(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [ ] Yes [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [ ] Accelerated filer [X] Non-accelerated filer [ ] Smaller reporting company [ ]

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

The number of shares of the Company’s Class A non-voting common stock and Class B voting common stock (being the only classes of common stock of the Company) outstanding on ~~July 31, 2009~~April 30, 2010 was ~~12,971,067~~13,241,552 and 99,680 shares, respectively.

OPPENHEIMER HOLDINGS INC.	OPPENHEIMER HOLDINGS INC.			OPPENHEIMER HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)	CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)			CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

		June 30, 2009	December 31, 2008		March 31, 2010	December 31, 2009
(Expressed in thousands of dollars)
ASSETS
Cash and cash equivalents		$48,113	$46,685		$52,190	$68,918
Cash and securities segregated for regulatory and
other purposes		67,415	57,033		86,667	78,133
Deposits with clearing organizations		20,737	14,355		29,198	25,798
Receivable from brokers and clearing organizations		392,417	278,235		352,266	390,912
Receivable from customers, net of allowance for
doubtful accounts of $2.6 million ($2.0 million in 2008)		720,341	647,486
doubtful accounts of $2,407 ($2,378 in 2009)					795,221	826,658
Income taxes receivable		7,181	12,647		13,210	5,509
Securities purchased under agreement to resell		161,399	-		350,250	163,825
Securities owned, including amounts pledged of $3.6 million
million ($1.9 million in 2008), at fair value		183,675	127,479
Securities owned, including amounts pledged of $1,482
($623 in 2009), at fair value					395,705	238,372
Notes receivable, net		63,828	53,446		59,596	61,396
Office facilities, net		24,998	27,224		20,605	22,356
Deferred income tax, net					5,096	15,359
Intangible assets, net		47,588	50,117		44,222	45,303
Goodwill		132,472	132,472		132,472	132,472
Other		93,856	82,405		131,338	128,372
		$1,964,020	$1,529,584		$2,468,036	$2,203,383

The accompanying notes are an integral part of these condensed consolidated financial statements.

OPPENHEIMER HOLDINGS INC.	OPPENHEIMER HOLDINGS INC.				OPPENHEIMER HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)	CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)				CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

		June 30, 2009		December 31, 2008		March 31, 2010		December 31, 2009
(Expressed in thousands of dollars)
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Liabilities	Liabilities				Liabilities
Drafts payable	Drafts payable		$29,159	$52,565	Drafts payable		$35,349	$48,097
Bank call loans	Bank call loans		86,600	6,500	Bank call loans		37,600	-
Payable to brokers and clearing organizations	Payable to brokers and clearing organizations		437,022	159,648	Payable to brokers and clearing organizations		459,317	436,018
Payable to customers	Payable to customers		334,085	408,303	Payable to customers		405,942	488,360
Securities sold under agreement to repurchase	Securities sold under agreement to repurchase		169,780	-	Securities sold under agreement to repurchase		342,356	155,625
Securities sold, but not yet purchased, at fair value	Securities sold, but not yet purchased, at fair value		59,648	27,454	Securities sold, but not yet purchased, at fair value		278,817	131,739
Accrued compensation	Accrued compensation		138,771	178,983	Accrued compensation		123,436	202,525
Accounts payable and other liabilities	Accounts payable and other liabilities		131,338	112,031	Accounts payable and other liabilities		181,903	150,049
Senior secured credit note	Senior secured credit note		37,303	47,663	Senior secured credit note		32,003	32,503
Subordinated note	Subordinated note		100,000	100,000	Subordinated note		100,000	100,000
Deferred income tax, net			1,280	4,538
Excess of fair value of acquired assets over cost	Excess of fair value of acquired assets over cost		6,173	6,173	Excess of fair value of acquired assets over cost		7,020	7,020
			1,531,159	1,103,858			2,003,743	1,751,936


Shareholders' equity
Equity					Equity
Oppenheimer Holdings Inc. stockholders' equity					Oppenheimer Holdings Inc. stockholders' equity
Share capital	Share capital				Share capital
Class A non-voting common stock (2009 – 12,971,067 shares issued and outstanding 2008 – 12,899,465 shares issued and outstanding)			44,648	43,520
Class A non-voting common stock (2010 – 13,241,552 shares issued and outstanding 2009 – 13,118,001 shares issued and outstanding)					Class A non-voting common stock (2010 – 13,241,552 shares issued and outstanding 2009 – 13,118,001 shares issued and outstanding)		51,025	47,691
Class B voting common stock	Class B voting common stock				Class B voting common stock
99,680 shares issued and outstanding	99,680 shares issued and outstanding		133	133	99,680 shares issued and outstanding		133	133
			44,781	43,653			51,158	47,824
Contributed capital	Contributed capital		38,044	34,924	Contributed capital		42,887	41,978
Retained earnings	Retained earnings		350,712	348,477	Retained earnings		369,893	362,188
Accumulated other comprehensive loss	Accumulated other comprehensive loss		(676)	(1,328)	Accumulated other comprehensive loss		(625)	(543)
			432,861	425,726
Total Oppenheimer Holdings Inc. stockholders’ equity					Total Oppenheimer Holdings Inc. stockholders’ equity		463,313	451,447
Noncontrolling interest					Noncontrolling interest		980	-
Total equity					Total equity		464,293	451,447
			$1,964,020	$1,529,584			$2,468,036	$2,203,383

The accompanying notes are an integral part of these condensed consolidated financial statements.	The accompanying notes are an integral part of these condensed consolidated financial statements.				The accompanying notes are an integral part of these condensed consolidated financial statements.

	Three months ended		Six months ended		Three months ended
	June 30,		June 30,		March 31,
	2009	2008	2009	2008	2010	2009
Expressed in thousands of dollars, except per share amounts
REVENUES:
REVENUE:
Commissions	$142,713	$126,530	$266,509	$257,838	$138,197	$123,796
Principal transactions, net	30,201	19,228	54,942	29,107	16,675	24,741
Interest	8,668	17,126	16,190	35,146	13,769	7,522
Investment banking	21,909	36,348	30,501	52,551	25,184	8,592
Advisory fees	35,511	51,480	71,275	106,584	42,794	35,764
Other	11,722	5,529	16,572	6,890	10,243	4,850
	250,724	256,241	455,989	488,116	246,862	205,265
EXPENSES:
Compensation and related expenses	167,902	168,313	308,564	340,709	158,179	140,662
Clearing and exchange fees	6,735	8,473	12,473	16,241	6,562	5,738
Communications and technology	14,530	18,488	34,281	35,459	16,440	19,751
Occupancy and equipment costs	18,283	17,880	36,516	34,554	18,460	18,233
Interest	5,043	11,528	10,586	23,670	5,988	5,543
Other	25,255	29,374	43,415	62,086	25,373	18,160
	237,748	254,056	445,835	512,719	231,002	208,087
Profit (loss) before income taxes	12,976	2,185	10,154	(24,603)	15,860	(2,822)
Income tax provision (benefit)	5,846	539	5,038	(10,135)	6,496	(808)
Net profit (loss) for the period	$7,130	$1,646	$5,116	$(14,468)	9,364	(2,014)
Less net profit attributable to non-controlling
interest, net of tax					196	-
Net profit (loss) attributable to Oppenheimer
Holdings Inc.					$9,168	$(2,014)

Profit (loss) per share:
Profit (loss) per share attributable to Oppenheimer Holdings Inc.:
Basic	$0.55	$0.12	$0.39	$(1.07)	$0.69	$(0.15)
Diluted	$0.54	$0.12	$0.38	$(1.07)	$0.66	$(0.15)

Dividends declared per share	$0.11	$0.11	$0.22		$0.11

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Three months ended		Six months ended		Three months ended
	June 30,		June 30,		March 31,
	2009	2008	2009	2008	2010	2009
Expressed in thousands of dollars, except per share amounts
Net profit (loss) for the period	$7,130	$1,646	$5,116	$(14,468)	$9,364	$(2,014)
Other comprehensive income (loss):
Currency translation adjustment	535	494	(319)	511	285	(854)
Change in cash flow hedges, net of tax	170	659	420	64	(367)	(131)
Change in interest rate cap, net of tax	932	-	551	-
Comprehensive income (loss) for the period	$8,767	$2,799	$5,768	$(13,893)	9,282	(2,999)
Comprehensive income attributable to non-controlling interests					196	-
Comprehensive income (loss) attributable to Oppenheimer Holdings Inc.					$9,086	$(2,999)

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Six months ended June 30,		Three months ended March 31,
	2009	2008	2010	2009
Expressed in thousands of dollars

Cash flows from operating activities:
Net profit (loss) for the period	$5,116	$(14,468)	$9,364	$(2,014)
Adjustments to reconcile net profit ( loss) to net cash used in operating activities:
Non-cash items included in net profit (loss):
Depreciation and amortization	6,381	5,584	3,088	3,102
Deferred income tax	(3,258)	(6,238)	10,263	(2,397)
Amortization of notes receivable	8,729	8,144	4,916	4,042
Amortization of debt issuance costs	571	690	233	309
Amortization of intangibles	2,529	2,527	1,081	1,264
Provision for doubtful accounts	539	26	29	148
Share-based compensation	6,759	(1,637)	(1,769)	1,496
Decrease (increase) in operating assets:
Cash and securities segregated for regulatory and other purposes	(10,382)	(11,202)	(8,534)	(3,707)
Deposits with clearing organizations	(6,382)	(35,904)	(3,400)	(18,555)
Receivable from brokers and clearing organizations	(114,182)	175,346	38,646	1,277
Receivable from customers	(73,394)	(182,120)	31,408	56,562
Income taxes receivable	5,466	(6,150)	(8,226)	(2,146)
Securities purchased under agreement to resell	(161,399)	-	(186,425)	-
Securities owned	(56,196)	(14,917)	(157,333)	(12,325)
Notes receivable	(19,111)	(16,791)	(3,116)	(6,654)
Other	(12,341)	35,276	(2,914)	(7,644)
Increase (decrease) in operating liabilities:
Drafts payable	(23,406)	(20,005)	(12,748)	(11,920)
Payable to brokers and clearing organizations	278,345	(140,978)	22,932	71,531
Payable to customers	(74,218)	44,805	(82,418)	(28,621)
Securities sold under agreement to repurchase	169,780	-	186,731	-
Securities sold, but not yet purchased	32,194	5,002	147,078	4,443
Accrued compensation	(42,137)	3,961	(75,015)	(65,311)
Accounts payable and other liabilities	19,307	68,530	33,163	1,581
Income taxes payable	-	(11,020)
Cash used in operating activities	(60,690)	(111,539)	(52,966)	(15,539)

	Six months ended June 30,		Three months ended March 31,
	2009	2008	2010	2009
Expressed in thousands of dollars

Cash flows from investing activities:
Acquisitions, net of cash acquired	-	(50,335)
Purchase of office facilities	(4,155)	(7,947)	(1,337)	(2,578)
Cash used in investing activities	(4,155)	(58,282)	(1,337)	(2,578)

Cash flows from financing activities:
Cash dividends paid on Class A non-voting and Class B common stock	(2,881)	(2,994)	(1,463)	(1,443)
Issuance of Class A non-voting common stock	-	5,738	2,002	-
Repurchase of Class A non-voting common stock for cancellation	(559)	(9,437)	-	(559)
Tax benefit (shortfall) from share-based compensation	(27)	698
Issuance of subordinated note	-	100,000
Tax shortfall from share-based compensation			(64)	(27)
Senior secured credit note repayments	(10,360)	(20,375)	(500)	(9,960)
Increase in bank call loans, net	80,100	127,300	37,600	26,500
Cash provided by financing activities	66,273	200,930	37,575	14,511

Net increase in cash and cash equivalents	1,428	31,109
Net decrease in cash and cash equivalents			(16,728)	(3,606)
Cash and cash equivalents, beginning of period	46,685	27,702	68,918	46,685
Cash and cash equivalents, end of period	$48,113	$58,811	$52,190	$43,079

Schedule of non-cash investing and financing activities:
Warrants issued	-	$10,487
Employee share plan issuance	$1,687	$2,046	$1,332	$1,659

Supplemental disclosure of cash flow information:
Cash paid during the periods for interest	$7,730	$16,446	$5,214	$4,174
Cash paid during the periods for income taxes	$3,064	$8,865	$4,079	$1,009

The accompanying notes are an integral part of these condensed consolidated financial statements.

OPPENHEIMER HOLDINGS INC.	OPPENHEIMER HOLDINGS INC.		OPPENHEIMER HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (unaudited)

	Six months ended June 30,
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited)			CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited)
AS AT MARCH 31,			AS AT MARCH 31,
	2009	2008	2010	2009
Expressed in thousands of dollars

Share capital
Balance at beginning of period	$43,653	$53,054	$47,824	$43,653
Issuance of Class A non-voting common stock	1,687	7,784	3,334	1,659
Repurchase of Class A non-voting common stock for cancellation	(559)	(9,437)	-	(559)
Balance at end of period	$44,781	$51,401	$51,158	$44,753

Contributed capital
Balance at beginning of period	$34,924	$16,760	$41,978	$34,924
Issuance of warrant to purchase 1 million Class A non-voting common shares	-	10,487
Vested employee share plan awards	(177)	(355)	(1,287)	(177)
Tax benefit (shortfall) from share-based awards	(27)	698
Tax benefit from share-based awards			(64)	(27)
Share-based expense	3,324	3,154	2,260	1,651
Balance at end of period	$38,044	$30,744	$42,887	$36,371

Retained earnings
Balance at beginning of period	$348,477	$375,137	$362,188	$348,477
Net profit (loss) for the period	5,116	(14,468)
Dividends ($0.22 per share in 2009 and 2008)
Net profit (loss) for the period attributable to Oppenheimer Holdings Inc.			9,168	(2,014)
Dividends ($0.11 per share in 2010 and 2009)
Balance at end of period	$350,712	$357,675	$369,893	$345,020

Accumulated other comprehensive income (loss)
Balance at beginning of period
Currency translation adjustment	(319)	511	285	(854)
Change in cash flow hedges, net of tax	420	64	(367)	(131)
Change in interest rate cap, net of tax	551	-
Balance at end of period	$(676)	$(396)	$(625)	$(2,313)

Shareholders’ equity	$432,861	$439,424
Stockholders’ Equity of Oppenheimer Holdings Inc.			$463,313	$423,831
Non-controlling interest
Grant of non-controlling interest			$784	-
Net profit attributable to non-controlling interest for the period, net of tax			196	-
Balance at end of period			$980	-

Total equity			$464,293	$423,831

The accompanying notes are an integral part of these condensed consolidated financial statements.

Oppenheimer Holdings Inc. (”OPY") is incorporated under the laws of the State of Delaware. On May 11, 2009, the jurisdiction of incorporation of OPY was changed from Canada to Delaware. The consolidated financial statements include the accounts of OPY and its subsidiaries (together, the “Company”). The principal subsidiaries of OPY are Oppenheimer & Co. Inc. ("Oppenheimer"), a registered broker dealer in securities, Oppenheimer Asset Management Inc. (“OAM”) and its wholly owned subsidiary, Oppenheimer Investment Management Inc. (“OIM”), both registered investment advisors under the Investment Advisors Act of 1940, Oppenheimer Trust Company, a limited purpose trust company chartered by the State of New Jersey to provide fiduciary services such as trust and estate administration and investment management, Evanston Financial Corporation (“Evanston”), which is engaged in mortgage brokerage and servicing, and OPY Credit Corp.,which offers syndication as well as trading of issued corporate loans. Oppenheimer EUE.U. Ltd., based in the United Kingdom, provides institutional equities and fixed income brokerage and corporate financial services and is regulated by the Financial Services Authority. ~~Oppenheimer EU Ltd. began operations on September 5, 2008.~~ Oppenheimer Investments Asia Limited, based in Hong Kong, China, provides assistance in accessing the U.S. equities markets and limited mergers and acquisitions advisory services to Asia-based companies. Oppenheimer operates as Fahnestock & Co. Inc. in Latin America. Oppenheimer owns Freedom Investments, Inc. (“Freedom”), a registered broker dealer in securities, which also operates as the BUYandHOLD division of Freedom, offering on-line discount brokerage and dollar-based investing services, and Oppenheimer Israel (OPCO) Ltd., which is engaged in ~~of fering~~offering investment services in the State of Israel as a local broker dealer. Oppenheimer holds a trading permit on the New York Stock Exchange and is a member of several other regional exchanges in the United States.

The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ~~(GAAP)~~(“GAAP”). These accounting principles are set out in the notes to the Company’s consolidated financial statements for the year ended December 31, ~~2008~~2009 included in its Annual Report on Form 10-K for the year then ended.

~~In June 2009,~~The Company has issued 32.66 common shares of its Evanston subsidiary to two founding members of Evanston. Accounting standards require the Company ~~significantly expanded its government trading operations~~to present non-controlling interests (previously referred to as minority interests) as a separate component of stockholders’ equity on the Company’s condensed consolidated balance sheet. As of March 31, 2010, the Company owns 67.34% of Evanston and ~~began financing those operations through~~ the use of securities sold under agreements to repurchase (“repurchase agreements”) and securities purchased under agreements to resell (“reverse repurchase agreements”). Repurchase and reverse repurchase agreements, principally involving government and agency securities, are carried at amounts at which securities subsequently will be resold or reacquired as specified in the respective agreements and include accrued interest. Repurchase and reverse repurchase agreements are presented on a net-by-counterparty basis, when the conditions of FASB Interpretation No. 41,~~“Offsetting of Amounts Related to Certain Repurchase and Reverse Repurchase Agreements”~~(“FIN 41”) have been met. FIN 41 permits the offsetting of amounts recognized as payables under repurchase agreements and amounts recognized as receivables under reverse repurchase agreements if the repurchase and reverse repurchase agreements are executed with the same counterparty, have the same explicit settlement date, are executed in accordance with a master netting arrangement, securities underlying the repurchase and reverse repurchase agreements exist in “book entry” form and certain other requirements are met.

~~Certain prior period amounts~~non-controlling interest recorded in the condensed consolidated ~~statement~~balance sheet was $980,000.

The Company identified certain over-accruals in compensation and related expenses relating to prior periods which the Company has adjusted in the current period. These out-of-period adjustments, which were not material to any prior period, resulted in a decrease to compensation and related expenses of ~~operations have been reclassified to conform with current presentation. Total revenues, total expenses, profit (loss) before income taxes, income tax provision (benefit) and net profit (loss)~~$3.7 million for the ~~period were not affected.~~

The condensed consolidated financial statements include all adjustments, which in the opinion of management are normal and recurring and necessary for a fair statement of the results of operations, financial position and cash flows for the interim periods presented. The nature of the Company’s business is such that the results of operations for the interim periods are not necessarily indicative of the results to be expected for a full year.

Disclosures reflected in these condensed consolidated financial statements comply in all material respects with those required pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) with respect to quarterly financial reporting.

~~These condensed consolidated financial statements are presented in U.S. dollars.~~

~~Recently Issued~~The Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") is effective for financial reporting periods ending after September 15, 2009. The ASC is now the single source of authoritative generally accepted accounting principles applicable to non-governmental entities in the United States.

In June 2009, the FASB ~~issued SFAS No. 166,~~~~“Accounting~~updated the accounting guidance for ~~Transfers~~transfers of ~~Financial Assets—an amendment of FASB Statement No. 140~~~~” (“SFAS 166”). SFAS 166~~financial assets. The updated guidance eliminates the concept of a qualifying special-purpose entity (“QSPE”) and establishes a new “participating interest” definition that must be met for transfers of portions of financial assets to be eligible for sale accounting. In addition, ~~SFAS 166~~the updated guidance provides clarification and amendments to the derecognition criteria for a transfer to be accounted for as a sale and changes the amount of recognized gains or losses on transfers accounted for as a sale when beneficial interests are received by the transferor. ~~SFAS 166~~The updated guidance also ~~has~~provides extensive new disclosure requirements for collateral transferred, servicing assets and liabilities, transfers accounted for as sales in securitization and asset-backed ~~fina ncing~~financing arrangements when the transferor has ~~continuing~~co ntinuing involvement with the transferred assets, and transfers of financial assets accounted for as secured borrowings. The ~~standard will~~updated guidance is to be applied prospectively to new transfers of financial assets occurring in fiscal years beginning after November 15, 2009. The ~~Company is currently evaluating the~~Company’s adoption did not have an impact ~~of adopting SFAS 166~~ on its financial condition, results of operations ~~and~~or cash flows.

In September 2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-12, “Investments in Certain Entities that Calculate Net Asset Value Per Share (or its Equivalent).” ASU No. 2009-12 provides guidance about using net asset value to measure the fair value of interests in certain investment funds and requires additional disclosures about interests in investment funds. ASU No. 2009-12 is effective for financial statements issued for reporting periods ending after December 15, 2009, with earlier application permitted. Because this update is consistent with the Company’s existing fair value measurement policy for its investment funds, the Company’s adoption did not have an impact on its financial condition, results of operations or cash flows.

In June 2009, the FASB ~~issued SFAS No. 167,~~~~“Amendments to FASB Interpretation No. 46(R)”~~ ~~(“SFAS 167”). SFAS 167~~updated the accounting guidance for consolidation. The updated guidance amends the consolidation ~~guidance~~framework for variable interest entities (“~~VIE’s)~~VIEs”) by requiring enterprises to qualitatively assess the determination of the primary beneficiary of a VIE based on whether the entity (1) has the power to direct matters that most significantly impact the activities of the VIE, and (2) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. ~~SFAS 167~~The updated guidance changes the consideration of “kick-out” rights in determining if an entity is a VIE, which may cause certain additional entities to now be considered VIEs. ~~In contrast to FIN 46(R), SFAS 167~~The updated guidance requires an ongoing reconsideration of the primary ~~benef iciary.~~beneficiary. It also amends the events that trigger a reassessment of whether an

entity is a VIE. ~~SFAS 167~~The updated guidance also expands ~~upon~~ the ~~new~~ disclosures required ~~by FSP No. FAS 140-4 and FIN 46(R)-8,~~~~“Disclosures by Public Entities (Enterprises) about Transfers~~in respect of ~~Financial Assets and Interests in Variable Interest Entities.”~~ ~~SFAS 167 is effective as of the first fiscal year that begins after November 15, 2009 with early adoption prohibited.~~VIEs. The transition requirements of ~~SFAS 167~~the updated guidance stipulate that assets, liabilities, and ~~noncontrolling~~non-controlling interests of the VIE be measured at their carrying amounts as if the statement had been applied from the inception of the VIE with any difference reflected as a cumulative effect adjustment. ~~The Company is currently evaluating the impact of adopting SFAS 167 on its financial condition, results of operations, and cash flows.~~

~~In December 2007, the FASB issued SFAS No. 141(R), “~~~~Business Combinations”~~ (“SFAS No. 141(R)”). SFAS 141(R) requires the acquiring entity in a business combination to recognize the full fair value of assets acquired and liabilities assumed in the transaction (whether a full or partial acquisition); establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; requires expensing of most transaction and restructuring costs; and requires the acquirer to disclose to investors and other users all of the information needed to evaluate and understand the nature and financial effect of the business combination. SFAS No. 141(R) applies to all transactions or other events in which the Company obtains control of one or more businesses, including those sometimes referred to as “true mergers” or “mergers of equals” and combinations achieved without the transfer of consideration, for example, by contract alone or through the lapse of minority veto rights. SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is on or after December 1, 2008.

In February ~~2008,~~2010, the FASB issued ~~FSP FAS~~ASU No. ~~140-3, “~~~~Accounting~~2010-10, “Consolidation – Amendments for ~~Transfers of Financial Assets and Repurchase Financing Transactions”~~~~(“FSP No. 140-3”). FSP No. 140-3 requires an initial transfer of a financial asset and a repurchase financing~~Certain Investment Funds”, that ~~was entered into contemporaneously or in contemplation~~will indefinitely defer the effective date of the ~~initial transfer~~updated VIE accounting guidance for certain investment funds. To qualify for the deferral, the investment fund needs to ~~be evaluated as~~meet certain attributes of an investment company, does not have explicit or implicit obligations to fund losses of the entity and is not a ~~linked transaction under SFAS~~securitization entity, an asset-backed financing entity, or an entity formerly considered a qualifying special-purpose entity ("QSPE"). The Company’s investment funds meet the conditions in ASU No. ~~140 unless certain criteria~~2010-10 and qualify for the deferral adoption. Therefore, the Company is not required to consolidate any of its investment funds which are ~~met, including that~~VIEs until further guidance is issued.

In January 2010, the ~~transferred asset must be readily obtainable~~FASB issued ASU No. 2010-06, “Fair Value Measurement”. ASU No. 2010-06 requires new disclosures regarding transfers of assets and liabilities measured at fair value in and out of Level 1 and 2 of the ~~marketplace. FSP~~fair value hierarchy. A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfer. ASU No. ~~140-3 is effective for fiscal years beginning after November 15, 2008,~~2010-06 also provides additional guidance on the level of disaggregation of fair value maeasurements and ~~will be applied to transactions entered into after the date of adoption. Early adoption is prohibited.~~disclosures regarding inputs and valuation techniques. The Company adopted ~~FSP No. 140-3~~this disclosure requirement in the ~~first quarter of 2009 which did not have an impact on its financial condition, results of operations or cash flows.~~three months ended March 31, 2010. See note 5 for further details.

In ~~December 2008,~~addition, ASU No.2010-06 requires the ~~FASB issued FSP No. FAS 140-4~~reconciliation of beginning and ~~FIN 46(R)-8,~~~~“Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests~~ending balances for fair value measurements using significant unobservable inputs (i.e., Level 3) to be presented on a gross basis. The Company will adopt this requirement in ~~Variable Interest Entities”. FSP No. FAS 140-4 and FIN 46(R)-8 requires enhanced disclosures about transfers of financial assets and interests in variable interest entities. The FSP is effective for interim and annual periods~~the reporting period ending after December 15, 2008. Since the FSP requires only additional disclosures concerning transfers of financial assets and interests in variable interest entities, adoption of the FSP did not affect the Company’s financial condition, results of operations or cash flows.March 31, 2011.

~~In March 2008, the FASB issued SFAS No. 161, “~~~~Disclosures about Derivative Instruments and Hedging Activities— an amendment of FASB Statement No. 133”~~ (“SFAS No. 161”). SFAS No. 161 requires enhanced disclosures about an entity’s derivative and hedging activities, and is effective for financial statements issued for fiscal years beginning after November 15, 2008, with early application encouraged. The Company has adopted SFAS No. 161. Since SFAS No. 161 requires only additional disclosures concerning derivatives and hedging activities, adoption of SFAS No. 161 did not affect the Company’s financial condition, results of operations or cash flows.

~~On October 10, 2008, the FASB issued FSP FAS 157–3, “~~~~Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active~~” (“FSP FAS 157–3”). FSP FAS 157–3 clarifies the application of SFAS 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial instrument when the market for that financial asset is not active. The FSP was effective upon issuance, including prior periods for which financial statements have not been issued. The adoption of FSP FAS 157–3 did not have a material impact on the Company’s financial condition, results of operations or cash flows.

~~On April 9, 2009, the FASB issued FSP FAS No. 157-4, “~~~~Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly~~~~” (“FSP FAS 157-4”). FSP FAS 157-4 provides additional guidance for estimating fair value in accordance with FASB Statement No. 157, “~~~~Fair Value Measurements~~”, when the volume and level of activity for the asset or liability have significantly decreased. This FSP also includes guidance on identifying circumstances that indicate a transaction is not orderly. FSP FAS 157-4 is effective for interim reporting periods ending after June 15, 2009. The adoption of FSP FAS 157-4 did not affect the Company’s financial condition, results of operations or cash flows.

~~On April 9, 2009, the FASB issued FASB Staff Position No. FAS 107-1 and APB 28-1, “~~~~Interim Disclosures about Fair Value of Financial Instruments~~~~”(“FSP FAS 107-1”) which amends FASB Statement No. 107, “~~~~Disclosures about Fair Value of Financial Instruments~~”, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, “~~Interim Financial Reporting~~,” to require those disclosures in summarized financial information at interim reporting periods. This FSP is effective for interim reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. Since FSP FAS 107-1 requires only additional disclosures about the fair value of financial instruments, the Company ’s adoption of FSP FAS 107-1 did not affect the Company’s financial condition, results of operations or cash flows.

~~In May 2009, the FASB issued SFAS No. 165,~~~~“Subsequent Events”~~ (“SFAS 165”). SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 is based on the same principles as those that currently exist in auditing standards with the addition of some new terminology. The standard is effective for interim and annual periods ending after June 15, 2009. Since SFAS 165 requires only additional disclosure, the Company’s adoption of SFAS 165 did not have an impact on its financial condition, results of operations or cash flows.

Earnings per share was computed by dividing net profit (loss) attributable to Oppenheimer Holdings Inc. by the weighted average number of shares of Class A non-voting common stock (“Class A ~~Shares”~~Stock”) and Class B voting common stock (“Class B ~~Shares”~~Stock”) outstanding. Diluted earnings per share includes the weighted average Class A and Class B ~~Shares~~Stock outstanding and the effects of warrants issued and Class A ~~Shares~~Stock granted under share-based compensation arrangements using the treasury stock method, if dilutive.

~~Amounts~~Dollar amounts are expressed in thousands, ~~of dollars,~~ except share ~~and per share~~ amounts

	Three months ended June 30,		Six months ended June 30,		Three months ended March 31,
	2009	2008	2009	2008	2010	2009
Basic weighted average number of shares outstanding	13,069,014	13,508,262	13,070,547	13,567,150	13,296,980	13,072,097
Net dilutive effect of warrants, treasury method (1)	-	-
Net dilutive effect of warrant, treasury method (1)					-
Net dilutive effect of share-based awards, treasury method (2)	214,486	140,941	365,162	-	559,002	-
Diluted weighted average number of shares outstanding	13,283,500	13,649,203	13,435,709	13,567,150	13,855,982	13,072,097

Net profit (loss) for the period	$7,130	$1,646	$5,116	$(14,468)	$9,364	$(2,014)
Net profit attributable to non-controlling interests					196	-
Net income attributable to Oppenheimer Holdings Inc.					$9,168	$(2,014)

Basic earnings (loss) per share	$0.55	$0.12	$0.39	$(1.07)	$0.69	$(0.15)
Diluted earnings (loss) per share	$0.54	$0.12	$0.38	$(1.07)	$0.66	$(0.15)

As part of the consideration for the 2008 acquisition of a portion of CIBC World Markets Corp.’s U.S. capital markets businesses, the Company issued a warrant to purchase 1 million shares of Class A ~~Shares~~Stock of the Company at $48.62 per share exercisable five years from the January 14, 2008 acquisition date. For the three ~~and six~~ months ended ~~June 30,~~March 31, 2010 and 2009, ~~and 2008,~~ the effect of the ~~warrants~~warrant is anti-dilutive.

For the three ~~and six~~ months ended ~~June 30,~~March 31, 2010 and 2009, respectively, the diluted earnings per share computations do not include the anti-dilutive effect of ~~542,976~~273,416 and ~~557,976~~810,464 shares of Class A ~~Shares~~Stock granted under share-based compensation ~~arrangements (357,884 and 1,373,572, respectively, for the three and six months ended June 30, 2008).~~arrangements.

During the second quarter of 2009, the Company sustained a one-time charge of approximately $2.0 million in the form of a departure tax payable to the government of Canada in connection with the move of the domicile of the corporation from Canada to the U.S. as well as approximately $1.3 million in professional fees related to this matter totaling $3.3 million on a pre-tax basis ($0.21 per share on an after tax basis), included in other expenses in the condensed consolidated statement of operations. This Canadian departure tax is not deductible for tax purposes which, as a result, negatively impacted the effective tax rate for the three and six month periods ended June 30, 2009.

	June 30, 2009	December 31, 2008	March 31, 2010	December 31, 2009
Receivable from brokers and clearing organizations consist of:
Deposits paid for securities borrowed	$277,909	$192,980	$231,564	$299,925
Receivable from brokers	39,292	27,517	5,217	23,019
Securities failed to deliver	27,551	17,965	48,267	20,532
Clearing organizations	20,197	14,318	20,556	17,291
Omnibus accounts	14,249	8,233	27,277	9,192
Other	13,219	17,222	19,385	20,953
	$392,417	$278,235	$352,266	$390,912

Securities owned and 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. The Company's other financial instruments are generally short-term in nature or have variable interest rates and as such their carrying values approximate fair value, with the exception of notes receivable from employees which are carried at cost.

	June 30, 2009		December 31, 2008		March 31, 2010		December 31, 2009
	Owned	Sold	Owned	Sold	Owned	Sold	Owned	Sold

U.S. Government, agency and sovereign obligations	$29,781	$15,998	$20,751	$1,212
U.S. Treasury, agency and sovereign obligations					$245,888	$223,678	$84,168	$74,152
Corporate debt and other obligations	32,379	10,486	23,667	6,370	30,918	12,435	30,330	7,323
Mortgage and other asset-backed securities	8,025	235	7,535	4	3,074	10	4,035	5
Municipal obligations	54,222	1,453	15,051	1,024	36,908	1,345	34,606	1,707
Convertible bonds	19,679	9,070	19,730	3,806	37,704	6,902	35,001	12,121
Corporate equities	32,631	22,069	33,959	14,595	35,117	34,289	43,728	36,286
Other	6,958	337	6,786	443	6,096	158	6,504	145
Total	$183,675	$59,648	$127,479	$27,454	$395,705	$278,817	$238,372	$131,739

Securities owned and securities sold, but not yet purchased, consist of trading and investment securities at fair values. Included in securities owned at ~~June 30, 2009~~March 31, 2010 are corporate equities with estimated fair values of approximately ~~$11.4~~$13.5 million ($~~10.7~~13.1 million at December 31, ~~2008)~~2009), which are related to deferred compensation liabilities to certain employees included in accrued compensation on the condensed consolidated balance sheet.

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~~Treasury securities are valued using quoted market prices obtained from active market makers and inter-dealer brokers and, accordingly, are categorized in Level 1 ofin the fair value hierarchy.

U.S. agency securities ~~primarily~~ consist of agency issued debt securities and mortgage pass-through securities. Non-callable agency issued debt securities are generally valued using quoted market prices. Callable agency issued ~~by federal agencies and~~debt securities are valued ~~based on quoted market prices when available or~~ 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 ~~and~~are model driven with respect to spreads of the comparable To-be-announced (“TBA”) security. Actively traded non-callable agency issued debt securities are categorized in Level 1 orof the fair value hierarchy. Callable agency issued debt securities and mortgage pass-through securities are generally categorized in Level 2 of the fair value hierarchy.

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. Sovereign obligations are categorized in Level 1 or 2 of the fair value hierarchy.

The fair value of corporate bonds is estimated using recent transactions, broker quotations and bond spread information. Corporate bonds are generally categorized in Level 2 of the fair value hierarchy.

The Company holds non-agency securities primarily collateralized by home equity and manufactured housing which are valued based on external pricing and spread data provided by independent pricing services and are generally categorized in Level 2 of the fair value hierarchy. When ~~position~~ specific external pricing is not observable, the valuation is based on yields and spreads for comparable bonds and, consequently, the positions are categorized in Level 3 of the fair value hierarchy.

The fair value of municipal obligations is estimated using recently executed transactions, broker quotations, and bond spread information. These obligations are generally categorized in Level 2 of the fair value hierarchy; in instances where significant inputs are unobservable, they are categorized in Level 3 of the hierarchy.

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. Convertible bonds are generally categorized in Level 2 of the fair value hierarchy; in instances where significant inputs are unobservable, they are categorized in Level 3 of the hierarchy.

Exchange-traded equity securities and options are generally valued based on quoted prices from the exchange and categorized as Level 1 in the fair value hierarchy.

The Company holds Auction Rate Preferred Securities (“ARPS”) issued by closed-end funds with interest rates that reset through periodic auctions. Due to the auction mechanism and generally liquid markets, ARPS have historically been categorized as Level 1 in the fair value hierarchy. Beginning in February 2008, uncertainties in the credit markets resulted in substantially all of the auction rate securities market experiencing failed auctions. Once the auctions failed, the ARPS could no longer be valued using observable prices set in the auctions. As a result, the Company has ~~resorted to~~used less

observable determinants of the fair value of ARPS, including the strength in the underlying credits, announced issuer redemptions, completed issuer redemptions, and announcements from issuers regarding their intentions with respect to their outstanding auction rate securities. The failure ~~o f~~of auctions has resulted in a Level 3 categorization of ARPS in the fair value hierarchy.

In its role as general partner in certain hedge funds and private equity funds, the Company 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. Due to the illiquid nature of these investments and difficulties in obtaining observable inputs, these investments are included in Level 3 of the fair value hierarchy.

The following table provides information about the Company’s investments in Company-sponsored funds at March 31, 2010.

From time to time, the Company transacts in exchange-traded and over-the-counter derivative transactions to manage its interest rate risk. Exchange-traded derivatives, namely U.S. Treasury futures, Federal funds futures, and Eurodollar futures, are valued based on quoted prices from the exchange and are categorized asin Level 1 of the fair value hierarchy. Over-the-counter derivatives, namely interest rate swap and interest rate cap contracts, are valued using a discounted cash flow model and the Black-Scholes model, respectively, using observable interest rate inputs and are categorized in Level 2 of the fair value hierarchy.

As described below in “Credit Concentrations”, the Company participates in loan syndications and operates as underwriting agent in leveraged financing transactions where it utilizes a warehouse facility provided by Canadian Imperial Bank of Commerce (“CIBC”) to extend financing commitments to third-party borrowers identified by the Company. The Company uses broker quotations on loans trading in the secondary market as a proxy to determine the fair value of the underlying loan commitment which is categorized in Level 3 of the fair value hierarchy. The

Company also purchases and sells loans in its proprietary trading book where CIBC provides the financing through a loan trading facility. The Company uses broker quotations to determine the fair value of loan positions held which are categorized in Level 2 of the fair value hierarchy.

The Company from time to time enters into securities financing transactions that mature on the same date as the underlying collateral. Such transactions are treated as a sale of financial assets and a forward repurchase commitment, or conversely as a purchase of financial assets and a forward resale commitment. The forward repurchase and resale commitments are valued based on the spread between the market value of the government security and the underlying collateral and are categorized in Level 2 of the fair value hierarchy.

The Company’s assets and liabilities, recorded at fair value on a recurring basis as of ~~June 30, 2009~~March 31, 2010 and December 31, ~~2008,~~2009, 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 ~~June 30, 2009.~~March 31, 2010:

	Fair Value Measurements
	As of June 30, 2009				Fair Value Measurements
	Level 1	Level 2	Level 3	Total	As of March 31, 2010
					Level 1	Level 2	Level 3	Total
Assets:
Cash equivalents	$4,992	$-		$4,992	$21,897	$ -		$21,897
Securities segregated for regulatory and other purposes	23,158	-		23,158	11,497	-		11,497
Deposits with clearing organizations	7,994	-		7,994	7,993	-		7,993
Securities owned:
U.S. Government, agency and sovereign
obligations	21,902	7,879	-	29,781
U.S. Treasury obligations					199,927	-		199,927
U.S. Agency obligations					43,218	2,743	-	45,961
Corporate debt and other obligations	-	32,379	-	32,379	-	30,918	-	30,918
Mortgage and other asset-backed securities	-	5,906	2,119	8,025	-	2,694	380	3,074
Municipal obligations	-	54,222	-	54,222	-	35,933	975	36,908
Convertible bonds	-	19,679	-	19,679	-	37,704	-	37,704
Corporate equities	29,487	3,144	-	32,631	28,779	6,338	-	35,117
Other	1,633	-	5,325	6,958	1,646	-	4,450	6,096
Securities owned, at fair value	53,022	123,209	7,444	183,675	273,570	116,330	5,805	395,705
Investments (1)	260	25,816	13,782	39,858	1,216	32,197	16,890	50,303
Derivative contracts (2)	-	3,291	-	3,291	-	6,702	-	6,702
Total	$89,426	$152,316	$21,226	$262,968	$316,173	$155,229	$22,695	$494,097

Assets and liabilities measured at fair value on a recurring basis as of December 31, ~~2008.~~2009:

					Fair Value Measurements
	Fair Value Measurement				As of December 31, 2009
	As of December 31, 2008				Level 1	Level 2	Level 3	Total
	Level 1	Level 2	Level 3	Total
Assets:
Cash equivalents	$ 8,627	$ -		$ 8,627	$13,365	$ -	$ -	$13,365
Securities segregated for regulatory and other purposes	11,499	-		11,499
Securities segregated for regulatory and
other purposes					11,499	-		11,499
Deposits with clearing organizations	8,295	-		8,295	7,995	-		7,995
Securities owned:
U.S. Government, agency and
sovereign obligations	17,738	3,013	-	20,751
U.S. Treasury obligations					53,633	-		53,633
U.S. Agency obligations					15,928	14,604	-	30,532
Sovereign obligations					3	-		3
Corporate debt and other obligations	-	23,667	-	23,667	-	30,330	-	30,330
Mortgage and other asset-backed
securities	-	5,925	1,610	7,535
Mortgage and other asset-backed securities					-	3,718	317	4,035
Municipal obligations	-	15,051	-	15,051	-	33,531	1,075	34,606
Convertible bonds	-	18,915	815	19,730	-	35,001	-	35,001
Corporate equities	33,959	-		33,959	35,178	8,550	-	43,728
Other	1,461	-	5,325	6,786	2,054	-	4,450	6,504
Securities owned, at fair value	53,158	66,571	7,750	127,479	106,796	125,734	5,842	238,372
Investments (1)	597	19,121	12,085	31,803	11,374	28,972	15,981	56,327
Derivative contracts (2)	-	71	-	71	-	5,854	-	5,854
Total	$ 82,176	$ 85,763	$ 19,835	$ 187,774	$151,029	$160,560	$21,823	$333,412

Liabilities:
Securities sold, but not yet purchased:
U.S. Government, agency and
sovereign obligations	$ 1,212	$ -		$ 1,212
U.S. Treasury obligations					$73,909	$ -	$ -	$73,909
U.S. Agency obligations					-	90	-	90
Sovereign obligations					153	-		153
Corporate debt and other obligations	-	6,370	-	6,370	-	7,323	-	7,323
Mortgage and other asset-backed
securities	-	4	-	4
Mortgage and other asset-backed securities					-	5	-	5
Municipal obligations	-	1,024	-	1,024	-	1,707	-	1,707
Convertible bonds	-	3,806	-	3,806	-	12,121	-	12,121
Corporate equities	14,595	-		14,595	22,112	14,174	-	36,286
Other	68	-	375	443	145	-		145
Securities sold, but not yet purchased, at fair value	15,875	11,204	375	27,454
Derivative contracts (3)	341	2,373	2,516	5,230
Securities sold, but not yet purchased, at
fair value					96,319	35,420	-	131,739
Investments (3)					57	-		57
Derivative contracts (4)					178	972	-	1,150
Total	$ 16,216	$ 13,577	$ 2,891	$ 32,684	$96,554	$36,392	$ -	$132,946

There were no significant transfers between Level 1 and Level 2 assets and liabilities for the three months ended March 31, 2010.

The following tables present changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the three ~~and six~~ months ending ~~June 30, 2009~~March 31, 2010 and ~~2008.~~2009.

	Level 3 Assets and Liabilities						Level 3 Assets and Liabilities
	For the three months ended June 30, 2009						Opening Balance	Realized Gains (Losses)(5)	Unrealized Gains (Losses)(5) (6)	Purchases, Sales, Issuances, Settlements	Transfers In / Out	Ending Balance
	Opening Balance	Realized Gains (Losses)(5)	Unrealized Gains (Losses)(5)	Purchases, Sales, Issuances, Settlements	Transfers In / Out	Ending Balance
For the three months ended March 31, 2010							For the three months ended March 31, 2010
Assets:
Mortgage and other asset-backed securities (1)	$2,497	67	-	(445)	-	$2,119	$317	1	(1)	64	(1)	$380
Other(2)	5,325	-	-	-	-	5,325
Municipal obligations							1,075	-	(162)	-	62	975
Other (2)							4,450	-	-	-	-	4,450
Investments (3)	12,031	-	1,500	251	-	13,782	15,981	-	634	55	220	16,890

Liabilities:
Mortgage and other asset-backed securities (1)	$-	-	(5)	(205)	-	$(210)
Other (2)	(375)	-	-	50	-	(325)
Derivative contracts (4)	(45)	-	-	45	-	-
none

The Company ~~adopted the provisions of SFAS 159 effective January 1, 2008. SFAS 159 provides entities~~has the option to measure certain financial assets and financial liabilities at fair value with changes in fair value recognized in earnings each period. ~~SFAS 159 permits the~~The Company may make a fair value option election on an instrument-by-instrument basis at initial recognition of an asset or liability or upon an event that gives rise to a new basis of accounting for that instrument. The Company has elected to apply the fair value option to its loan trading portfolio which resides in ~~the newly formed entity,~~ OPY Credit Corp. and is included in other assets on the condensed consolidated balance sheet. Management has elected this treatment as it is consistent with the manner in which the business is managed as well as the way that financial instruments in other parts of the business are recorded. There was one loan position held in the secondary loan trading portfolio at ~~June 30, 2009 wi th~~March 31, 2010 with a par value of $950,000 ~~(nil in 2008)~~($950,00 0 at December 31, 2009) and a fair value of ~~$888,000~~$937,000 ($940,000 at December 31, 2009) which is categorized in Level 2 of the fair value hierarchy.

The Company also elected the fair value option for those 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 or that are not accounted for as purchase and sale agreements (such as repo-to-maturity transactions). The Company has elected the fair value option for these instruments to more accurately reflect market and economic events in its earnings and to mitigate a potential imbalance in earnings caused by using different measurement attributes (i.e. fair value versus carrying value) for certain assets and liabilities. At March 31, 2010, the fair value of the reverse repurchase agreements and repurchase agreements were $350.2 million and nil, respectively. During the three months ended March ;31, 2010, the amount of losses related to reverse repurchase agreements was $4,600.

~~The Company adopted the provisions of SFAS 161 effective January 1, 2009. SFAS 161 requires enhanced disclosures about an entity’s derivative 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. Interest rate

swaps and interest rate caps are entered into to manage the Company’s interest rate risk associated with floating-rate borrowings. ~~Statement of Financial Accounting Standards No. 133, “~~~~Accounting for Derivative Instruments~~All derivative instruments are measured at fair value and ~~Hedging Activities”~~ ~~(“SFAS 133”), requires companies to recognize all derivative instruments~~are recognized as either assets or liabilities ~~at fair value in~~on the balance sheet. ~~In accordance with SFAS 133, the~~The Company designates interest rate swaps and interest rate caps as cash flow hedges of floating-rate borrowings.

For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains or losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

On September 29, 2006, the Company entered into interest rate swap transactions to hedge the interest payments associated with its floating rate Senior Secured Credit Note, which is subject to change due to changes in 3-Month LIBOR. See Note 6 for further information. These swaps have been designated as cash flow ~~hedges under SFAS 133.~~hedges. Changes in the fair value of the swap hedges are expected to be highly effective in offsetting changes in the interest payments due to changes in 3-Month LIBOR. For the three ~~and six~~ months ended ~~June 30, 2009,~~March 31, 2010, the effective portion of the net gain on the interest rate swaps, net of tax, was approximately ~~$170,000 and $420,000, respectively,~~$257,000 and has been recorded as other comprehensive income on the condensed consolidated statement of comprehensive income (loss). There was no ineffective portion as at ~~June 30, 2009.~~March 31, 2010. The interest rate swaps had a weighted-average fixed interest rate of 5.45% and a weighted-average ~~maturity~~ma turity of 1 year at ~~June 30, 2009.~~March 31, 2010.

On January 20, 2009, the Company entered into an interest rate cap contract, incorporating a series of purchased caplets with fixed maturity dates ending December 31, 2012, to hedge the interest payments associated with its floating rate Subordinated Note, which is subject to changes in 3-Month LIBOR. See Note 6 for further information. This cap has been designated as a cash flow ~~hedge under SFAS 133.~~hedge. Changes in the fair value of the interest rate cap are expected to be highly effective in offsetting changes in the interest payments due to changes in 3-Month LIBOR. For the three ~~and six~~ months ended ~~June 30, 2009,~~March 31, 2010, the effective portion of the net ~~gain~~loss on the interest rate cap, net of tax, was approximately ~~$932,000 and $551,000, respectively,~~$624,000 and has been recorded as other comprehensive income (loss) on the condensed consolidated statement of comprehensive income (loss). There was no ~~ineffectiv e~~ineffective portion as at ~~June 30, 2009.~~March 31, 2010. The Company paid a premium for the interest rate cap of $2.4 million which has a strike of 2% and matures December 31, 2012.

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 Shekels.

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. At ~~June 30, 2009,~~March 31, 2010, the Company had no140 open ~~contracts.~~

short contracts for 10-year U.S. Treasury notes with a fair value of $79,000 used primarily as an economic hedge of interest rate risk associated with a portfolio of fixed income investments.

The Company has some limited trading activities in pass-through mortgage-backed securities eligible to be sold in the ~~"to-be-announced"~~"To-be-announced" or TBA market. 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. Unrealized gains and losses on TBAs are recorded in the condensed consolidated balance ~~sheets~~sheet in receivable from brokers and clearing organizations and payable to brokers and clearing organizations, respectively, and in the condensed consolidated statement of operations as principal transactions revenue. See the Fair Value of Derivative Instruments tables below for TBA’s outstanding at ~~June 30, 2009.~~March 31, 2010.

The notional amounts and fair values of the Company’s derivatives at ~~June 30,~~March 31, 2010 by product were as follows:

(1) See “Credit Concentrations” below for description of derivative financial instruments.

(2) Forward commitment to repurchase government securities that received sale treatment related to “Repo-to-Maturity” transactions.

(3) Included in receivable from brokers and clearing organizations on the consolidated balance sheet.

(4) Included in payable to brokers and clearing organizations on the consolidated balance sheet.

The notional amounts and fair values of the Company’s derivatives at December 31, 2009 by product were as follows:

(1) See “Credit Concentrations” below for description of derivative financial instruments.

(2) Forward commitment to repurchase government securities that received sale treatment related to “Repo-to-Maturity” transactions.

(3) Included in receivable from brokers and clearing organizations on the consolidated balance sheet.

(4) Included in payable to brokers and clearing organizations on the consolidated balance sheet.

The following table presents the location and fair value amounts of the Company’s derivative instruments and their effect on the statement of operations for the three months ended ~~June 30, 2009.~~March 31, 2010.

(1) See “Credit Concentrations” ~~section~~ below for description of derivative financial instruments.

(2) There is no ineffective portion included in income for the three ~~and six~~ months ended ~~June 30, 2009.~~March 31, 2010.

~~The following table presents~~(3) As noted above in “Cash flow hedges used for asset and liability management”, interest rate swaps are used to hedge interest rate risk associated with the ~~location and~~Senior Secured Credit Note. As a result, changes in fair value ~~amounts~~ of the ~~Company’s derivative instruments and their effect~~interest rate swaps are offset by interest rate changes on the ~~statement of operations for the six months ended June 30, 2009.~~

~~(1) See “Credit Concentrations” section below for description of derivative financial instruments.~~

~~(2)~~outstanding Senior Secured Credit Note balance. There iswas no ineffective portion ~~included in income for the three and six months ended June 30, 2009.~~as at March 31, 2010.

(4) Forward commitment to repurchase government securities that received sale treatment related to “Repo-to-Maturity” transactions.

The Company enters into collateralized borrowing and lending transactions in order to meet customers’ needs and earn residual interest rate spreads, obtain securities for settlement and finance trading inventory positions. Under these transactions, the Company either receives or provides collateral, including U.S. government and agency, asset-backed, corporate debt, equity, and non-U.S. government and agency securities.

The Company obtains short-term borrowings primarily through bank call loans. Bank call loans are generally payable on demand and bear interest at various rates but not exceeding the broker call rate. At March 31, 2010, bank call loans were $37.6 million ($nil at December 31, 2009). These loans, collateralized by firm securities with market values of approximately $61.7 million at March 31, 2010, are primarily with two U.S. money center banks. At March 31, 2010, the Company had approximately $1.2 billion of customer securities under customer margin loans that are available to be pledged, of which the Company has repledged approximately $297.8 million under securities loan agreements.

At March 31, 2010, the Company had available collateralized and uncollateralized letters of credit of $237.7 million. Collateral for these letters of credit include customer securities with a market value of approximately $247.5 million pledged to two financial institutions.

In June 2009, the Company significantly expanded its government trading operations and began financing those operations through the use of securities sold under agreements to repurchase (“repurchase agreements”) and securities purchased under agreements to resell (“reverse repurchase agreements”). Except as described below, repurchase and reverse repurchase agreements, principally involving government and agency securities, are carried at amounts at which securities subsequently will be resold or reacquired as specified in the respective agreements and include accrued interest (repo-to-maturity transactions). Repurchase and reverse repurchase agreements are presented on a net-by-counterparty basis, when the repurchase and reverse repurchase agreements are executed with the same counterparty, have the same explicit settlement date, are executed in accordance with a master netting arrangement, the securities underlying the repurchase and reverse repurchase agreements exist in “book entry” form and certain other requirements are met.

Certain of the Company’s repurchase agreements and reverse repurchase agreements are carried at fair value as a result of the Company’s fair value option election. The Company elected the fair value option for those repurchase agreements and reverse repurchase agreements that do not settle overnight or have an open settlement date or that are not accounted for as purchase and sale agreements (such as repo-to-maturity transactions described above). The Company has elected the fair value option for these instruments to more accurately reflect market and economic events in its earnings and to mitigate a potential imbalance in earnings caused by using different measurement attributes (i.e. fair value versus carrying value) for certain assets and liabilities. At March 31, 2010,

the fair value of the reverse repurchase agreements was $350.2 million. Changes in the fair value of these transactions are recorded in principal transactions in the consolidated statement of income. During the three months ended March 31, 2010, the amount of losses related to reverse repurchase agreements was $4,600. At March 31, 2010, the gross balances of reverse repurchase agreements and repurchase agreements were $2.8 billion and $4.0 billion, respectively. The average daily balance of reverse repurchase agreements and repurchase agreements on a gross basis for the three months ended March 31, 2010 was $2.7 billion and $4.0 billion, respectively.

The Company receives collateral in connection with securities borrowed and reverse repurchase agreement transactions and customer margin loans. Under many agreements, the Company is permitted to sell or repledge the securities received (e.g., use the securities to enter into securities lending transactions, or deliver to counterparties to cover short positions). At ~~June 30, 2009,~~March 31, 2010, the fair value of securities received as collateral under securities borrowed transactions and reverse

repurchase agreements was ~~$266.5~~$223.2 million and ~~$161.7 million,~~$2.4 billion, respectively, of which the Company has re-pledged approximately ~~$128.5~~$34.0 million under securities loaned transactions and ~~$149.7 million~~$2.4 billion under repurchase agreements.

The Company pledges certain of its securities owned for securities lending and repurchase agreements and to collateralize bank call loan transactions. The carrying value of pledged securities owned that can be sold or re-pledged by the counterparty was ~~$3.6~~$1.5 million as at ~~June 30, 2009~~March 31, 2010 ($~~1.9 million~~623,000 at December 31, ~~2008)~~2009). The carrying value of securities owned by the Company that have been loaned or pledged to counterparties where those counterparties do not have the right to sell or re-pledge the collateral was ~~$76.3~~$70.1 million as at ~~June 30, 2009.~~March 31, 2010 ($63.8 million at December 31, 2009).

The Company manages credit exposure arising from repurchase and reverse repurchase agreements by, in appropriate circumstances, entering into master netting agreements and collateral arrangements with counterparties that provide the Company, in the event of a customer default, the right to liquidate and the right to offset a counterparty’s rights and obligations. The Company also monitors the market value of collateral held and the market value of securities receivable from others. It is the Company's policy to request and obtain additional collateral when exposure to loss exists. In the event the counterparty is unable to meet its contractual obligation to return the securities, the Company may be exposed to off-balance sheet risk of acquiring securities at prevailing market prices.

One of the Company's funds in which ita subsidiary of the Company acts as a general partner and also owns a limited partnership interest ~~utilize d~~utilized Lehman Brothers International (Europe) as a prime broker. As of ~~June 30, 2009,~~March 31, 2010, Lehman Brothers International (Europe) held securities with a fair value of ~~$6.1~~$9.1 million that were segregated and not re-hypothecated.

~~At June 30, 2009, the Company had available collateralized and uncollateralized letters of credit of $147.2 million.~~

Credit concentrations may arise from trading, investing, underwriting and financing activities and may be impacted by changes in economic, industry or political factors. In the normal course of business, the Company may be exposed to risk in the event customers, counterparties including other brokers and dealers, issuers, banks, depositories or clearing organizations are unable to fulfill their contractual obligations. The Company seeks to mitigate these risks by actively monitoring exposures and obtaining collateral as deemed appropriate. Included in receivable from brokers and clearing organizations as of ~~June 30, 2009~~March 31, 2010 are receivables from ~~three~~five major U.S. broker-dealers totaling approximately ~~$153.3~~$152.6 million.

The Company participates in ~~Loan Syndications~~loan syndications through its Debt Capital Markets business. Through OPY Credit Corp., the Company operates as underwriting agent in leveraged financing transactions where it utilizes a warehouse facility provided by CIBC to extend financing commitments to third-party borrowers identified by the Company. The Company has exposure, up to a maximum of 10%, of the excess underwriting commitment provided by CIBC over CIBC’s targeted loan retention (defined as “Excess Retention”). The Company quantifies its Excess Retention exposure by assigning a fair value to the underlying loan commitment provided by CIBC (in excess of what CIBC has agreed to retain) which is based on the fair value of the loans trading in the secondary market. To the extent that the fair value of the loans has decreased, the Company records an unrealized loss on the Excess Retention. Underwri ting of loans pursuant to the warehouse facility is subject to joint credit approval by the Company and CIBC. The maximum aggregate principal amount of the warehouse facility is $1.5 billion, of which the Company utilized ~~$74.4~~$84.6 million and had nil in Excess Retention as of ~~June 30, 2009.~~

The Company is obligated to settle transactions with brokers and other financial institutions even if its clients fail to meet their obligations to the Company. Clients are required to complete their transactions on settlement date, generally one to three business days after trade date. If clients do not fulfill their contractual obligations, the Company may incur losses. The Company has clearing/participating arrangements with the National ~~Association of~~ Securities ~~Dealers~~Clearing Corporation (“NSCC”), the Fixed Income Clearing Corporation (“FICC”), R.J. O’Brien & Associates (commodities transactions) and others. With respect to its business in securities purchased under agreement to resell and securities sold under agreement to repurchase, all open contracts at March 31, 2010 are with the FICC. The clearing brokers have the right to charge the Company for losses that result from a client's failure to fulfill its contractual obligations. Accordingly, the Company has credit exposures with these clearing brokers. The clearing brokers can re-hypothecate the securities held on ~~beha lf~~behalf of the Company. As the right to charge the Company has no maximum amount and applies to all trades executed through the clearing brokers, the Company believes there is no maximum amount assignable to this right. At ~~June 30, 2009,~~March 31, 2010, the Company had recorded no liabilities with regard to this right. The Company's policy is to monitor the credit standing of the clearing brokers and banks with which it conducts business.

Through OPY Credit Corp., the Company also participates, with other members of loan syndications, in providing financing commitments under revolving credit facilities in leveraged financing transactions. As of March 31, 2010, the Company had $6.2 million committed under such financing arrangements, none of which has been drawn upon.

~~FASB Interpretation No. 46, as revised (“FIN 46R”), “~~~~Consolidation of Variable Interest Entities”~~~~, applies to certain~~VIEs are entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The primary beneficiary of a VIE is the party that absorbs a majority of the entity’s expected losses, receives a majority of its expected residual returns, or both, as a result of holding variable interests. The enterprise that is considered the primary beneficiary of a VIE consolidates the VIE.

~~The~~A subsidiary of the Company serves as general partner of hedge funds and private equity funds that were established for the purpose of providing investment alternatives to both its institutional and qualified retail clients. The Company holds variable interests in these funds as a result of its rights to

receive management and incentive fees. The Company’s investment in and additional capital commitments to these hedge funds and private equity funds are also considered variable interests. The Company's additional capital commitments are ~~limited in amount and~~ subject to call at a later ~~date.~~date and are limited in amount.

The Company assesses whether it is the primary beneficiary of the hedge funds and private equity funds in which it holds a variable interest in the context of the total general ~~($1.6 million)~~ and limited partner ~~($130.6 million)~~ interests held in these funds by all parties. In each instance the Company has determined that it is not the primary beneficiary and therefore need not consolidate the hedge funds or private equity ~~fund.~~funds. The ~~Company’s~~subsidiaries’ general partnership interests, ~~($1.6 million at June 30, 2009)~~additional capital commitments, and management fees receivable represent its maximum exposure to ~~loss~~loss. The subsidiaries’ general partnership interests and management fees receivable are included in other assets on the condensed consolidated balance sheet. ~~In addition,~~

The following tables set forth the total VIE assets, carrying value of the subsidiaries’ variable interests, and the Company’s maximum exposure to loss in Company-sponsored non-consolidated VIEs in which the Company ~~has additional capital commitments to these funds of $1.3 million~~holds variable interests and other non-consolidated VIEs in which the Company holds variable interests as at ~~June 30, 2009 (for further information see note 13 “Commitments~~March 31, 2010 and ~~Contingencies” in the Company’s Annual Report on Form 10-K for the year ended~~ December 31, ~~2008).~~2009:

Issued	Maturity Date	Interest Rate at June 30, 2009	June 30, 2009	December 31, 2008	Maturity Date	Interest Rate at March 31, 2010	March 31, 2010	December 31, 2009

Senior Secured Credit Note (a)	7/31/2013	5.72%	$37,303	$47,663	7/31/2013	4.76%	$32,003	$32,503

Subordinated Note (b)	1/31/2014	6.46%	$100,000	$100,000	1/31/2014	5.5%	$100,000	$100,000

(a)In 2006, the Company issued a Senior Secured Credit Note in the amount of $125.0 million at a variable interest rate based on LIBOR with a seven-year term to a syndicate led by Morgan Stanley Senior Funding Inc., as agent. In accordance withtheSenior Secured Credit Note, the Company has provided certain covenants to the lenders with respect to the maintenance of a minimum fixed charge ratio and maximum leverage ratio and minimum net capital requirements with respect to Oppenheimer.

On December 22, 2008, certain terms of the Senior Secured Credit Note were amended, including (1) revised financial covenant levels that require that (i) the Company maintain a maximum leverage ratio (total long-term debt divided by EBITDA) of ~~4.45~~3.05 at ~~June 30, 2009~~March 31, 2010 and (ii) the Company maintain a minimum fixed charge ratio (EBITDA adjusted for capital expenditures and income taxes divided by the sum of principal and interest payments on long-term debt) of ~~1.70~~1.45 at ~~June 30, 2009;~~March 31, 2010; (2) an increase in scheduled principal payments as follows: 2009 - $400,000 per quarter plus $4.0 million on September 30, 2009 ~~and 2010~~ - $500,000 per quarter plus $8.0 million on September 30, 2010; (3) an increase in the interest rate to LIBOR plus 450 basis points (an increase of 150 basis points); and (4) a pay-down of principal equal to the cost of any share repurchases made pursuant to the ~~Normal Course~~ Issuer Bid. In the Company’s view, the ~~maximum~~max imum leverage ratio and minimum fixed charge ratio represent the most restrictive covenants. These ratios adjust each quarter in accordance with the loan terms, and become more restrictive over time. At ~~June 30, 2009,~~March 31, 2010, the Company was in compliance with all of its covenants.

The effective interest rate on the Senior Secured Credit Note for the three months ended ~~June 30, 2009~~March 31, 2010 was ~~5.72%~~4.76%. Interest expense, as well as interest paid on a cash basis for the three ~~and six~~ months ended ~~June 30, 2009~~March 31, 2010, on the Senior Secured Credit Note was ~~$545,200 and $1.3 million, respectively~~$387,000 ($~~1.3 million and $3.0 million, respectively for the three and six months ended June 30, 2008). On June 30, 2009, the Company made a scheduled repayment of principal~~710,200 in ~~the amount of $400,000 bringing the outstanding balance to $37.3 million.~~2009). Of the ~~$37.3~~$32.0 million principal amount outstanding at ~~June 30, 2009, $5.8~~March 31, 2010, $9.6 million of principal is expected to be paid within 12 months.

The obligations under the Senior Secured Credit Note are guaranteed by certain of the Company’s subsidiaries, other than broker-dealer subsidiaries, with certain exceptions, and are collateralized by a lien on substantially all of the assets of each guarantor, including a pledge of the ownership interests in each first-tier broker-dealer subsidiary held by a guarantor, with certain exceptions.

(b) On January 14, 2008, in connection with the acquisition of ~~certain capital markets businesses from CIBC (the “New~~the New Capital Markets ~~Business”),~~Business, CIBC made a loan in the amount of $100.0 million and the Company issued a Subordinated Note to CIBC in the amount of $100.0 million at a variable interest rate based on LIBOR. The Subordinated Note is due and payable on

January 31, 2014 with interest payable on a quarterly basis. The purpose of this note is to support the capital requirements of the New Capital Markets Business. In accordance withtheSubordinated Note, the Company has provided certain covenants to CIBC with respect to the maintenance of a minimum fixed charge ratio and maximum leverage ratio and minimum net capital requirements with respect to Oppenheimer.

Effective December 23, 2008, certain terms of the Subordinated Note were amended, including (1) revised financial covenant levels that require that (i) the Company maintain a maximum leverage ratio of ~~5.25~~3.70 at ~~June 30, 2009~~March 31, 2010 and (ii) the Company maintain a minimum fixed charge ratio of ~~1.40~~1.20 at ~~June 30, 2009;~~March 31, 2010; and (2) an increase in the interest rate to LIBOR plus 525 basis points (an increase of 150 basis points). In the Company’s view, the maximum leverage ratio and minimum fixed charge ratio represent the most restrictive covenants. These ratios adjust each quarter in accordance with the loan terms, and become more restrictive over time. At ~~June 30, 2009,~~March 31, 2010, the Company was in compliance with all of its covenants.

The effective interest rate on the Subordinated Note for the three months ended ~~June 30, 2009~~March 31, 2010 was ~~6.46%~~5.5%. Interest expense, as well as interest paid on a cash basis for the three ~~and six~~ months ended ~~June 30, 2009,~~March 31, 2010, on the Subordinated Note was ~~$1.6~~$1.4 million ~~and $3.3~~($1.7 million ~~respectively ($1.6 million and $3.2 million, respectively, for the three and six months ended June 30, 2008)~~in 2009).

The following table reflects changes in the number of shares of Class A ~~Shares~~Stock outstanding for the periods indicated:

Three months ended

June 30,

Six months ended

June 30,

Three months ended

March 31,

2009

2008

2009

2008

2010

2009

Class A Shares outstanding, beginning of period

12,968,992

13,513,608

12,899,465

13,266,596

Class A Stock outstanding, beginning of period

13,118,001

12,899,465

Issued pursuant to the share-based compensation plans

2,075

35,782

121,602

282,794

123,551

119,527

Repurchased and cancelled pursuant to the issuer bid

(308,976)

(50,000)

(308,976)

(50,000)

Class A Shares outstanding, end of period

12,971,067

13,240,414

12,971,067

13,240,414

Class A Stock outstanding, end of period

13,241,552

12,968,992

The Company's U.S. broker dealer subsidiaries, Oppenheimer and Freedom, are subject to the uniform net capital requirements of the SEC under Rule 15c3-1 (the “Rule”). Oppenheimer computes its net capital requirements under the alternative method provided for in the Rule which requires that Oppenheimer maintain net capital equal to two percent of aggregate customer-related debit items, as defined in SEC Rule 15c3-3. At ~~June 30, 2009,~~March 31, 2010, the net capital of Oppenheimer as calculated under the Rule was ~~$178.9~~$171.9 million or ~~19.2%~~15.1% of Oppenheimer's aggregate debit items. This was ~~$160.3~~$149.2 million in excess of the minimum required net capital at that date. Freedom computes its net capital requirement under the basic method provided for in the Rule, which requires that Freedom maintain net capital equal to the greater of $250,000 or 6 2/3% of aggregate indebtedness, as defined. At ~~June 30, 2009,~~March 31, 2010, Freedom had net ~~capital~~capi tal of ~~$4.6~~$4.9 million, which was ~~$4.3~~$4.6 million in excess of the $250,000 required to be maintained at that date.

At ~~June 30, 2009,~~March 31, 2010, the regulatory capital of Oppenheimer ~~EU Limited~~E.U. Ltd. was ~~$1.7~~$3.0 million which was ~~$134,000~~$1.2 million in excess of the ~~$1.6~~$1.8 million required to be maintained at that date. Oppenheimer ~~EU Limited~~E.U. Ltd. computes its regulatory capital pursuant to the Fixed Overhead Method prescribed by the Financial Services Authority of the United Kingdom.

The Company does not make loans to its officers and directors except under normal commercial terms pursuant to client margin account agreements. These loans are fully collateralized by ~~such~~ employee-owned securities.

~~Certain prior period amounts in the condensed consolidated statement of operations have been reclassified to conform with the current presentation.~~

~~The following table identifies the revenue amounts as reported originally and as reclassified.~~

The change reflects a reclassification of gross credits derived from secondary trading in municipal securities from investment banking to commissions. Gross credits related to municipal securities where the Company participates in the syndicate continue to be classified as part of investment banking.

The Company identified certain under/over accruals in communications and technology expenses relating to prior periods which the Company has adjusted in the current period. These out-of-period adjustments, which were not significant to any prior period, resulted in a decrease of communication and technology expenses of $955,000 and $147,000 for the three and six months ended June 30, 2009, respectively.

~~The Company determines the fair value of each of its reporting units and the fair value of the reporting unit’s goodwill under the provisions of SFAS No. 142,~~~~“Goodwill and Other Intangible Assets”~~~~(“SFAS 142”).~~ Goodwill arose upon the acquisitions of Oppenheimer, Old Michigan Corp., Josephthal & Co. Inc., Grand Charter Group Incorporated and the ~~Oppenheimer Divisions.~~former U.S. Private Client Division of CIBC World Markets Inc. The Company defines a reporting unit as an operating segment. The

Company’s goodwill resides in its Private Client Division (“PCD”). Goodwill of a reporting unit is subject to at least an annual test for impairment to determine if the fair value of goodwill of a reporting unit is less than its estimated carrying amount. The Company derives the estimated carrying amount of its operating

segments by estimating the amount of ~~shareholders’~~stockholders’ equity required to support the activities of each operating segment.

~~SFAS 142 requires~~The goodwill of a reporting unit is required to be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. As disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2008,~~2009, the Company performed an interim impairment analysis between annual tests as of ~~September~~June 30, ~~2008~~2009 due to the significant discount between the Company’s market capitalization and its book value at that time. The Company also performed its annual test for goodwill impairment as of December 31, ~~2008.~~2009. Neither of the impairment analyses resulted in impairment charges. Despite a significant rebound in the market capitalization during the six-month period ended June 30, 2009, the market capitalization was still trading at a discount to book value and, as a result, the Company performed an interim goodwill impairment analysis as of June 30, 2009.

The Company’s goodwill impairment analysis performed at June 30, 2009 applied the same valuation methodologies with consistent inputs as that performed at December 31, 2008 (see Note 15 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2008). Based on the analysis performed, the Company concluded that the PCD’s fair value exceeded its carrying amount including goodwill as of June 30, 2009. Despite the difficult operating environment over the past year, the PCD operating segment continued to produce strong revenues, cash flows, and earnings in the ~~trailing-twelve-month period~~three months ended ~~June 30, 2009,~~March 31, 2010, reflective of the Company’s strong franchise and the attractive ~~economics~~economi cs of the underlying transaction and fee-based revenues in the private wealth management business.

Although the price of the Company’s stock declined in the first quarter of 2010, the Company does not believe that impairment exists as at March 31, 2010.

The table below presents information about the reported revenue and profit (loss) before income taxes of the Company for the periods noted. The Company’s segments are described in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2008.~~2009. The Company’s business is conducted primarily in the United States with additional operations in the United Kingdom, Israel, Hong Kong, and Latin America.

The table below presents information about the reported revenue and profit before income taxes of the Company for the three months ended March 31, 2010 and 2009. Asset information by reportable segment is not reported, since the Company does not produce such information for internal use.

	Three months ended June 30,		Six months ended June 30,		Three months ended March 31,
	2009	2008	2009	2008	2010	2009
Revenue:
Private Client	$133,123	$143,395	$248,051	$289,892	$143,652	$114,928
Capital Markets	101,544	90,620	177,721	157,280	86,779	76,176
Asset Management	12,659	16,067	23,914	33,588	15,807	11,256
Other	3,398	6,159	6,303	7,356	624	2,905
Total	$250,724	$256,241	$455,989	$488,116	$246,862	$205,265

Profit (loss) before income taxes:
Private Client	$3,467	$19,303	$5,969	$31,542	$3,125	$2,501
Capital Markets	4,905	(18,167)	(710)	(57,293)	9,537	(5,615)
Asset Management	2,911	3,168	3,693	6,107	3,883	782
Other	1,693	(2,119)	1,202	(4,959)	(685)	(490)
Total	$12,976	$2,185	$10,154	$(24,603)	$15,860	$(2,822)

On ~~July~~April 30, ~~2009,~~2010, the Company announced a cash dividend of ~~U.S.~~ $0.11 per share (totaling $1.4 million) payable on ~~August~~May 28, ~~2009~~2010 to Class A and Class B ~~shareholders~~Stockholders of record on ~~August~~May 14, ~~2009.~~2010.

~~The Company has performed an evaluation of subsequent events through August 6, 2009, the filing date of this Quarterly Report on Form 10-Q.~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Reference is also made to the Company’s consolidated financial statements and notes thereto found in its Annual Report on Form 10-K for the year ended December 31, ~~2008.~~2009.

~~Oppenheimer Holdings Inc. (the Company”)~~The Company engages in a broad range of activities in the securities industry, including retail securities brokerage, institutional sales and trading, investment banking (both corporate and ~~public)~~public finance), research, market-making, ~~securities lending activities,~~ trust services and investment advisory and asset management services. Its principal subsidiaries are Oppenheimer & Co. Inc. (“Oppenheimer”) and Oppenheimer Asset Management (“OAM”). As at ~~June 30, 2009,~~March 31, 2010, the Company provided its services from 94 offices in 26 states located throughout the United States, offices in Tel Aviv, Israel, Hong Kong, China, and London, England and in two offices in Latin America through local broker-dealers. Client assets entrusted to the Company as at ~~June 30, 2009~~March 31, 2010 totaled approximately ~~$55.3~~$69.6 billion. The Company provides investment advisory ~~service s~~services through OAM and Oppenheimer Investment Management (“~~OIM”~~OI M”) and Oppenheimer’s Fahnestock Asset Management, ALPHA and OMEGA Group divisions. The Company provides trust services and products through Oppenheimer Trust Company. The Company provides discount brokerage services through Freedom and through BUYandHOLD, a division of Freedom Investments, Inc. Through OPY Credit Corp., the Company offers syndication as well as trading of issued corporate loans. Evanston Financial Corporation (“Evanston”) is engaged in mortgage brokerage and servicing. At ~~June 30, 2009,~~March 31, 2010, client assets under management by the asset management groups totaled ~~$13.6~~$17.0 billion. At ~~June 30, 2009,~~March 31, 2010, the Company employed ~~3,619~~3,565 employees ~~(3,542~~(3,506 full time and 7759 part time), of whom approximately ~~1,843~~1,440 were ~~registered personnel, including approximately 1,490~~ financial ~~advisers.~~advisors.

The Company’s accounting policies are essential to understanding and interpreting the financial results reported in the condensed consolidated financial statements. The significant accounting policies used in the preparation of the Company’s condensed consolidated financial statements are summarized in notes 1 and 2 to the Company’s ~~condensed~~ consolidated financial statements and notes thereto found in its Annual Report on Form 10-K for the year ended December 31, ~~2008.~~2009. Certain of those policies are considered to be particularly important to the presentation of the Company’s financial results because they require management to make difficult, complex or subjective judgments, often as a result of matters that are inherently uncertain.

During the three months ended ~~June 30, 2009,~~March 31, 2010, there were no material changes to matters discussed under the heading “Critical Accounting Policies” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2008.~~2009.

The securities industry is directly affected by general economic and market conditions, including fluctuations in volume and price levels of securities and changes in interest rates, inflation, political events, investor participation levels, legal and regulatory, accounting, tax and compliance requirements and competition, all of which have an impact on commissions, firm trading, fees from accounts under investment management as well as fees for investment banking services, and

investment income as well as on liquidity. Substantial fluctuations can occur in revenues and net income due to these and other factors.

36As the first quarter of 2010 drew to a close, there were strong indications that the U.S. economy is on the path to recovery. While the unemployment rate remains stubbornly above 9.5%, housing prices have stabilized and begun to improve in many parts of the United States and commodity prices including oil have increased reflecting overall improvements in demand throughout the economy. Although consumer credit continues to reflect difficult times for many consumers, recent retail sales figures reflect improvement in end demand. U.S. equity markets were weak in the early weeks of the quarter, but they rallied strongly to end the quarter up 4.9% as investor confidence improved. While longer term U.S. Treasury yields have begun to increase reflecting increased issuance and an improved economy, short term rates remain at record low rates reflecting the intention of policy makers to continue to stimulate the economy.

~~The U.S economy may be starting~~These improving market conditions have led to ~~emerge from~~overall revenue improvements for the ~~most severe recession~~Company in the ~~last 50 years, although unemployment numbers continue~~first quarter of 2010 compared to ~~grow. Historic levels~~the first quarter of ~~government spending and actions taken to stabilize the financial sector appear likely to result in increased economic activity over the next several quarters and also begin to limit further erosion~~2009. Revenue from commissions in the ~~valuation of housing and other real estate. Improvements~~three months ended March 31, 2010 surpassed the level achieved in ~~consumer confidence should continue over~~ the ~~balance of the year and that should begin to moderate market volatility and lead to further improvement~~comparable period in ~~market conditions.~~

~~Interest rate changes impact the Company’s fixed income businesses~~2009 as ~~well as its cost of borrowed funds. As~~ a result of the ~~Federal Reserve’s reductions~~effects of rising equity prices and improved investor confidence. Revenue from principal transactions was lower in the ~~Federal Funds target rate, average interest rates were lower for the~~ three ~~and six~~ months ended ~~June 30, 2009~~March 31, 2010 compared to the same ~~periods~~period in ~~2008. Management constantly monitors its exposure to interest rate fluctuations to mitigate risk of loss in volatile environments.~~

~~It is anticipated that the issues described~~2009 as improved conditions in the ~~immediately preceding two paragraphs will continue to affect issuance, pricing~~credit markets resulted in lower volatility and ~~activity levels of~~reduced spreads which negatively impacted fixed income trading profits. Revenue for the ~~leveraged loan market which in turn will affect merger and acquisition activity, security issuance by corporations and public issuers and may hamper~~Company from investment banking ~~activity and negatively impact~~activities showed a significant improvement in the ~~business~~first quarter of 2010 compared to the same period in 2009, fueled by equities issuance. Net interest revenue for the Company, ~~although such conditions appear to be easing.~~

As previously reported, the Company acquired a major part of CIBC World Markets’ U.S. Capital Markets Businesses on January 14, 2008, including U.S. Investment Banking, Corporate Syndicate, Institutional Sales and Trading, Equity Research, Options Trading, Convertible Bond Trading, Loan Syndication, High Yield Origination and Trading as well as ~~related Israeli~~fees derived from money market funds and ~~United Kingdom equities business (the “New Capital Markets Business”). The New Capital Markets Business, including~~FD IC insured deposits of clients, while improved compared to the ~~operations acquired~~first quarter of 2009, continue to be significantly and adversely affected by the low interest rate environment. Asset management advisory fees increased in the ~~United Kingdom along with~~first quarter of 2010 due primarily to increases in the ~~Company’s existing Investment Banking, Corporate Syndicate, Institutional Sales and Trading and Equities Research divisions, were combined~~value of assets under management compared to ~~form~~ the ~~Oppenheimer Investment Banking Division (OIB Division) within~~same period in the Capital Markets business segment. The results of the OIB Division will be tracked for the five years following the acquisition for purpose s of determining payments due to CIBC as part of the purchase price.prior year.

~~The Company is not involved~~Expenses increased in the ~~origination~~first quarter of ~~sub-prime mortgages, Commercial Mortgage Backed Securities (CMBS), or Credit Default Swaps (CDS) but does, on a limited basis, participate~~2010 compared to the first quarter of 2009 driven by higher compensation costs related to higher commission and fee-based revenue and higher legal costs related to litigation and regulatory matters. These increases were offset by reductions in ~~the secondary trading of these financial instruments.~~

For a number of years, the Company has offered auction rate securities (“ARS”) to its clients. A significant portion of the market in ~~auction rate securities~~ARS has ‘failed’ because, in ~~February 2008. Due to~~the tight credit market, ~~conditions,~~the dealers ~~were~~are no longer willing or able to purchase the imbalance between supply and demand for ~~auction rate securities.~~ARS. These securities have auctions scheduled on either a 7, 28 or 35 day cycle. Clients of the Company own a significant amount of ARS in their individual accounts. The absence of a liquid market for these securities presents a significant problem to clients and, as a result, to the Company. It should be noted that this is a failure of liquidity and not a default. These securities in almost all cases have not failed to pay interest or principal when due. These securities are fully collateralized for the most part and, for the most part, ~~remai n~~remain good credits. The Company has not acted as an auction agent for ~~auction rate securities~~ARS nor does it have a significant exposure in its proprietary accounts. ~~Overall, approximately 50%~~Recently, some of ~~outstanding auction rate securities~~these ARS have been redeemed at par (100% of issue value) plus accrued dividends by their issuers thus reducing the scope of the issue for clients and the Company. ~~There is no way to predict~~However, in excess of fifty percent of the ~~pace of future redemptions or whether all of these securities will be redeemed by their issuers. There has~~overall ARS issued into the ARS market remain outstanding.

been pressure by regulators for financial services firms to redeem ARS held by clients. Large firms who were underwriters and auction agents for failed ARS (as well as some smaller firms that were not underwriters or auction agents) have made settlements with regulators generally involving the redemption of ARS with their own funds for some classes of firm clients. A number of other firms, such as the Company, who were not underwriters or auction agents, have not made settlements and their clients continue to hold ARS where they have not been redeemed by the issuers of the securities. A small number of firms have been the subject of ongoing lawsuits or regulatory proceedings by various regulators (including the Company by the Massachusetts Securities Division as discussed below) brought to compel the repurchase of client ARS. The Company is not aware of any ARS contested regulato ry proceeding where a final determination has been rendered.

The Company’s clients held at Oppenheimer approximately ~~$740~~$642.8 million of ARS at ~~July 31, 2009,~~April 30, 2010, exclusive of amounts that 1) were owned by Qualified Institutional Buyers (“QIBs”), 2) were transferred to the Company, 3) were purchased by clients after February 2008, or 4) were transferred from the Company to other securities firms after February 2008. This represents a decrease of ~~$95.7~~$39.8 million from amounts that our clients held as of January 31, ~~2009~~2010 as a result of redemptions and refinancings of such securities by the issuers of ARS.

~~The Company continues to review this situation~~As previously reported, during the week ended February 26, 2010, Oppenheimer finalized settlements with each of the New York Attorney General’s office (“NYAG”) and ~~explore options to help bring liquidity~~the Massachusetts Securities Division (“MSD” and, together with the NYAG, the “Regulators”) concluding investigations and administrative proceedings by the Regulators concerning Oppenheimer’s marketing and sale of auction rate securities (“ARS”). Pursuant to the Company’s clients holding ARS. The Company is reviewing various programs initiated by the U.S. government to restore liquidity to the markets. The Company has taken or is considering taking various actions to facilitate the purchase of client-held ARS including filing an amendment to the charter of Oppenheimer Trust Company to become a depository bank eligible for FDIC insurance as well as to obtain access to the US Federal Reserve Discount Window; filing an application with the FDIC for Oppenheimer Trust Company to obtain deposit insurance, filing an application with the Federal Reserve for the Company to become a bank holding company; and filing applications on behalf of Oppenheimer Trust Company and Oppenheimer Holdings to participate in the US Treasury Capital Purchase Program.

~~Based on presently available information, the Company believes that becoming a commercial bank is of limited value in providing a liquidity solution to a large group~~terms of the Company’s clients. Accordingly, the Company is seeking a more extensive solution and is exploring various means of accessing federal lending facilities, including facilities accessible by primary dealers in U.S. Government & Agency securities as well as other lending facilities. In addition, the Company has urged legislative and Treasury Department officials to include ARS as an eligible asset for inclusion in the Trouble Asset Lending Facility. The Company is actively engaged in a process to utilize one or more of these facilities to solve the ARS issue to the extent these facilities become accessible. However, these facilities are currently not accessible by the Company and there is no guarantee that these federal lend ing facilities will remain in existence or that the Company will be able to access any of these facilities in the future in order to resolve the ARS liquidity issue.

On May 8, 2009, the Company’s shareholders voted to move the Company’s jurisdiction of incorporation from Canada to the State of Delaware (U.S.A.). The move was effective on May 11, 2009. The change may, among other things, potentially allow the Company to avail itself of various programs sponsored by the U.S. Treasury and the FDIC which may be available only to U.S.-based companies.

~~The Company believes that one or more of these programs might under certain circumstances provide the liquidity necessary to permit the Company to redeem ARS from~~

its clients. If the Company were to purchase all of the ARS held by former or current clients who purchased such securities prior to the market’s failure in February 2008, these purchases would likely have a material adverse effect on the Company’s financial condition including its cash position. Therefore, before purchasing any of these securities, the Company would need to assess whether it had sufficient regulatory capital or borrowing capacity to do so; at present the Company does not have such capacity. The Company does not currently believesettlements, Oppenheimer estimates that it is obligated to ~~make any such purchases.~~purchase up to an aggregate of approximately $39 million of eligible ARS in the initial 15 month period covered by the settlements with the Regulators. See ~~“RISK FACTORS~~further discussion in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 under “Risk Factors – The Company may be adversely affected by the failure of the Auction Rate ~~Securities Market” appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008”~~Sec urities Market,” and, ~~“Factors Affecting ‘Forward-Looking Stateme nts.~~herein, under “Legal Proceedings” and. “Regulatory Environment – Other Regulatory Matters.”

The Company is focused on growing its private client and asset management businesses through strategic additions of experienced financial advisors in its existing branch system and employment of experienced money management personnel in its asset management business. In addition, the Company is committed to the improvement of its technology capability to support client service and the expansion of its capital markets capabilities while addressing the issue of managing its ~~expenses to better align them with the current investment environment.~~expenses..

The brokerage business is subject to regulation by, among others, the SEC and FINRA ~~(formerly the NYSE and NASD)~~ in the United States, the Financial Services Authority (“FSA”) in the United Kingdom, the Securities and Futures Commission in Hong Kong, the Israeli Securities Authority (“ISA”) in Israel and various state securities regulators. Events in recent years surrounding corporate accounting and other activities leading to investor losses resulted in the enactment of the Sarbanes-Oxley Act and have caused increased regulation of public companies. New regulations and new interpretations and enforcement of existing regulations are creating increased costs of compliance and increased investment in systems and procedures to comply with these more complex and onerous requirements. Increasingly, the various states are imposing their own regulations that make the uniformity of regulation a thing of the past, and make ~~compliance~~compl iance more difficult ~~an d~~and more expensive to ~~monitor.FINRA has recently completed the unification and codification of its legacy NYSE and NASD rules.~~ monitor.

Recent events connected to the worldwide credit crisis ~~has~~have made it highly likely that the self-regulatory framework for financial institutions will be changed in the United ~~States.~~States and around the world. The changes are likely to significantly reduce leverage available to financial institutions and to increase ~~the~~ transparency to regulators and investors of risks taken by such ~~institutions to regulators and investors.~~institutions. It is impossible to presently predict the nature of such rulemaking, ~~but,~~although proposals being considered in the U.S. and the United Kingdom would possibly create a new regulator for certain activities, regulate and/or prohibit proprietary trading for certain deposit taking institutions, control the amount and timing of compensation to “highly paid” employees, create new regulations around financial transactions with consumers, and possibly create a tax on securities transactions. If and when enacted, such regulations ~~will~~wi ll likely increase compliance costs and reduce returns earned by financial service providers. Any such action could have a material adverse affect on our business, financial condition and results of operations.

The impact of the rules and requirements that were created by the passage of the Patriot Act, and the anti-money laundering regulations (AML) in the U.S. and similar laws in other countries that are related thereto, have created significant costs of compliance and can be expected to continue to do so. Intervention by governments and monetary authorities around the world as a result of the current credit market dislocations will most likely result in new regulations around the world that will significantly reduce the availability of leverage to the balance sheets of financial institutions. It is impossible to predict the impact or costs associated with these yet to be announced programs and regulations.

Pursuant to FINRA Rule 3130 (formerly NASD Rule 3013 and NYSE Rule 342), the chief executive officers (“CEOs”) of regulated broker-dealers (including the CEO of Oppenheimer) are required to certify that their companies have processes in place to establish and test supervisory policies and procedures reasonably designed to achieve compliance with federal securities laws and regulations, including applicable regulations of ~~self-~~

~~regulatory~~self-regulatory organizations. The CEO of the Company is required to make such a certification on an annual basis and did so onin March, ~~18, 2009.~~2010.

As noted above, during the week ended February 26, 2010, Oppenheimer ~~has been responding to the SEC, FINRA and several state regulators as part of an industry-wide review~~finalized settlements with each of the NYAG and the MSD concluding investigations and administrative proceedings by the Regulators concerning Oppenheimer’s marketing and sale of ~~auction rate securities (“ARS”).~~ARS. As a result, the Company will purchase eligible ARS from eligible clients pursuant to those settlements. Based on the terms of the settlements, the Company will, no later than May 24, 2010, make an initial national offer to eligible clients who currently hold accounts at Oppenheimer to purchase ARS. Eligible clients’ accounts will be aggregated on a “household” basis. The Company will make subsequent offers to eligible clients holding eligible ARS based on the availability of funds for such purpose. As a result of this limitation, it is unlikely that the Company will be required over any short period of time to purchase all of the ARS currently held by the Company’s former or current clients who purchased ARS prior to the beginning of the market’s failure in February 2008. The Company will continue to assess whether it has ~~answered several document requests and subpoenas and there~~sufficient regulatory capital or borrowing capacity to make any purchases of ARS beyond those agreed upon in the settlements described above. The Company estimates that it is obligated to purchase up to an aggregate of approximately $39 million of eligible ARS in the initial 15 month period covered by settlements with the Regulators. Such purchases will be paid for from available funds. The Company believes that the cumulative amount of ARS which it may purchase pursuant to the terms of the settlements will not create a condition that would have ~~been on-the-record interviews of Company personnel.~~a material adverse affect on the Company’s financial statements. The Company is continuing to cooperate with regulators from other states conducting investigations surrounding sales of ARS. Notwithstanding the ~~investigating entities. On November 18, 2008,~~foregoing settlements, the ~~Massachusetts Securities Division filed an Administrative Complaint (the “Complaint”), captioned~~InCompany remains as a nam ed respondent in a number of arbitrations by its current or former clients as well as lawsuits, including a class action lawsuit, related to its sale of ARS. See further discussion in the ~~Matter of Oppenheimer & Co. Inc., Albert Lowenthal, Robert Lowenthal and Greg White, Docket No. 2008-0080, alleging violations~~Company’s Annual Report on Form 10-K for the year ended December 31, 2009 under “Risk Factors – The Company may be adversely affected by the failure of the Massachusetts General Law, the Massachusetts Uniform Securities Act and regulations thereunder with respect to the sale by Oppenheimer of ARS to its clients. The Complaint alleges, inter alia, that Oppenheimer improperly misrepresented t he nature of ARS and the overall stability and health of the ARS market. The Complaint also alleges that key Oppenheimer executives and Auction Rate ~~Department personnel sold their personal ARS holdings while in possession of information that the entire ARS market was in danger of failing~~Securities Market,” and, that those individuals failed to disclose this information to investors. The Massachusetts Securities Division seeks various forms of relief including an order requiring Oppenheimer to offer rescission to residents of Massachusetts of sales of ARS at par and requiring Oppenheimer to make full restitution to investors who have already sold their ARS below par. The Division also seeks an order revoking the Massachusetts registration of the Chairman of Oppenheimer as a broker-dealer agent and requiring Oppenheimer and the named executives and other personnel to pay an administrative fine in an amount to be determined. Oppenheimer and all individual respondents have filed an answer to the Complaint denying that the allegations in the Complaint have any basis in fact or law. The matter is scheduled for hearings in November 2009. All respondents intend to vigorously defend against the allegations in the Complaint.herein, under “Legal Proceedings” and. “Regulatory Environment- Other Regulatory Matters.”

A subsidiary of the Company was the administrative agent for two closed-end funds until December 5, 2005. The Company has been advised by the current administrative agent for these two funds that the Internal Revenue Service may file a claim for interest and penalties that would approximate $5 million for one of these funds with respect to the 2004 tax year as a result of an alleged failure of ~~such~~the Company’s subsidiary to take certain actions. The Company will continue to monitor developments in this matter.

The Company operates in all state jurisdictions in the United States and is thus subject to regulation and enforcement under the laws and regulations of each of these jurisdictions. The Company has been and expects that it will continue to be subject to investigations and some or all of these may result in enforcement proceedings as a result of its business conducted in the various states.

As part of its ongoing business, the Company records reserves for legal expenses, judgments, fines and/or awards attributable to litigation and regulatory matters. In connection therewith, the Company has maintained its legal reserves at levels it believes will resolve outstanding matters, but may increase or decrease such reserves as matters warrant. In accordance with applicable accounting guidance, the Company establishes reserves for litigation and regulatory matters when those matters present loss contingencies that are both probable and estimable. When loss contingencies are not both probable and estimable, the Company does not establish reserves. In some of the matters described below in Item 3, Legal Proceedings , including but not limited to the U.S Airways matter, loss contingencies are not probable and estimable in the view of management and, accordingly, reserves have not been establishe d for those matters.

The Company is committed to an on-going investment in its technology and communications infrastructure including extensive business continuity planning and investment. These costs are on-going and the Company believes that current and future costs will ~~exceed historic levels~~remain high due to business and regulatory requirements. This investment has increased in recent years as a result of the acquisition of the New Capital Markets Businesses from CIBC and the Company’s need to build out its platform to accommodate this business. The Company successfully transitioned these acquired businesses to its platform in the ~~New Capital Markets Business but such~~third quarter of 2008.

The Company's long-term plan is to continue to expand existing offices by hiring experienced professionals as well as through the purchase of operating branch offices from other broker dealers or the opening of new branch offices in attractive locations, thus maximizing the potential of each office and the development of existing trading, investment banking, investment advisory and other activities. Equally important is the search for viable acquisition candidates. As opportunities are presented, it is the long-term intention of the Company to pursue growth by acquisition where a comfortable match can be found in terms of corporate goals and personnel at a price that would provide the Company's stockholders with incremental value. The Company may review additional potential acquisition opportunities, and will continue to focus its attention on the management of its existing business. In addition, the Company is committed to improving its technology capabilities to support client service and the expansion of its capital markets capabilities.

~~expansion has been completed. The Company believes that internally-generated funds from operations are sufficient to finance its expenditure program.~~

Oppenheimer Holdings Inc. reported a net profit of ~~$7.1~~$9.2 million or ~~$0.55~~$0.69 per share for the ~~second~~first quarter of 2009, compared to $1.6 million or $0.12 per share in the second quarter of 2008. Revenue for the second quarter of 2009 was $250.7 million, compared to revenue of $256.2 million in the second quarter of 2008, a decline of 2%.

~~The net profit for the six months ended June 30, 2009 was $5.1 million or $0.39 per share~~2010, compared to a net loss of ~~$14.5~~$2.0 million or ~~$1.07~~$0.15 per share in the first ~~half~~quarter of ~~2008.~~2009. Revenue for the ~~six months ended June 30, 2009~~first quarter of 2010 was ~~$456.0~~$246.9 million, compared to ~~$488.1~~revenue of $205.3 million ~~for~~in the ~~same period in 2008, a decline~~first quarter of ~~about 7%~~2009, an increase of 20.3%. Client assets entrusted to the Company and under administration totaled approximately $69.6 billion while client assets under fee-based programs offered by the asset management groups totaled approximately $17.0 billion at March 31, 2010 ($48.1 billion and $11.5 billion, respectively, at March 31, 2009).

Lower revenue reflected lower income from investment banking fees as mid-sized companies continued to have limited access to the capital markets, lower fee based revenue from investment advisory services due to declines in the value of assets under management in line with market declines and lower interest revenue partially offset by an increase in commissions and principal trading revenue. However, the Company’s pre-tax results were positively impacted by the reduction in, or elimination of, many costs associated with its January 2008 acquisition of a major part of CIBC World Markets’ U.S. Capital Markets Businesses. The Company’s expenses for the three and six months ended June 30, 2009 decreased by approximately $16 million (6%) and $67 million (13%), respectively, compared to the same periods in 2008. Cost savings achieved during the three and six months ended June 30, 2009 were l argely driven by a reduction in expenses related to deferred compensation obligations to acquired employees which decreased by $11.5 million and $23.2 million, respectively, compared to the same periods in 2008. The decrease in deferred compensation obligations for the three month period ended June 30, 2009 included a reduction of compensation expenses of $2.6 million related to changes in the assumptions used to determine the Company’s ultimate obligation under these arrangements. The deferred compensation-related cost savings were offset by increases in variable compensation related to increased revenue produced in the second quarter of 2009. Overall compensation and related expenses were flat for the three months and decreased by 9% in the six months ended June 30, 2009 compared to the same periods in 2008.

Expenses were also reduced for the three and six months ended June 30, 2009 as a result of the migration of the acquired business to the Company’s internal systems in the second half of 2008. The cost of transitional support charges for the three and six months ended June 30, 2008 was $9.8 million and $20.6 million, respectively. This migration resulted in related increases in communication and technology costs of $4.0 million and $1.2 million, respectively, in the three and six months ended June 30, 2009 compared to the same periods in 2008. Interest expense decreased by 56% and 55%, respectively, in the three and six months ended June 30, 2009 as a result of: 1) lower interest rates in 2009, 2) decreased securities lending and bank loan activity, and 3) a lower outstanding balance on the Company’s Senior Secured Credit Note compared to the same periods in 2008. During the second quarter of 2009, the Company sustained a one-time charge of approximately $2.0 million in the form of a departure tax payable to the government of Canada in connection with the move of the domicile of the corporation from Canada to the U.S. as well as approximately $1.3 million in professional fees related to this matter totaling $3.3 million on a pre-tax basis ($0.21 per share on an after tax basis), included in other expenses in the condensed consolidated statement of operations. This Canadian departure tax is not deductible for tax purposes which, as a result, negatively impacted the effective tax rate for the three and six month periods ended June 30, 2009.

The following table and discussion summarizes the changes in the major revenue and expense categories for the periods ~~presented (in~~presented:

~~Revenue from commissions and principal trading increased~~Commission revenue was $138.2 million for the first quarter of 2010, an increase of 11.6%compared to $123.8 million in the ~~three~~first quarter of 2009. Increased investor participation and ~~six months ended~~stronger markets in the 2010 period contributed to the improvement.

Principal transactions revenue was $16.7 million in the first quarter of 2010 compared to $24.7 million in the first quarter of 2009, a decrease of 32.6%. The decrease stems from lower profits in fixed income trading which were $12.0 million in the first quarter of 2010 compared to $19.8 million in the first quarter of 2009. The strong 2009 profits in fixed income trading were driven by a period of unprecedented volatility in the credit markets, wide spreads and a strong improvement in confidence which led to a rapid increase in bond prices in 2009’s first quarter, compared to the more moderate movements prevailing in the most recent quarter.

Interest revenue was $13.8 million in the first quarter of 2010, an increase of 83.0% compared to $7.5 million in the first quarter of 2009. The increase of $6.3 million is primarily attributable to interest earned on positions and reverse repurchase agreements held by the government trading desk which began operations in June ~~30,~~2009.

Investment banking revenue increased 193.1% to $25.2 million in the first quarter of 2010, compared to $8.6 million in the first quarter of 2009 with revenue from equity issuance in an improving environment accounting for $9.8 million of the variance.

Advisory fees were $42.8million in the first quarter of 2010, an increase of 19.7% compared to $35.8 million in the first quarter of 2009. Asset management fees increased by $11.4 million in the first quarter of 2010 compared to the same ~~periods~~period in ~~2008~~2009 as a result of an increase in the ~~addition~~value of ~~experienced financial advisors and traders as well as improved investor confidence~~assets under management of 31.2% during the second quarter of 2009. Commissions increased 13% and 3%, respectively, in the three and six months ended June 30, 2009 compared to the same periods in 2008. Principal transactions increased 57% and 89%, respectively, in the three and six months ended June 30, 2009 compared to the same periods in 2008. These gains resulted from the contribution of new and existing institutional fixed income sales and trading professionals amid higher activity levels from institutional investors as credit conditions continued to improve.

~~Advisory~~period. Asset management fees declined 31% and 33%, respectively, and interest income declined 49% and 54%, respectively, in the three and six months ended June 30, 2009 compared to the same periods in 2008. The decline in advisory fee revenues resulted from the reduced level ofare calculated based on client assets under management at the ~~beginning~~end of the ~~second~~prior quarter and were $16.4 billion at December 31, 2009 ($~~11.5~~12.5 billion at December 31, 2008). This increase was offset by a decrease of $5.5 million due to waivers on fees that otherwise would have been due from money market funds.

Other revenue increased 111.2% to $10.2 million in the first quarter of 2010 compared to $4.9 million in the first quarter of 2009 primarily as a result of a $2.4 million increase in the mark-to-market value of Company-owned life insurance policies that relate to our deferred compensation programs and increased fees generated from Evanston in the amount of $2.3 million.

Compensation and related expenses increased 12.5% in the first quarter of 2010 to $158.1 million from $140.7 million during the first quarter of 2009. Production and incentive-related compensation increased $13.0 million, deferred compensation costs increased $2.6 million and payroll taxes and health benefits increased $4.4 million in the first quarter of 2010 compared with the same period in 2009. These increases were offset by a decrease of $3.9 million in share-based compensation expense directly related to the drop in the price of the Company’s stock during the quarter ($25.51 per share at March 31, 2010 compared to $33.22 per share at December 31, 2009) as well as an out-of-period adjustment related to over-accruals in compensation of $3.7 million which ~~reflects overall~~was adjusted in the current period.

Clearing and exchange fees increased 14.4% to $6.6 million in the first quarter of 2010 compared to $5.7 million in the same period of 2009 due to increased transaction volume.

Communications and technology expenses decreased 16.8% to $16.4 million in the first quarter of 2010 from $19.8 million in the same period of 2009 as a result of a reduction in market ~~declines since~~data costs of $2.4 million. This reduction stems from favorable contract negotiations as well as the ~~second half~~elimination of ~~2008. Assets under fee based programs~~redundant services.

Occupancy and equipment costs of $18.5 million in the first quarter of 2010 were flat compared to $18.2 million in the first quarter of 2009.

Interest expenses increased ~~during~~8.0% to $6.0 million in the ~~three months ended~~first quarter of 2010 from $5.5 million in the same period in 2009 primarily due to interest expense incurred on positions and repurchase agreements held by the government trading desk which began operations in June ~~30, 2009 to $13.6 billion, an increase of 18% ($16.4 billion at June 30, 2008). Clients continued to pay down debt resulting in~~2009.

lower average customer debit balances which were down by 41% and 40%, respectively, in the three and six months ended June 30, 2009 compared to the same periods in 2008. Lower interest bearing balances coupled with a decline in interest rates resulted in lower margin interest revenues of $6.0 million and $13.6 million, respectively, in the three and six months ended June 30, 2009 over last year’s comparable periods. Lower interest rates also resulted in lower fees from money market funds and FDIC insured deposits which were down $4.2 million (a decline of 37%) and $7.3 million (a decline of 32%), respectively, during the three and six months ended June 30, 2009 compared to the same periods in 2008.

Investment banking activities remained disappointing as a result of limited availability of credit to mid-sized companies and the lack of equity issuances by similar companies throughout the period. Merger and acquisition activity also remained at low levels due to the inability of buyers to issue acquisition related debt and concerns over the health of the economy and corporate balance sheets. Municipal public finance activity also was significantly affected by credit and budgetary concerns for municipalities resulting in lower activity in this sector. Overall revenues from investment banking declined by 40% and 42%, respectively, for the three and six months ended June 30, 2009 compared to the same periods in 2008.

Interest revenue decreased by 49% and 54%, respectively, in the three and six months ended June 30, 2009 compared to the same periods in 2008. Lower interest bearing balances coupled with a decline in interest rates resulted in lower margin interest revenues of $6.0 million and $13.6 million, respectively, in the three and six months ended June 30, 2009 over last year’s comparable periods.

Other revenue increased by 112% and 141%, respectively, in the three and six months ended June 30, 2009 compared to the same periods in 2008. The increase is primarily attributable to mark-to-market increases in the value of company-owned life insurance polices that support the Company’s deferred compensation programs (offset by similar increases in related compensation expense), representing 50% and 41%, respectively, of the increase in other revenue in the three and six months ended June 30, 2009 compared to the same periods in 2008. The increase in revenue was also impacted by higher service fee income in the 2009 periods compared to the same periods in 2008, representing 26% and 19%, respectively, of the increase in other revenue in the three and six months ended June 30, 2009 compared to the same periods in 2008.

Despite a difficult period in the capital markets, as described above, the Company’s pre-tax results were positively impacted by the reduction in or elimination of many costs associated with its January 2008 acquisition.

Overall compensation and related expenses were flat for the three months and decreased by 9% in the six months ended June 30, 2009 compared to the same periods in 2008. The cost savings related to deferred compensation obligations to acquired employees, described above, was offset by increased variable compensation tied to higher commission and principal transactions revenue in the three and six months ended June 30, 2009 compared to the same periods in 2008.

The decline of 21% and 23%, respectively, in clearing and exchange fees for the three and six months ended June 30, 2009 compared to the same periods in 2008 primarily reflects the economies of transitioning the acquired businesses to the Company’s platform.

The Company’s occupancy costs increased 2% and 6%, respectively, in the three and six months ended June 30, 2009 compared to the same periods in 2008. Communications and technology costs decreased 21% and 3%, respectively, in the three and six months ended June 30, 2009 compared to the same periods in 2008, offsetting costs that were reflected as transition costs in the prior year which were included in other expenses on the condensed consolidated statement of operations.

Interest expense decreased 56% and 55% for the three and six months ended June 30, 2009 compared to the same periods of 2008. The interest expense on the Company’s Senior Secured Credit Note declined by $453,000 and $1.4 million, respectively, for the three and six months ended June 30, 2009 compared to the same periods in 2008 due to declining interest rates and payments of principal.

Other expenses ~~decreased 14% and 30%, respectively, for~~increased 39.7% to $25.4 million in the ~~three and six months ended June 30, 2009 compared to~~first quarter of 2010 from $18.2 million in the same ~~periods~~period in ~~2008. The 2008 period included substantial transition~~2009 primarily due to increased legal costs ~~related to the acquisition~~ of ~~the acquired businesses~~approximately $4.5 million which have ~~terminated,~~been incurred in response to increased client litigation and arbitration activity as ~~described above. Such transition~~well as legal costs ~~amounted~~ to $9.8 million and $20.6 million, respectively, in other expenses in the three and six months ended June 30, 2008. Included in other expenses is the approximately $2 million departure tax payable to the government of Canada in connection with the move of the domicile of the corporation from Canada to the U.S. In addition, legal and professional fees have increased by 124% and 50%, respectively, in the three and six months ended June 30, 2009 compared to the same periods in 2008.resolve regulatory matters.

Total assets at ~~June 30, 2009~~March 31, 2010 increased by ~~28%~~12% from December 31, ~~2008~~2009 levels ~~primarily~~ due in large part to ~~balances~~the Company’s expansion of ~~securities purchased under agreement to resell as a result of the Company significantly expanding~~ its government trading ~~operations~~desk which began in June 2009. The Company began facilitating those operations through the use of securities sold under agreement to repurchase (“repurchase agreements”) and securities purchased under agreement to resell (“reverse repurchase agreements”). In addition, receivables from customers and receivables from brokers and clearing organizations increased.

The market environment that developed in 2008 continues in 2009 in the wake of the failure of financial institutions and seizures in the credit markets resulted in declining markets around the world and higher levels of risk. Concerns about risks to the financial system seem to be lessened in the wake of improving market and liquidity conditions in the second quarter of 2009.

The Company satisfies its need for short-term funds from internally generated funds and collateralized and uncollateralized borrowings, consisting primarily of bank loans, stock loans ~~repurchase agreements~~ and uncommitted lines of credit. The Company’s ~~longer term~~longer-term capital needs ~~have been~~are met through the issuance of the Senior Secured Credit Note and the Subordinated Note. The amount of ~~the Company's~~Oppenheimer's bank borrowings fluctuates in response to changes in the level of the Company's securities inventories and customer margin debt, changes in stock loan ~~and repurchase agreements~~ balances and changes in notes receivable from employees. The Company believes that such availability will continue going ~~forward.~~forward but current conditions in the credit markets may make the availability of bank financing more challenging in the months ahead. Oppenheimer has arrangements with banks for borrowings on a fully-collateralized basis. At ~~June 30, 2009, $86.6~~March 31, 2010, the Company had $37.6 million of such borrowings ~~were~~ outstanding compared to outstanding borrowings of ~~$6.5 million~~nil at

December 31, ~~2008.~~2009. At ~~June 30, 2009,~~March 31, 2010, the Company had available collateralized and uncollateralized letters of credit of ~~$147.2~~$237.7 million.

~~The unprecedented volatility of~~Volatility in the financial markets, ~~accompanied by a severe deterioration~~and the continuance of ~~economic conditions worldwide,~~credit problems throughout the national economy, has had ~~a pronounced~~an adverse affect on the availability of credit through traditional sources. As a result of concern about the ability of markets generally and the strength of counterparties specifically, many lenders have reduced and, in some cases, ceased to provide funding to the Company on anboth a secured and unsecured basis. Further, the current environment ishas not been conducive to ~~most~~ new financing ~~and~~or the renegotiation of existing ~~loans~~loans.

On February 23, 2010 and February 26, 2010, the Company reached settlement agreements with the Regulators with respect to clients’ ownership and holdings of ARS. Under the terms of those settlements, the Company has ~~become expensive~~agreed to purchase, in aggregate, ARS with a par value of approximately $31.5 million at December 31, 2009, from eligible clients no later than August 7, 2010 and ~~problematic.~~to establish redemption funds of $4.5 million and $2.8 million no later than August 28, 2010 and February 29, 2011, respectively. The ~~infusion~~Company estimates that it is obligated to purchase an aggregate of ~~significant government assistance~~approximately $39 million of eligible ARS in the initial 15 month period covered by the settlements with the Regulators. It will make subsequent offers to eligible clients holding eligible ARS based on the Company’s availability of funds for such purpose, the amount of which the Company believes, pursua nt to the ~~banks and~~terms of the settlements, will not create a condition that would have a material adverse affect on the Company’s financial ~~sector aims to mitigate these issues and there are indications~~statements. As a result, it is unlikely that the ~~availability~~Company will be required over any short period of ~~credit is~~time to purchase all of the ARS currently held by the Company’s former or current clients who purchased ARS prior to the beginning of the market’s failure in February 2008. In future periods the Company, pursuant to ~~ease.~~the Settlements, will assess whether it has sufficient regulatory capital or borrowing capacity to make any purchases of ARS beyond those agreed upon in the settlements described above.

In 2006, the Company issued a Senior Secured Credit Note in the amount of $125.0 million at a variable interest rate based on LIBOR with a seven-year term to a syndicate led by Morgan Stanley

Senior Funding Inc., as agent. In accordance withtheSenior Secured Credit Note, the Company has provided certain covenants to the lenders with respect to the maintenance of a minimum fixed charge ratio and maximum leverage ratio and minimum net capital requirements with respect to Oppenheimer.

On December 22, 2008, certain terms of the Senior Secured Credit Note were amended, including (1) revised financial covenant levels that require that (i) the Company maintain a maximum leverage ratio (total long-term debt divided by EBITDA) of ~~4.45~~3.05 at ~~June 30, 2009~~March 31, 2010 and (ii) the Company maintain a minimum fixed charge ratio (EBITDA adjusted for capital expenditures and income taxes divided by the sum of principal and interest payments on long-term debt) of ~~1.70~~1.45 at ~~June 30, 2009;~~March 31, 2010; (2) an increase in scheduled principal payments as follows: 2009 - $400,000 per quarter plus $4.0 million on September 30, 2009 ~~and 2010~~ - $500,000 per quarter plus $8.0 million on September 30, 2010; (3) an increase in the interest rate to LIBOR plus 450 basis points (an increase of 150 basis points); and (4) a pay-down of principal equal to the cost of any share repurchases made pursuant to the ~~Normal Course~~ Issuer Bid. In the ~~Company ’s~~Company’s view, the maximum leverage ratio and minimum fixed charge ratio represent the most restrictive covenants. These ratios adjust each quarter in accordance with the loan terms, and become more restrictive over time. At ~~June 30, 2009,~~March 31, 2010, the Company was in compliance with all of its covenants.

On January 14, 2008, in connection with the acquisition of ~~certain capital markets businesses from CIBC (the “New~~the New Capital Markets ~~Business”),~~Business, CIBC made a loan in the amount of $100.0 million and the Company issued a Subordinated Note to CIBC in the amount of $100.0 million at a variable interest rate based on LIBOR. The Subordinated Note is due and payable on January 31, 2014 with interest payable on a quarterly basis. The purpose of this note is to support the capital requirements of the New Capital Markets Business. In accordance withtheSubordinated Note, the Company has provided certain covenants to CIBC with respect to the maintenance of a minimum fixed charge ratio and maximum leverage ratio and minimum net capital requirements with respect to Oppenheimer.

	For the six months ended June 30,		For the three months ended March 31,
	2009	2008	2010	2009
Cash used in operating activities	$(60,690)	$(111,539)	$(52,966)	$(15,539)
Cash used in investing activities	(4,155)	(58,282)	(1,337)	(2,578)
Cash provided by financing activities	66,273	200,930	37,575	14,511
Net increase in cash and cash equivalents	$1,428	$31,109
Net decrease in cash and cash equivalents			$(16,728)	$(3,606)

Management believes that funds from operations, combined with the Company's capital base and available credit facilities, are sufficient for the Company's liquidity needs in the foreseeable future. (See Factors Affecting “Forward-Looking Statements”).

During the second quarter of 2009, the Company purchased no Class A Shares pursuant to the Normal Course Issuer Bid. On May 27, 2009, the Company announced its intention to purchase up to 600,000 shares of its Class A non-voting common stock commencing June 2, 2009 and ending December 31, 2009. The Company will undertake repurchases only if market conditions warrant such repurchases.

~~During the second~~first quarter of 2009, the Company issued ~~2,075~~123,551 shares of Class A ~~Shares~~Stock pursuant to the Company’s share-based compensation programs.

On ~~May 29, 2009,~~February 26, 2010, the Company paid cash dividends of ~~U.S.~~ $0.11 per share of Class A and Class B ~~Share~~Stock totaling approximately ~~$1.4~~$1.5 million from available cash on hand.

On ~~July 29, 2009,~~April 30, 2010, the Board of Directors declared a regular quarterly cash dividend of ~~U.S.~~ $0.11 per share of Class A and Class B ~~Share~~Stock payable on ~~August~~May 28, ~~2009~~2010 to ~~shareholders~~stockholders of record on ~~August~~May 14, ~~2009.~~2010.

The book value of the Company’s Class A and Class B ~~Shares~~Stock was ~~$33.12~~$34.73 at ~~June 30, 2009~~March 31, 2010 compared to ~~$32.94~~$32.43 at ~~June 30, 2008, an increase of less than 1%,~~March 31, 2009, based on total outstanding shares of ~~13,070,747~~13,341,232 and ~~13,340,094,~~13,068,672, respectively.

The diluted weighted average number of shares of Class A and Class B ~~Shares~~Stock outstanding for the three months ended ~~June 30, 2009~~March 31, 2010 was ~~13,283,500~~13,855,982 compared to ~~13,649,203~~13,072,097 outstanding for the same period in ~~2008.~~2009.

Information concerning the Company’s off-balance sheet arrangements is included in Note 5 of the notes to the condensed consolidated financial statements. Such information is hereby incorporated by reference.

The Company has contractual obligations to make future payments in connection with non-cancelable lease obligations and debt assumed upon the acquisition of the New Capital Markets Business as well as debt issued in 2006. The Company also has contractual obligations ~~in connection with the acquisition of the New Capital Markets Business~~ to make payments to CIBC in connection with deferred compensation earned by former CIBC employees in connection with the acquisition as well as the earn-out to be paid in ~~2013.~~2013 as described in note 19 of the consolidated financial statements for the year ended December 31, 2009 appearing in Item 8 of the Company’s Annual Report of Form 10-K for the year ended December 31, 2009.

The following table sets forth these contractual and contingent commitments as at ~~June 30, 2009.~~

~~(1)~~ Represents payments to be made to CIBC in relation to deferred incentive compensation to former CIBC employees for awards made by CIBC ~~prior~~pursuant to the January 14, 2008 acquisition by the Company.

Represents unfunded commitments to provide revolving credit facilities by OPY Credit Corp.

Represents payments to be made pursuant to the ARS settlements entered into with Regulators in February 2010. See notes 13 and 20 to the consolidated financial statements for the year ended December 31, 2009 appearing in Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

See Note 2 to the condensed consolidated financial statements. Such information is hereby incorporated by reference.

From time to time, the Company may publish “Forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act or make oral statements that constitute forward-looking statements. These forward-looking statements may relate to such matters as anticipated financial performance, future revenues or earnings, business prospects, projected ventures, new products, anticipated market performance, and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to

comply with the terms of the safe harbor, the Company cautions readers that a variety of factors could cause the Company’s actual results to differ materially from the anticipated results or other expectations expressed in the Company’s forward-looking statements. These risks and uncertainties, many of which are ~~beyond~~bey ond the Company’s control, include, but are not limited to: (i) transaction volume in the securities markets, (ii) the volatility of the securities markets, (iii) fluctuations in interest rates, (iv) changes in regulatory requirements which could affect the cost and method of doing business, (v) fluctuations in currency rates, (vi) general economic conditions, both domestic and international, (vii) changes in the rate of inflation and the related impact on the securities

markets, (viii) competition from existing financial institutions and other participants in the securities markets, (ix) legal developments affecting the litigation experience of the securities industry and the Company, including developments arising from the failure of the Auction Rate Securities markets, (x) changes in federal and state tax laws which could affect the popularity of products sold by the Company, (xi) the effectiveness of efforts to reduce costs and eliminate overlap, (xii) war and nuclear confrontation, (xiii) the Company’s ability to achieve its business plan, (xiv) corporate governance issues, (xv) the impact of the credit crisis on business operations, (xvi) the effect of bailout and related legislation, (xvii) the consolidation of the banking and financial services industry, (xviii) the effects of the economy on the Company’s ability to find and maintain financing options and ~~liquidity;~~liquidity, (xix) credit, operations, legal and regulatory ~~risks;~~risks, and (xx) risks related to foreign operations. There can be no assurance that the Company has correctly or completely identified and assessed all of the factors affecting the Company’s business. The Company does not undertake any obligation to publicly update or revise any forward-looking statements.

During the three months ended ~~June 30, 2009,~~March 31, 2010, there were no material changes to the information contained in Part II, Item 7A of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2008.~~2009.

The Company carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures as defined in Rule 13a–15(e) and 15d-15(e) of the Securities Exchange Act of 1934. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

Management, including the Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s disclosure controls and procedures or its internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision–making can be faulty and that break-downs can occur b ecause of a simple error or omission. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based, in part, upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in

achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost–effective control system, misstatements due to error or fraud may occur and not be detected.

The Company confirms that its management, including its Chief Executive Officer and its Chief Financial Officer, concluded that the Company’s disclosure controls and procedures are effective to ensure that the information required to be disclosed by the Company in its reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.

There have been no significant changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange ~~Act)~~Act of 1934) during the three months ended ~~June 30, 2009~~March 31, 2010 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

Many aspects of the Company’s business involve substantial risks of liability. In the normal course of business, the Company has been the subject of customer complaints and has been named as a defendant or co-defendant in various lawsuits or arbitrations creating substantial exposure. The incidences of these types of claims have increased since the onset of the credit crisis and the resulting market disruptions. The Company is also involved from time to time in certain governmental and self-regulatory agency investigations and proceedings. These proceedings arise primarily from securities brokerage, asset management and investment banking activities. There has been an increased incidence of regulatory investigations in the financial services industry in recent years, including customer claims, ~~seeking in total~~which seek substantial ~~damages.~~penalties, fines or other monetary relief.

While the ultimate resolution of routine pending litigation and other matters cannot be currently determined, in the opinion of management, after consultation with legal counsel, the Company ~~has no reason to~~does not believe that the resolution of these matters will have a material adverse effect on its financial condition. However, the Company’s results of operations could be materially affected during any period if liabilities in that period differ from prior estimates. ~~In addition,~~Notwithstanding the foregoing, an adverse result in any of the matters set forth below, ~~each~~many of which are at a preliminary stage, ~~may~~would have a material adverse effect on the Company’s results of operations and financial condition, including its cash position. The materiality of legal matters to the Company’s future operating results depends on the level of future results of operations as well as the timing and ultimate outcome of such legal ~~matters.~~matt ers. See the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 under “Risk Factors ~~ 0;~~– The Company may be adversely affected by the failure of the Auction Rate Securities Market” ~~in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008,~~and herein under “Factors Affecting ‘Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Regulatory Environment.”

For a number of years, the Company offered Auction Rate Securities (“ARS”) to its clients. A significant portion of the market in ~~auction rate securities~~ARS ‘failed’ in February 2008 due to credit market conditions, and dealers were no longer willing or able to purchase the imbalance between supply and demand for ~~auction rate securities.~~ARS. See the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 under Risk Factors – The Company may be adversely affected by the failure of the Auction Rate Securities Market” and herein under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Regulatory Environment.”

On April 11, 2008, Oppenheimer (and a number of its affiliates) was named as a defendant in a proposed class action complaint captionedBette M. Grossman ~~vs.~~v. Oppenheimer & Co. Inc. et. al. in the United States District Court for the Southern District of New York. The complaint alleges, among other things, that Oppenheimer violated Section ~~10 (b)~~10(b) of the Securities Exchange Act of 1934 (as well as other provisions of the Federal securities laws) by making material misstatements and omissions and engaging in deceptive activities in the offer and sale of ARS. Oppenheimer filed an answer to the complaint denying the allegations. Oppenheimer believes it has meritorious defenses to the claims raised in the lawsuit and intends to defend against these claims vigorously. On February 20, 2009, this action was consolidated with theVining action described below.

On May 12, 2008, Oppenheimer (and a number of its affiliates) was named as a defendant in a proposed class action complaint captionedDavid T. Vining ~~vs.~~v. Oppenheimer & Co. Inc. et. al. in the United States District Court for the Southern District of New York. The complaint alleges, among other things, that Oppenheimer violated Section ~~10 (b)~~10(b) of the Securities Exchange Act of 1934 (as well as other provisions of the Federal securities laws) by making material misstatements and omissions and engaging in deceptive activities in the offer and sale of ARS. Oppenheimer filed an

answer to the complaint denying the allegations. Oppenheimer believes it has meritorious defenses to the claims raised in the lawsuit and intends to defend against these claims vigorously. On February 20, 2009, the Grossman action discussed above was consolidated with this action. The action requests relief in the form of compen satory damages in an amount to be proven at trial as well as costs and expenses. Oppenheimer (and a number of its affiliates) have filed a motion to dismiss this consolidated action.

~~Oppenheimer has been responding to inquiries from the SEC, FINRA and several state regulators as part of an industry-wide review of the marketing and sale of ARS.~~ On November 18, 2008 the Massachusetts Securities Division (the “MSD”) filed an Administrative Complaint (the “Complaint”), captionedIn the Matter of Oppenheimer & Co. Inc., Albert Lowenthal, Robert Lowenthal and Greg White, Docket No. 2008-0080, alleging violations of the ~~Office of~~Massachusetts General Law, the ~~Secretary of the Commonwealth of~~ Massachusetts ~~filed an administrative complaint against Oppenheimer~~Uniform Securities Act and ~~certain of its executives and employees alleging various causes of action~~regulations thereunder with respect to the sale by Oppenheimer of ARS to its clients. ~~See “Management’s Discussion~~The Complaint alleged, inter alia, that Oppenheimer improperly misrepresented the nature of ARS and ~~Analysis~~the overall stability and health of ~~Financial Condition~~the ARS market. The Complaint also alleged that the individual respondents improperly sold their personal ARS holdings. Oppenheimer and ~~Results~~all individual respondents filed an answer to the Complaint denying that the allegations in the Compliant had any basis in fact or law.

As previously disclosed, Oppenheimer entered into a Consent Order (the “Order”) pursuant to the Massachusetts Uniform Securities Act on February 26, 2010 settling the pending administrative proceeding against the respondents related to Oppenheimer’s sales of ~~Operations – Regulatory Environment – Other Regulatory Matters.”~~ARS to retail and other investors in the Commonwealth of Massachusetts. Oppenheimer and the individual respondents did not admit or deny any of the findings of fact or law or allegations contained in the Order and no fine was imposed against any of such parties. All claims against the individual respondents were dismissed. Oppenheimer agreed to pay the external costs incurred by the MSD related to the investigation and the administrative proceeding in an amount totaling $250,000.

Pursuant to the terms of the Order, Oppenheimer will offer to purchase $25,000 of Eligible ARS (as defined in the Order) from Customer Accounts (as defined in the Order) no later than May 29, 2010. No later than August 28, 2010, Oppenheimer will establish a Fund for Redemption (the “Fund”) capitalized with $2.25 million and use the Fund for the benefit of eligible Massachusetts Customer Accounts (as defined in the Order) to offer to purchase all Eligible ARS from Eligible Customer Accounts. No later than February 29, 2011, Oppenheimer will deposit into the Fund an additional $1.40 million to be used, for the benefit of eligible Massachusetts Customer Accounts, to offer to purchase all Eligible ARS from all Massachusetts Customer Accounts. Oppenheimer’s offers will remain open for a period of seventy-five days from the date on which any offer to purchase is sent.

In addition, Oppenheimer has agreed to work with issuers and other interested parties, including regulatory and other authorities and industry participants, to provide liquidity solutions for other Massachusetts clients not covered by the offers. In that regard, Oppenheimer has agreed to offer, no later than May 29, 2010, such clients a margin loan against marginable collateral with respect to such account holders’ holdings of Eligible ARS. Oppenheimer has also agreed to use any excess in the Fund to redeem ARS from Massachusetts clients not covered by the Fund on a pro-rata basis.

Oppenheimer estimates that it is obligated to purchase up to approximately $4.5 million of Eligible ARS in the initial 15 month period covered by the Order.

If Oppenheimer fails to comply with any of the terms set forth in the Order, the MSD may institute an action to have the Order declared null and void and reinstitute the previously pending administrative proceedings.

Reference is made to the Order between the MSD and Oppenheimer et al., attached to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 as Exhibit 10.24, for additional details of the agreement with the MSD.

As previously disclosed, on February 23, 2010, the NYAG accepted Oppenheimer’s offer of settlement and entered an Assurance of Discontinuance (“AOD”) pursuant to New York State Executive Law Section 63(15) in connection with Oppenheimer’s marketing and sale of ARS. Oppenheimer did not admit or deny any of the findings or allegations contained in the AOD and no fine was imposed.

Pursuant to the terms of the AOD, Oppenheimer will offer to purchase at par plus accrued but unpaid dividends and interest to the day of purchase one (1) unit ($25,000) of Eligible ARS (as defined in the AOD) from Eligible Investors (as defined in the AOD) who currently hold accounts at Oppenheimer no later than May 24, 2010 (the “Initial Purchase Offer”). Eligible Investors’ accounts will be aggregated on a “household” basis. Starting on or about August 23, 2010, and continuing every six months thereafter until Oppenheimer has extended a purchase offer to all Eligible Investors, Oppenheimer will offer to purchase Eligible ARS from Eligible Investors who did not receive an Initial Purchase Offer, as excess funds become available to Oppenheimer after giving effect to the financial and regulatory capital constraints applicable to Oppenheimer (the “Additional Purchase Offers”). & nbsp;Oppenheimer’s Initial Purchase Offer and Additional Purchase Offers will remain open for a period of seventy-five days from the date on which the offer to purchase is sent.

In addition, Oppenheimer has agreed to (1) no later than 75 days after Oppenheimer has completed extending a Purchase Offer to all Eligible Investors, use its best efforts to identify any Eligible Investors who purchased Eligible ARS and subsequently sold those securities below par between February 13, 2008 and February 23, 2010 and pay the investor the difference between par and the price at which the Eligible Investor sold the Eligible ARS, plus reasonable interest thereon (the “ARS Losses”); (2) no later than 75 days after Oppenheimer has completed extending a Purchase Offer to all Eligible Investors, use its best efforts to identify Eligible Investors who took out loans from Oppenheimer after February 13, 2008 that were secured by Eligible ARS that were not successfully auctioning at the time the loan was taken out from Oppenheimer and who paid interest associated with the ARS-based portion of those loans in excess of the total interest and dividends received on the Eligible ARS during the duration of the loan (the “Loan Cost Excess”) and reimburse such investors for the Loan Cost Excess plus reasonable interest thereon; (3) upon providing liquidity to all Eligible Investors, participate in a special arbitration process for the exclusive purpose of arbitrating any Eligible Investor’s claim for consequential damages against Oppenheimer related to the investor’s inability to sell Eligible ARS; and (4) work with issuers and other interested parties, including regulatory and governmental entities, to expeditiously provide liquidity solutions for institutional investors not within the definition of Small Businesses and Institutions (as defined in the AOD) that held ARS in Oppenheimer brokerage accounts on February 13, 2008. Oppenheimer believes that because items (1) through (3) above will occur only after it has provided liquidity to all Eligible Investors, it will take an extended period of time befor e the requirements of items (1) through (3) will take effect.

Each of the AOD and the Order provides that in the event that Oppenheimer enters into another agreement that provides any form of benefit to any Oppenheimer ARS customer on terms more favorable than those set forth in the AOD or the Order, Oppenheimer will immediately extend the more favorable terms contained in such other agreement to all eligible investors. In the case of the Order, it is limited to more favorable agreements entered into subsequent to the February 26, 2010 Order while in the case of the AOD, it covers more favorable agreements entered into prior and subsequent to the February 23, 2010 AOD. The AOD further provides that if Oppenheimer pays (or makes any pledge or commitment to pay) to any governmental entity or regulator pursuant to any other agreement costs or a fine or penalty or any other monetary amount, then an equivalent payment, pledge or commitment will become immediately owed to the State of New York for the benefit of New York residents.

As a result of these provisions, Oppenheimer may be required to establish a fund similar to the Fund capitalized with at least $3.65 million for the benefit of Eligible Investors to purchase Eligible ARS. In addition, as a result of these provisions, Oppenheimer may be required to pay the external costs incurred by the NYAG, if any, related to the investigation in an amount not to exceed $250,000. These provisions will not affect the terms of the Order with MSD.

Oppenheimer estimates that it is obligated to purchase up to approximately $34.5 million of Eligible ARS in the initial 15 month period covered by the AOD. The potential amount of future payments that may be required to be made in connection with the aggregate Loan Cost Excess and the aggregate ARS Losses is currently unknown.

If Oppenheimer defaults on any obligation under the AOD, the NYAG may terminate the AOD, at his sole discretion, upon 10 days written notice to Oppenheimer.

Reference is made to the AOD between the NYAG and Oppenheimer, attached to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 as Exhibit 10.22, for additional details of the agreement with the NYAG.

The Company estimates that it is obligated to purchase an aggregate of approximately $39 million of eligible ARS in the initial 15 month period covered by the settlements with the Regulators. The Company is continuing to cooperate with investigating entities from other states.

Oppenheimer offered ARS to its clients in the same manner as dozens of other “downstream” firms in the ARS marketplace --- as an available cash management option for clients seeking to increase their yields on short-term investments similar to a money market fund. The Company believes that Oppenheimer’s participation therefore differs dramatically from that of the larger broker-dealers who ~~have recently~~underwrote and provided supporting bids in the auctions and who subsequently entered into settlements with state and federal regulators, agreeing to purchase billions of dollars of their clients’ ARS holdings. Unlike these other broker-dealers, Oppenheimer did not act as the lead or sole lead managing underwriter or dealer in any ARS auctions during the relevant time period, did not enter support bids to ensure that any ARS auctions cleared, and played no role in any decision by the lead underwriters oro r broker-dealers to discontinue entering support bids and ~~allo wing~~allowing auctions to fail.

In February 2009, Oppenheimer received notification of a filing of an arbitration claim before FINRA captionedU.S. Airways v. Oppenheimer & Co. Inc., et al. seeking an award compelling Oppenheimer to ~~repurchase~~purchase approximately $250 million in ARS previously purchased by U.S.

Airways through Oppenheimer or, alternatively, an award rescinding such sale. Plaintiffs’ seek an award of punitive damages from Oppenheimer as well as interest on such award. Plaintiff bases its claims on numerous causes of action including, but not limited to, fraud, gross negligence, misrepresentation and suitability. U.S. Airways is a publicly-traded corporation that bought and sold ARS for many years through several broker dealers, not just Oppenheimer. It is also a “Qualified Institutional Buyer” (as defined in Rule 144A of the Securities Exchange Act of 1934) and purchased ARS for cash management purposes. On July 10, 2009, Oppenheimer asserted a third party statement of claim against Deutsche Bank Securities, Inc. and Deutsche Bank A.G. (the “Deutsche Entities”). At the same time, Oppenheimer filed its answer denying any liability to U .S. Airways. The Deutsche Entities subsequently filed a motion to sever the arbitration into a separate proceeding. To the extent there is a determination by an arbitration panel that U.S. Airways has been harmed, Oppenheimer’s third party statement of claim against the Deutsche Entities alleges that the Deutsche Entities are liable to U.S. Airways because of their role in the process of creating, marketing and procuring ratings for certain auction rate credit-linked notes. The arbitration is scheduled to commence in May 2011. Oppenheimer believes that subsequent to the filing of the U.S. Air action, U.S. Air sold a portion of its holdings in ARS which would ratably reduce its claim against the Company. Oppenheimer intends to vigorously defend itself against the allegations in theU.S. Airways action.

In April 2009, Oppenheimer was served with a complaint in the United States District Court, Eastern District of Kentucky captionedAshland, Inc. and Ash Three, LLC v. Oppenheimer & Co. Inc. seeking compensatory and consequential damages as a result of plaintiff’s purchase of approximately $194 million in ARS. ~~In each of these cases, plaintiffs’ seek~~Plaintiffs’ sought an award of punitive damages from Oppenheimer as well as interest on such award. ~~Each plaintiff in these cases bases~~Plaintiff based its claim on numerous causes of action including, ~~bu t~~but not limited to, fraud, gross negligence, misrepresentation and suitability. ~~Oppenheimer intends to vigorously defend against any such claims. Each of U.S. Airways and~~ Ashland is a publicly-traded corporation that bought and sold ARS for many years through several broker dealers, not just Oppenheimer. ~~Each~~It is also a ~~“Qualified~~ “Qualified Institutional Buyer” (as defined in Rule 144A of the Securities Exchange Act of 1934) and purchased ARS for cash management purposes.

~~On July 10, 2009, in~~ The Cou rt granted Oppenheimer’s motion to dismiss this action with prejudice on February 22, 2010. Plaintiff filed an appeal of this dismissal with the ~~arbitration noted above captioned~~~~U.S. Airways v. Oppenheimer & Co. Inc. et. al~~~~. Oppenheimer asserted a Third Party Statement of Claim against Deutsche Bank Securities, Inc. and Deutsche Bank A.G. (the “Deutsche Entities”). At~~United States Circuit Court for the same time Oppenheimer filed its Answer denying any liability to U.S. Airways. To the extent there is a determination by an arbitration panel that U.S. Airways has been harmed, Oppenheimer’s Third Party Statement of Claim against the Deutsche Entities alleges that the Deutsche Entities are liable to U.S. Airways because of their role in the process of creating, marketing and procuring ratings for certain auction rate credit-link notes.

In February 2009, the Company was served with an arbitration claim before FINRA captionedHansen Beverage Company v. Oppenheimer & Co. Inc., et al (“Respondents”). Hansen demands that its investments in approximately $60 million in ARS, which are currently illiquid and which

Hansen purchased from Oppenheimer, be rescinded. The ~~Statement of Claim~~claim alleges that Oppenheimer misrepresented liquidity and market risks in the ARS market when recommending ARS to Hansen. The Company has filed its response to the ~~Statement of Claim~~claim and also filed ~~Motions~~a motion to ~~Dismiss Respondents~~dismiss respondents Oppenheimer Holdings and Oppenheimer Asset Management as parties improperly named in the arbitration. ~~Further, as~~The arbitration has been scheduled to commence in August 2010. As of this date, approximately ~~$16~~$33.7 million of the $60 million Hansen held in ARS have been redeemed at par by their issuers. Hansen is ~~also~~ a “Qualified ~~Institutional~~Institution al Buyer” (as defined in Rule 144A of the Securities Exchange Act of 1934) and purchased ARS for cash management purposes. Oppenheimer intends to vigorously defend itself against the allegations in theHansen action.

In August 2009, Oppenheimer received notification of the filing of an arbitration claim before FINRA captionedInvestec Trustee (Jersey) Limited as Trustee for The St. Paul’s Trust v. Oppenheimer & Co. Inc. et al. seeking an award ordering Oppenheimer’s repurchase of approximately $80 million in ARS previously purchased by Investec as Trustee for the St. Paul’s Trust, and seeking additional damages of $7.5 million as a result of claimant’s liquidation of certain

ARS positions in a private securities transaction. At the same time Oppenheimer filed its answer denying any liability to the claimant, and Oppenheimer asserted a counter-claim against Investec as Trustee for the Trust, alleging that Investec, and not Oppenheimer or its representatives, owed a fiduciary duty to the St. Paul’s Trust and violated that duty. Also, at the same time Oppenheimer filed its answer, Oppenheimer asserted third party claims against the underwriters of the ARS still held by claimant. Oppenheimer urged in its third party claim that those underwriters are liable to claimant because of their role in the processing, trading, marketing and supporting of the ARS still held by claimant, and for other actions by the underwriters which lead to the interruption in the ARS market. The underwriters in this action filed a motion to sever the arbitration into a separate proceeding. Oppenheimer intends to vigorously defend itself against these allegations.

Between April 2008 and ~~May 2009,~~March 31, 2010, Oppenheimer ~~& Co. Inc.~~ and certain affiliated parties have been served with approximately 1021 arbitration claims before FINRA, by individuals and entities who purchased ARS through Oppenheimer in amounts ranging from $25,000 to $25 million, seeking awards compelling Oppenheimer to repurchase such ARS or, alternatively, awards rescinding such sales, based on a variety of causes of action similar to those described above. The Company has filed, or is in the process of filing, its responses to such claims and is awaiting hearings regarding such claims before FINRA. Oppenheimer believes it has meritorious defenses to these claims and intends to vigorously defend against these claims. Oppenheimer may also implead third parties, including underwriters, where it believes such action is appropriate. It is possible that other individuals or entities ~~who~~that purchased ARS from Oppenheimer may ~~bring~~brin g additional claims against Oppenheimer in the future for repurchase or ~~recission.~~rescission.

In the only such client arbitration to be heard to date, the arbitration panel dismissed the claim against the Company. This decision will have no bearing on future hearings pleading similar but differing facts.

See the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 under “Risk Factors – The Company may be adversely affected by the failure of the Auction Rate Securities Market,” herein under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Regulatory Environment – Other Regulatory Matters,” and note 13 to the consolidated financial statements appearing in Item 8 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

In addition to the ARS cases discussed above, on or about March 13, 2008, Oppenheimer was served in a matter pending in the United States Bankruptcy Court, Northern District of Georgia, captionedWilliam Perkins, Trustee for International Management Associates v. Lehman Brothers, Oppenheimer & Co. Inc., JB Oxford & Co., Bank of America Securities LLC and TD Ameritrade Inc. The Trustee seeks to set aside as fraudulent transfers in excess of $25 million in funds embezzled by the sole portfolio manager for International Management Associates, a hedge fund. Mr. Wright purportedly used the broker/dealer defendants, including Oppenheimer, as conduits for his embezzlement. Oppenheimer believes it has meritorious defenses to the claims raised and intends to defend against these claims vigorously.

In April 2009, Oppenheimer received notification of the filing of an arbitration claim before FINRA captionedGroff et. al v. Oppenheimer in which the grantors and beneficiaries of the Groff Family Trust filed a claim alleging that, beginning in January 2005, Oppenheimer made

recommendations that were unsuitable. The claim alleges damages in excess of $16 million and alleges as causes of action the following: breach of fiduciary duty, constructive fraud, fraud by misrepresentation and omission, unauthorized withdrawals of assets, breach of written contract and failure to supervise as well as elder abuse and violation of state and federal securities laws and the FINRA Rules of Fair Practice. The arbitration is scheduled to commence in September 2010. Oppenheimer believes it has meritorious defenses to the claims raised and intends to vigorously defend itself against these claims.

In March 2010, the Company received a notice from counsel representing a receiver appointed by a state district court in Oklahoma (the “Receiver”) to oversee a liquidation proceeding of Providence Property and Casualty Company (“Providence”), an Oklahoma insurance company. That notice demanded the return of Providence’s municipal bond portfolio of approximately $55 million that had been custodied at Oppenheimer beginning in January 2009. In January 2009, the municipal bond portfolio had been transferred to an insurance holding company, Park Avenue Insurance LLC (“Park Avenue”), as part of a purchase and sale transaction. Park Avenue used the portfolio as collateral for a margin loan used to fund the purchase of Providence from Providence’s parent. The Receiver alleges, among other things, that the transfer of the bond portfolio to Park Avenue is a revocable transact ion and that the Receiver can, and intends to avoid, or set aside, this transaction. Oppenheimer believes it acted in good faith and on appropriate instructions at all times in this matter. However, at this time, there can be no guarantee that Oppenheimer will not become subject to an action by the Receiver seeking a return of the value of the Providence Municipal bond portfolio from Oppenheimer

During the three months ended ~~June 30, 2009,~~March 31, 2010, there were no material changes to the information contained in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2008,~~2009, except as described in Part I, Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations – under the caption “Business Environment”.

During the three months ended June 30, 2009, the Company did not repurchase any Class A Shares pursuant to its Normal Course Issuer Bid. On May 27, 2009, the Company announced its intention to purchase up to 600,000 of its Class A non-voting common shares commencing June 2, 2009 and ending December 31, 2009. The Company will undertake repurchases only if market conditions warrant such repurchases.

~~The Company held its annual and special meeting of shareholders on May 8, 2009. The following discloses the voting results:~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned ~~hereunto~~thereunto duly authorized, in the City of New York, New York on this 6^th7thday of ~~August, 2009.~~May, 2010.

		Page No.
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of ~~June 30, 2009~~March 31, 2010 and December 31, ~~2008~~2009	1

	Condensed Consolidated Statements of Operations for the three ~~and six~~ months ended ~~June 30,~~March 31, 2010 and 2009 ~~and 2008~~	3

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three ~~and six~~ months ended ~~June 30,~~March 31, 2010 and 2009 ~~and 2008~~	4

	Condensed Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~June 30,~~March 31, 2010 and 2009 ~~and 2008~~	5

	Condensed Consolidated Statements of Changes in ~~Shareholders’~~ Equity for the ~~six~~three months ended ~~June 30,~~March 31, 2010 and 2009 ~~and 2008~~	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3332

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4543

Item 4.	Controls and Procedures	4543

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	4745
Item 1A.	Risk Factors	49
~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	49
~~Item 3.~~	~~Defaults Upon Senior Securities~~	49
~~Item 4.~~	~~Submission of Matters to a Vote of Security Holders~~	50
~~Item 5.~~	~~Other Information~~	5051
Item 6.	Exhibits	51
	SIGNATURES	52
	Certifications	53
	~~Exhibits~~


	June 30, 2009	December 31, 2008
Payable to brokers and clearing organizations consist of:
Deposits received for securities loaned	$409,368	$114,919
Securities failed to receive	27,437	31,502
Clearing organizations and other	217	13,227
	$437,022	$159,648

	March 31, 2010	December 31, 2009
Payable to brokers and clearing organizations consist of:
Deposits received for securities loaned	$400,306	$412,420
Securities failed to receive	29,191	21,728
Clearing organizations and other	29,820	1,870
	$459,317	$436,018

	Fair Value	Unfunded Commit-ments	Redemption Frequency	Redemption Notice Period
Hedge Funds⁽¹⁾	$1,277,509	$ -	Quarterly - Annually	30 - 120 Days
Private Equity Funds⁽²⁾	2,306,969	4,059,856	N/A	N/A
Distressed Opportunities Fund⁽³⁾	11,877,678	-	Semi-Annually	180 Days

Total	$15,462,156	$4,059,856

	Level 3 Assets and Liabilities
	For the three months ended June 30, 2008
	Opening Balance	Realized Gains (Losses) (4)	Unrealized Gains (Losses)(4)	Purchases, Sales, Issuances, Settlements	Transfers In / Out	Ending Balance
Assets:
Corporate debt and other obligations	$122	-	-	(122)	-	$-
Mortgage and other asset-backed securities (1)	1,971	8	(294)	93	(680)	1,098
Other (2)	5,622	-	-	(250)	(22)	5,350
Investments (3)	2,067	-	-	139	-	2,206

Liabilities:
Other (2)	$(650)	-	-	275	-	$(375)

(1) Primarily represents bonds issued by private pass through trusts backed by residential mortgage-backed securities.
(2) Represents auction rate preferred securities that failed in the auction rate market. Fair value approximates par due to strength in the underlying credits and the recent trend in issuer redemptions.
(3) Primarily represents general partner ownership interests in private equity funds sponsored by the Company.
(4) Included in principal transactions, net on the condensed consolidated statement of operations, except for investments which is included in other income on the condensed consolidated statement of operations.

For the three months ended March 31, 2009
Assets:
Convertible bonds	$ 815	-	-	(691)	(124)	$ -
Mortgage and other asset-backed securities (1)	1,610	(19)	(86)	1,033	(41)	2,497
Other (2)	5,325	-	-	-	-	5,325
Investments (3)	12,085	-	(144)	90	-	12,031

Liabilities:
Other (2)	$ (375)	-	-	-	-	$ (375)
Derivative contracts (4)	(2,516)	-	47	-	2,424	(45)

	Level 3 Assets and Liabilities
	For the six months ended June 30, 2009
	Opening Balance	Realized Gains (Losses)(5)	Unrealized Gains (Losses)(5)	Purchases, Sales, Issuances, Settlements	Transfers In / Out	Ending Balance
Assets:
Convertible bonds	$815	(124)	-	(691)	-	$-
Mortgage and other asset-backed securities (1)	1,610	(34)	(1)	592	(48)	2,119
Other(2)	5,325	-	-	-	-	5,325
Investments (3)	12,087	-	1,357	338	-	13,782

Liabilities:
Mortgage and other asset-backed securities (1)	$-	-	(5)	(205)	-	$(210)
Other (2)	(375)	-	-	50	-	(325)
Derivative contracts (4)	(2,516)	-	-	2,516	-	-

	Level 3 Assets and Liabilities
	For the six months ended June 30, 2008
	Opening Balance	Realized Gains (Losses) (4)	Unrealized Gains (Losses)(4)	Purchases, Sales, Issuances, Settlements	Transfers In / Out	Ending Balance
Assets:
Mortgage and other asset-backed securities (1)	$881	8	(347)	628	(72)	$1,098
Other (2)	-	-	-	5,372	(22)	5,350
Investments (3)	1,820	42	-	344	-	2,206

Liabilities:
Other (2)	$-	-	-	275	(650)	$(375)

(1) Primarily represents bonds issued by private pass through trusts backed by residential mortgage-backed securities.
(2) Represents auction rate preferred securities that failed in the auction rate market. Fair value approximates par due to strength in the underlying credits and the recent trend in issuer redemptions.
(3) Primarily represents general partner ownership interests in private equity funds sponsored by the Company.
(4) Included in principal transactions, net on the condensed consolidated statement of operations, except for investments which is included in other income on the condensed consolidated statement of operations.

Fair Value of Derivative Instruments
As of March 31, 2010
	Description	Notional	Fair Value
Assets:
Derivatives designated as hedging instruments⁽¹⁾
Interest rate contracts⁽³⁾	Cap	$ 100,000	$ 1,319

Derivatives not designated as hedging instruments⁽¹⁾
Other contracts⁽³⁾	TBAs	$ 465,338	$ 5,383

Total Assets		$ 565,338	$ 6,702

	Fair Value of Derivative Instruments
	As of June 30, 2009
	Type	Balance Sheet Location	Notional	Fair Value
Assets:
Derivatives designated as hedging instruments under SFAS 133:
Interest rate contracts	Caps	Receivable from brokers and clearing organizations	$100,000	$3,291
Derivatives not designated as hedging instruments under SFAS 133:
Foreign exchange contracts	Options	Other assets	$400	$-
Total assets			$100,400	$3,291

		Recognized in Income on Derivatives (pre-tax)		Recognized in Other Comprehen-sive Income on Derivatives -Effective Portion (after–tax)	Reclassified from Accumulated Other Comprehensive Income into Income -Effective Portion⁽²⁾ (pre–tax)
Hedging Relationship	Description	Location	Gain/ (Loss)	Gain/ (Loss)	Location	Gain/ (Loss)
*Cash Flow Hedges*:
Interest rate contracts	Swaps⁽³⁾	N/A	$ -	$ 257	Interest Expense	$ (467)
	Caps	N/A	-	(624)	Other	(63)

*Derivatives used for trading and investment:*
Commodity contracts	U.S Treasury Futures	Principal transaction revenue	(347)	-	None	-
	Federal Funds Futures	Principal transaction revenue	(63)
	Euro-dollar Futures	Principal transaction revenue	(21)
Foreign exchange contracts	Forwards	Other revenue	-	-	None	-
Other contracts	TBAs	Principal transaction revenue	6,702	-	None	-
	Forward purchase commitment⁽⁴⁾	Principal transaction revenue	258	-	None	-

*Credit-Risk Related Contingent Features:*
Warehouse facility	Excess retention⁽¹⁾	Principal transaction revenue	-	-	None	-
Total			$ 6,529	$ (367)		$ (530)

		Recognized in Income on Derivatives		Recognized in OCI on Derivatives (Effective Portion)	Reclassified from Accumulated OCI into Income (Effective Portion)⁽²⁾
SFAS 133 Hedging Relationship:	Type	Location	Gain/ (Loss)	Gain/ (Loss)	Location	Gain/ (Loss)
Cash Flow Hedges:
Interest rate contracts	Swaps	N/A	$ -	$ 170	Interest Expense	$ (385) -
	Caps	N/A	-	932	None	-

Derivatives used for trading and investment:
Commodity contracts	U.S Treasury Futures	Principal transaction revenue	2,339	-	None	-
Foreign exchange contracts	Forwards	Other revenue	(32)	-	None	-
	Options	Other revenue	-	-	None	-
Other contracts	TBA's	Principal transaction revenue	-	-	None	-

Credit-Risk Related Contingent Features:
Warehouse facility	Excess retention⁽¹⁾	Principal transaction revenue	-	-	None	-
Total			$ 2,307	$ 1,102		$ (385)

As of March 31, 2010
Expressed in thousands of dollars.
	Total VIE Assets (1)	Carrying Value of the Company's Variable Interest Assets (2) Liabilities		Capital Commitments	Maximum Exposure to Loss in Non-consolidated VIEs

Hedge Funds	$1,592,497	$1,034	$ -	$ -	$1,034
Private Equity Funds	123,701	33	-	5	38
Total	$1,716,198	$1,067	$ -	$5	$1,072

(1) Represents the total assets of the VIEs and does not represent the Company’s interests in the VIEs.
(2) Represents the Company’s interests in the VIEs and is included in other assets on the consolidated balance sheet.

	As of December 31, 2009
	Expressed in thousands of dollars.
		Total VIE Assets	Carrying Value of the Company's Variable Interest Assets (1) Liabilities		Capital Commitments	Maximum Exposure to Loss in Non-consolidated VIEs

Hedge Funds		$1,564,486	$830	$-	$-	$830
Private Equity Funds		123,701	34	-	5	39
Total		$1,688,187	$864	$-	$5	$869

(1) Included in other assets on the consolidated balance sheet.

	Three months ended June 30, 2008		Six months ended June 30, 2008
	As reported	Reclassified	As reported	Reclassified
Expressed in thousands of dollars
REVENUE:
Commissions	$119,390	$126,530	$243,938	$257,838
Investment banking	$43,488	$36,348	$66,451	$52,551

	Three months ended March 31,
	2010 versus 2009
	Period to Period Change	Percentage Change

Revenue -
Commissions	$14,401	11.6%
Principal transactions, net	(8,066)	-32.6%
Interest	6,247	83.0%
Investment banking	16,592	193.1%
Advisory fees	7,030	19.7%
Other	5,393	111.2%
Total revenue	41,597	20.3%

Expenses -
Compensation and related expenses	17,517	12.5%
Clearing and exchanges fees	824	14.4%
Communications and technology	(3,311)	-16.8%
Occupancy and equipment costs	227	1.2%
Interest	445	8.0%
Other	7,213	39.7%
Total expenses	22,915	11.0%
Profit before income taxes	18,682	n/a
Income tax provision	7,304	n/a
Net profit	11,378	n/a
Net profit attributable to non-
controlling interest, net of tax	196	n/a
Net profit attributable to
Oppenheimer Holdings Inc.	$11,182	n/a

	Three months ended June 30,		Six months ended June 30,
	2009 versus 2008		2009 versus 2008
	Period to Period Change	Percentage Change	Period to Period Change	Percentage Change

Revenue -
Commissions	$16,183	13%	$8,671	3%
Principal transactions, net	$10,973	57%	$25,835	89%
Interest	($8,458)	-49%	($18,956)	-54%
Investment banking	($14,439)	-40%	($22,050)	-42%
Advisory fees	($15,969)	-31%	($35,309)	-33%
Other	$6,193	112%	$9,682	141%
Total revenue	($5,517)	-2%	($32,127)	-7%

Expenses -
Compensation and related expenses	($411)	0%	($32,145)	-9%
Clearing and exchanges fees	($1,738)	-21%	($3,769)	-23%
Communications and technology	($3,958)	-21%	($1,178)	-3%
Occupancy and equipment costs	$403	2%	$1,962	6%
Interest	($6,485)	-56%	($13,084)	-55%
Other	($4,119)	-14%	($18,671)	-30%
Total expenses	($16,308)	-6%	($66,885)	-13%
Profit (loss) before income taxes	$10,791	494%	$34,758	-141%
Income tax provision (benefit)	$5,307	985%	$15,173	-150%
Net profit (loss)	$5,484	333%	$19,585	-135%

	Total	Less than 1 Year	1-3 Years	3-5 Years	More than 5 Years
Minimum rentals	$152	$31	$67	$31	$23
Committed capital	4	4	-	-	-
Earn-out	25	-	25	-	-
Deferred compensation commitments (1)	30	30	-	-	-
Revolving commitment (2)	1	-	-	-	1
Senior Secured Credit Note	33	10	23	-	-
Subordinated Note	100	-	-	100	-
ARS purchase offers (3)	39	36	3	-	-
Total	$384	$111	$118	$131	$24

Description of the Matter	For	Against	Withheld
1. Election of Directors - Each of the following nine nominees was elected as a director of the Company to serve until the next annual meeting of shareholders by a vote of the holders of the Company’s Class B voting shares: J.L. Bitove, R. Crystal, W. Ehrhardt, M.A.M. Keehner, A.G. Lowenthal, K.W. McArthur, A.W. Oughtred, E.K. Roberts, and B. Winberg.	96,358	-	-
2. Appointment of Auditors- PricewaterhouseCoopers LLP was re-appointed as the Company’s independent registered accounting firm to hold office until the next annual meeting of shareholders and the Board of Directors and Audit Committee were authorized to fix the Auditors’ remuneration by a vote of the holders of the Company’s Class B voting shares.	96,358	-	-
3. Special resolution authorizing the Company to change its jurisdiction of incorporation – The authorization of the Company to make an application under Section 188 of the Canada Business Corporations Act to change its jurisdiction of incorporation from the federal jurisdiction of Canada to the State of Delaware, U.S.A., by way of a domestication under Section 388 of the General Corporation Law of the State of Delaware, and to approve the certificate of incorporation authorized in the special resolution to be effective as of the date of the Company’s domestication, was approved by a vote of the holders of the Company’s Class B voting shares and the holders of the Company’s Class A non-voting shares voting together as a class.	11,260,296	767,324	-

~~3.1~~	~~Certificate of Incorporation of Oppenheimer Holdings Inc., a Delaware corporation.~~
~~3.2~~	~~By-Laws of Oppenheimer Holdings Inc., a Delaware corporation~~
~~3.3~~	~~Certificate of Corporate Domestication of Oppenheimer Holdings Inc., a Canadian corporation, as filed with the Secretary of State of the State of Delaware on May 11, 2009.~~
~~3.4~~	~~Certificate of Discontinuance of Oppenheimer Holdings Inc., a Canadian corporation, as filed with Corporations Canada on May 11, 2009.~~
31.1	Certification of Albert G. Lowenthal
31.2	Certification of Elaine K. Roberts
32	Certification of Albert G. Lowenthal and Elaine K. Roberts