1Level 2Level 3Total
Cash$112,433 $112,433 $— $— $112,433 
Restricted cash25,534 25,534 — — 25,534 
Deposits with clearing organization52,754 52,754 — — 52,754 
Receivable from brokers, dealers and clearing organizations:
Securities borrowed127,817 — 127,817 — 127,817 
Receivables from brokers49,125 — 49,125 — 49,125 
Securities failed to deliver9,099 — 9,099 — 9,099 
Clearing organizations20,035 — 20,035 — 20,035 
Other— — — — — 
206,076 — 206,076 — 206,076 
Receivable from customers1,202,764 — 1,202,764 — 1,202,764 
Securities purchased under agreements to resell— — — — — 
Notes receivable, net57,495 — 57,495 — 57,495 
Investments (1)
79,322 — 79,322 — 79,322 
(1) Included in other assets on the condensed consolidated balance sheet.
(Expressed in thousands) Fair Value Measurement: Liabilities
 Carrying ValueLevel 1Level 2Level 3Total
Bank call loans$— $— $— $— $— 
Payables to brokers, dealers and clearing organizations:
Securities loaned320,843 — 320,843 — 320,843 
Payable to brokers123 — 123 — 123 
Securities failed to receive62,646 — 62,646 — 62,646 
Other166,350 — 166,350 — 166,350 
549,962 — 549,962 — 549,962 
Payables to customers456,475 — 456,475 — 456,475 
Securities sold under agreements to repurchase161,009 — 161,009 — 161,009 
Senior secured notes114,050 — 113,233 — 113,233 

Fair Value Option
The Company elected the fair value option for securities sold under agreements to repurchase ("repurchase agreements") and securities purchased under agreements to resell ("reverse repurchase agreements") that do not settle overnight or have an open settlement date. The Company has elected the fair value option for these instruments to reflect more accurately market and economic events in its earnings and to mitigate a potential mismatch in earnings caused by using different measurement attributes (i.e. fair value versus carrying value) for certain assets and liabilities. As of March 31, 2023, the Company had no repurchase agreements and reverse repurchase agreements that do not settle overnight or have an open settlement date.
Derivative Instruments and Hedging Activities
The Company transacts, on a limited basis, in exchange traded and over-the-counter derivatives for both asset and liability management as well as for trading and investment purposes. Risks managed using derivative instruments include interest rate risk and, to a lesser extent, foreign exchange risk. All derivative instruments are measured at fair value and are recognized as either assets or liabilities on the condensed consolidated balance sheet.

Foreign exchange hedges
From time to time, the Company also utilizes forward and options contracts to hedge the foreign currency risk associated with compensation obligations to Oppenheimer Israel (OPCO) Ltd. employees denominated in New Israeli Shekel ("NIS"). Such hedges have not been designated as accounting hedges. Unrealized gains and losses on foreign exchange forward contracts are recorded in other assets or other liabilities on the condensed consolidated balance sheet and other income in the condensed consolidated income statement.
Derivatives used for trading and investment purposes
Futures contracts represent commitments to purchase or sell securities or other commodities at a future date and at a specified price. Market risk exists with respect to these instruments. Notional or contractual amounts are used to express the volume of these transactions and do not represent the amounts potentially subject to market risk. The Company uses futures contracts, including U.S. Treasury notes, Federal Funds, General Collateral futures, and Eurodollar contracts primarily as an economic hedge of interest rate risk associated with government trading activities. Unrealized gains and losses on futures contracts are recorded on the condensed consolidated balance sheet in payable to brokers, dealers and clearing organizations and in the condensed consolidated income statement as principal transactions revenue, net.

To-be-announced securities
The Company also transacts in pass-through mortgage-backed securities eligible to be sold in the TBA market as economic hedges against mortgage-backed securities that it owns or has sold but not yet purchased. TBAs provide for the forward or delayed delivery of the underlying instrument with settlement up to 180 days. The contractual or notional amounts related to these financial instruments reflect the volume of activity and do not reflect the amounts at risk. Net unrealized gains and losses on TBAs are recorded on the condensed consolidated balance sheet in receivable from brokers, dealers and clearing organizations or payable to brokers, dealers and clearing organizations and in the condensed consolidated income statement as principal transactions revenue, net.

The notional amounts and fair values of the Company's derivatives as of March 31, 2023 and December 31, 2022 by product were as follows:
(Expressed in thousands)   
 
Fair Value of Derivative Instruments as of March 31, 2023
 DescriptionNotionalFair Value
Assets:
Derivatives not designated as hedging instruments (1)
Other contractsTBAs$1,227 $21 
Forward reverse repurchase agreements 15,000 — 
$16,227 $21 
Liabilities:
Derivatives not designated as hedging instruments (1)
Commodity contracts
Futures$3,880,000 $51 
       Other contractsTBAs1,277 19 
$3,881,277 $70 
(1)See "Derivative Instruments and Hedging Activities" above for a description of derivative financial instruments. Such derivative instruments are not subject to master netting agreements, thus the related amounts are not offset.
(Expressed in thousands)   
 Fair Value of Derivative Instruments as of December 31, 2022
 DescriptionNotionalFair Value
Assets:
Derivatives not designated as hedging instruments (1)
Other contractsTBAs$1,775 $1,762 
Forward reverse repurchase agreements15,000 — 
Other275 $— 
$17,050 $1,762 
Liabilities:
Derivatives not designated as hedging instruments (1)
Commodity contracts
Futures$1,912,500 $44 
       Other contractsTBAs1,775 1,761 
$1,914,275 $1,805 
(1)See "Derivative Instruments and Hedging Activities" above for a description of derivative financial instruments. Such derivative instruments are not subject to master netting agreements, thus the related amounts are not offset.

The following table presents the location and fair value amounts of the Company's derivative instruments and their effect in the condensed consolidated income statements for the three months ended March 31, 2023 and 2022:
(Expressed in thousands)   
 The Effect of Derivative Instruments in the Income Statement
 
For the Three Months Ended March 31, 2023
  Recognized in Income on Derivatives
(pre-tax)
TypesDescriptionLocationNet Gain/(Loss)
Commodity contractsFuturesPrincipal transactions revenue, net$210 
Other contractsForeign exchange forward contractsOther revenue(1)
Other contractsTBAsPrincipal transactions revenue, net2 
$211 
(Expressed in thousands)   
 The Effect of Derivative Instruments in the Income Statement
 
For the Three Months Ended March 31, 2022
  Recognized in Income on Derivatives
(pre-tax)
TypesDescriptionLocationNet Gain
Commodity contractsFuturesPrincipal transactions revenue, net$2,191 
Other contractsTBAsPrincipal transactions revenue, net63 
$2,254