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Our results of operations may be materially affected by market fluctuations and by global and economic conditions and other factors, including changes in asset values.
−Removed: Our results of operations have been, in the past, and may, in the future, be materially affected by market fluctuations due to global financial markets, economic conditions, changes to global trade policies, tax legislation and tariffs and other factors, including the level and volatility of equity, fixed income and commodity prices, the level and term structure of interest rates, inflation and currency values, and the level of other market indices.
+Added: Our results of operations have been, in the past, and may, in the future, be materially affected by market fluctuations due to global financial markets, economic conditions, public health epidemics, changes to global trade policies, tax legislation and tariffs and other factors, including the level and volatility of equity, fixed income and commodity prices, the level and term structure of interest rates, inflation and currency values, and the level of other market indices.
The results of our Capital Markets business segment, particularly results relating to our involvement in primary and secondary markets for all types of financial products, are subject to substantial market fluctuations due to a variety of factors that we cannot control or predict with great certainty.
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Changes in interest rates (especially if such changes are rapid), sustained low or high interest rates or uncertainty regarding the future direction of interest rates, may create a less favorable environment for certain of the Company's businesses, particularly its fixed income business, resulting in reduced business volume and reduced revenue.
−Removed: Prior to the Federal Reserve increasing the federal funds rate by 425 basis points during 2022, the historical low interest rate environment substantially reduced the interest profits available to the Company through its margin lending and also reduced profit contributions from cash sweep products such as the FDIC-insured Bank Deposit program.
−Removed: If interest rates decrease from current levels and/or balances within our cash sweep products decrease, the Company's profitability will be negatively impacted.
+Added: Prior to the Federal Reserve increasing the federal funds rate during its 2022 and 2023 monetary tightening cycle, the historical low interest rate environment substantially reduced the interest profits available to the Company through its margin lending and also reduced profit contributions from cash sweep products such as the FDIC-insured Bank Deposit program.
+Added: If interest rates decrease in immediate future periods, which appears highly probable, and/or balances within our cash sweep products decrease, the Company's profitability will be negatively impacted.
Credit risk may expose the Company to losses caused by the inability of borrowers or other third parties to satisfy their obligations.
The Company is exposed to the risk that third parties that owe it money, securities or other assets will not perform their obligations.
−Removed: The Company is exposed to credit risk related to third parties such as trading counterparties, customers, clearing agents, exchanges, clearing houses, and other financial intermediaries as well as issuers whose securities we hold.
+Added: The Company is exposed to credit risk related to third parties such as trading counterparties, depository institutions, customers, clearing agents, exchanges, clearing houses, and other financial intermediaries as well as issuers whose securities we hold.
These parties may default on their obligations owed to the Company due to bankruptcy, lack of liquidity, operational failure or other reasons.
This default risk may arise, for example, from holding securities of third parties, executing securities trades that fail to settle at the required time due to non-delivery by the counterparty or systems failure by clearing agents, exchanges, clearing houses or other financial intermediaries, and extending credit to clients through bridge or margin loans or other arrangements.
+Added: A substantial majority of our cash is held with a large, global systemically important bank, often in balances that exceed the current FDIC insurance limits.
+Added: If the banks we hold our deposits with enter receivership or become insolvent, we may be prevented from accessing our cash and cash equivalents in excess of FDIC insured limits.
Significant failures by third parties to perform their obligations owed to the Company could adversely affect the Company's revenue and its ability to borrow in the credit markets.
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Although we regularly review our credit exposures, default risk may arise from events or circumstances that are difficult to detect or foresee.
−Removed: We also incur credit risk in our Private Client business segment lending to mainly individual investors related to margin loans collateralized by securities.
+Added: Furthermore, we also incur credit risk in our Private Client business segment lending to mainly individual investors related to margin loans collateralized by securities.
Defaults by another large financial institution could adversely affect financial markets generally.
The commercial soundness of many financial institutions may be closely interrelated as a result of credit, trading, clearing, or other relationships between these institutions.
+Added: During 2023, several large regional banks failed and their operations were assumed by other institutions.
+Added: During this period of uncertainty, markets were negatively impacted and clients, redeployed their cash deposits to institutions deemed to be “safer”.
As a result, concerns about, or a default or threatened default by, one institution could lead to significant market-wide liquidity and credit problems, losses, or defaults by other institutions.
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The development and use of digital currencies may create additional credit risks.
−Removed: Recent failures of enterprises central to the functioning of that market have created uncertainty as to the impact of this market on currency markets and the general economy.
+Added: Recent failures of enterprises central to the functioning of the digital currency market have created uncertainty as to the impact of this market on currency markets and the general economy.
Liquidity Risk
Liquidity risk refers to the risk that we will be unable to finance our operations due to a loss of access to the capital markets or difficulty in liquidating our assets.
−Removed: Liquidity risk also encompasses our ability (or perceived ability) to meet our financial obligations without experiencing significant business disruption or reputational damage that may threaten our viability as a going concern as well as the associated funding risks triggered by the market or idiosyncratic stress events that may negatively affect our liquidity and may impact our ability to raise new funding.
+Added: Liquidity risk also encompasses our ability (or perceived ability) to meet our financial
+Added: obligations without experiencing significant business disruption or reputational damage that may threaten our viability as a going concern as well as the associated funding risks triggered by the market or idiosyncratic stress events that may negatively affect our liquidity and may impact our ability to raise new funding.
Liquidity is essential to our businesses and we rely on external sources to finance a significant portion of our operations.
Our liquidity could be negatively affected by our inability to raise funding in the long-term or short-term debt capital markets, our inability to access the secured lending markets, or unanticipated outflows of cash or collateral by customers or clients.
−Removed: Factors that we cannot control, such as disruption of the financial markets or negative views about the financial services
−Removed: industry generally, including concerns regarding fiscal matters in the U.S.
+Added: Factors that we cannot control, such as disruption of the financial markets or negative views about the financial services industry generally, including concerns regarding fiscal matters in the U.S.
and other geographic areas, could impair our ability to raise funding.
−Removed: In addition, our ability to raise funding could be impaired if investors or lenders develop a negative perception of our long-term or short-term financial prospects due to factors such as an incurrence of large trading losses, a downgrade by
−Removed: the rating agencies, or a decline in the level of our business activity, if regulatory authorities take significant action against us or our industry, or we discover significant employee misconduct or illegal activity.
−Removed: If we are unable to raise funding using the methods described above, we would likely need to finance or liquidate unencumbered assets, such as our investment portfolios or trading assets, to meet maturing liabilities or other obligations.
+Added: In addition, our ability to raise funding could be impaired if investors or lenders develop a negative perception of our long-term or short-term financial prospects due to factors such as an incurrence of large trading or operational losses, a downgrade by the rating agencies, or a decline in the level of our business activity, if regulatory authorities take significant action against us or our industry, or we discover significant employee misconduct or illegal activity.
+Added: If we are unable to raise funding using the methods described above, we would likely need to finance or liquidate unencumbered assets, such as our investment portfolios, trading assets or corporate-owned life insurance policies, to meet maturing liabilities or other obligations.
We may be unable to sell some of our assets or we may have to sell assets at a discount to market value, either of which could adversely affect our results of operations, cash flows and financial condition.
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The rating agencies continue to monitor certain company-specific and industry-wide factors that are important to the determination of our credit ratings.
−Removed: These include governance, the level and quality of earnings, capital adequacy, liquidity and funding, risk appetite and management, asset quality, strategic direction, business mix, regulatory or legislative changes, macroeconomic environment, and perceived levels of support.
+Added: These include governance, the level and quality of earnings, capital adequacy, liquidity and funding, risk appetite and management, asset quality, strategic direction, business mix, regulatory and legislative changes, macroeconomic environment, and perceived levels of support.
It is possible that the rating agencies could downgrade our ratings and those of similar institutions.
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The Company's failure to repay its indebtedness and make interest payments as required by our debt obligations could have a material adverse effect on our results of operations and financial condition, including the acceleration of the payment of debt.
−Removed: Financial markets are susceptible to severe events such as dislocations which may lead to reduced liquidity.
−Removed: Under these extreme conditions, the Company's risk management strategies may not be as effective as they might otherwise be under normal market conditions.
Operational Risk
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Our businesses are highly dependent on our ability to process and report, on a daily basis, a large number of transactions across numerous markets.
−Removed: We may introduce new products or services or change processes or reporting, including in connection with new regulatory requirements, resulting in new operational risk that we may not fully appreciate or identify.
+Added: We may introduce new products or services or change processes or reporting, including in connection with new regulatory requirements, resulting in new operational risks that we may not fully appreciate or identify, including the requirement to implement shortened settlement cycles.
The trend toward direct access to automated, electronic markets and the move to more automated trading platforms has resulted in the use of increasingly complex technology that relies on the continued effectiveness of the programming code and integrity of the data to process the trades.
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The adoption of shortened settlement cycles in the execution and settlement of securities transactions places increased burdens on participants including the adoption of new processes and procedures to facilitate such settlement.
−Removed: A failure to successfully adopt such procedures and technology within the mandated adoption period could negatively impact our business, our clients and our reputation.
+Added: A failure to successfully
+Added: adopt such procedures and technology within the mandated adoption period could negatively impact our business, our clients and our reputation.
We also face the risk of operational failure or disruption of any of the clearing agents, exchanges, clearing houses or other financial intermediaries we use to facilitate our lending and securities transactions.
In the event of a breakdown or improper operation of our or a direct or indirect third party’s systems (or third parties thereof) or processes or improper or unauthorized action by third parties, including consultants and subcontractors or our employees, we could suffer financial loss, an impairment to our liquidity position, a disruption of our businesses, regulatory sanctions or damage to our reputation.
−Removed: In addition, the
−Removed: interconnectivity of multiple financial institutions with central agents, exchanges and clearing houses, and the increased importance of these entities, increases the risk that an operational failure at one institution or entity may cause an industry-wide operational failure that could materially impact our ability to conduct business.
+Added: In addition, the interconnectivity of multiple financial institutions with central agents, exchanges and clearing houses, and the increased importance of these entities, increases the risk that an operational failure at one institution or entity may cause an industry-wide operational failure that could materially impact our ability to conduct business.
Furthermore, the concentration of Company and personal information held by a handful of third parties increases the risk that a breach at a key third party may cause an industry-wide data breach that could significantly increase the cost and risk of conducting business.
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catastrophic events;
−Removed: climate-related incidents and natural disasters (such as earthquakes, tornadoes,
−Removed: hurricanes and wildfires);
+Added: climate-related incidents and natural disasters (such as earthquakes, tornadoes, hurricanes and wildfires);
electrical outages;
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and (iii) retain skilled information technology employees.
−Removed: Failure of our technology systems, which could result from events beyond our control, or an inability to effectively upgrade those systems or implement new technology-driven products or services, could result in financial losses, liability to clients, and violations of applicable privacy and other applicable laws and regulatory sanctions.
−Removed: Cybersecurity - Security breaches of our technology systems, or those of our clients or other third-party vendors we rely on, may expose us to significant liability and harm our reputation.
+Added: Failure of our technology systems, which could result from events beyond our control, or an inability to effectively
+Added: upgrade those systems or implement new technology-driven products or services, could result in financial losses, liability to clients, and violations of applicable privacy and other applicable laws and regulatory sanctions.
+Added: Security breaches of our technology systems, or those of our clients or other third-party vendors we rely on, may expose us to significant liability and harm our reputation.
The expectations of sound operational and informational security practices have risen among our clients and vendors, the public at large and regulators.
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Our operations rely on the secure processing, storage and transmission of confidential and other information in our computer systems and networks.
−Removed: Although cybersecurity incidents among financial
−Removed: services firms are on the rise, we have not experienced any material losses relating to cyber-attacks or other information security breaches.
+Added: Although cybersecurity incidents among financial services firms are on the rise, we have not experienced any material losses relating to cyber-attacks or other information security breaches.
However, there can be no assurance that we will not suffer such losses in the future.
Despite our implementation of protective measures and endeavoring to modify them as circumstances warrant, our computer systems, software and networks may be vulnerable to human error, natural disasters, power loss, spam attacks, unauthorized access, distributed denial of service attacks, computer viruses and other malicious code and other events that could have an impact on the security and stability of our operations.
−Removed: Notwithstanding the precautions we take, if one or more of these events were to occur, this could jeopardize the information we confidentially maintain, including that of our clients and counterparties,
−Removed: which is processed, stored in and transmitted through our computer systems and networks, or otherwise cause interruptions or malfunctions in our operations or the operations of our clients and counterparties.
+Added: Notwithstanding the precautions we take, if one or more of these events were to occur, this could jeopardize the information we confidentially maintain, including that of our clients and counterparties, which is processed, stored in and transmitted through our computer systems and networks, or otherwise cause interruptions or malfunctions in our operations or the operations of our clients and counterparties.
We may be required to expend significant additional resources to modify our protective measures, to investigate and remediate vulnerabilities or other exposures or to make required notifications or disclosures.
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New regulations or guidance relating to climate change, as well as the perspectives of shareholders, employees and other stakeholders regarding climate change, may affect whether and on what terms and conditions we engage in certain activities or offer certain products.
−Removed: Environmental, Social and Governance (ESG) Risks - We are subject to risks relating to environmental, social, and governance (“ESG”) matters that could adversely affect our reputation, business, financial condition, and results of operations, as well as the price of our common stock.
+Added: We are subject to risks relating to environmental, social, and governance (“ESG”) matters that could adversely affect our reputation, business, financial condition, and results of operations, as well as the price of our common stock.
Increasingly, our society and our business are faced with challenges associated with the implementation of policies and practices that are supportive of concerns related to environmental, social and governance (ESG) issues.
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The public holds diverse and often conflicting views on ESG topics.
−Removed: As a financial institution, we have multiple stakeholders, including our shareholders, clients, associates, federal and state regulatory authorities, as well as the communities in which we operate, and these stakeholders will often have differing priorities and expectations regarding ESG issues.
+Added: As a financial institution, we have multiple stakeholders, including our shareholders, clients, associates, federal, state and other regulatory authorities, as well as the communities in which we operate, and these stakeholders will often have differing priorities and expectations regarding ESG issues.
If we take action in conflict with one or another of those stakeholders’ expectations, we could experience an increase in client complaints, a loss of business, or reputational harm.
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Certain of our clients might also require that we implement additional ESG procedures or standards in order to continue to do business with them.
−Removed: If we fail to comply with specific ESG-related investor or client expectations and standards, or to provide the disclosure relating to ESG issues that any third parties may believe is necessary or appropriate (regardless of whether there is a legal requirement to do so), our reputation, business, financial condition, and/or results of operations, as well as the price of our common stock could be negatively impacted.
+Added: If we fail to comply with specific ESG-related investor or client expectations and standards, or to provide the disclosure relating to ESG issues that any
+Added: third parties may believe is necessary or appropriate (regardless of whether there is a legal requirement to do so), our reputation, business, financial condition, and/or results of operations, as well as the price of our common stock could be negatively impacted.
Moreover, there has been increased regulatory focus on ESG-related practices of investment managers.
−Removed: A growing interest on the part of investors and regulators in ESG factors, and increased demand for, and scrutiny of, ESG-related disclosures by asset managers has likewise increased the risk that we could be perceived as, or accused of, making inaccurate or misleading statements regarding the investment strategies offered to our clients or of our ESG efforts or initiatives, commonly referred to
−Removed: as “greenwashing.” Such perceptions or accusations could damage our reputation, result in litigation or regulatory enforcement actions, and adversely affect our business.
+Added: A growing interest on the part of investors and regulators in ESG factors, and increased demand for, and scrutiny of, ESG-related disclosures by asset managers has likewise increased the risk that we could be perceived as, or accused of, making inaccurate or misleading statements regarding the investment strategies offered to our clients or of our ESG efforts or initiatives, commonly referred to as “greenwashing.” Such perceptions or accusations could damage our reputation, result in litigation or regulatory enforcement actions, and adversely affect our business.
REGULATORY AND COMPLIANCE RISKS
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The securities industry and the Company's business are subject to extensive regulation by the SEC, state securities regulators, other governmental regulatory authorities and industry self-regulatory organizations.
−Removed: The Company may be adversely affected by new or revised legislation or regulations or changes in the interpretation or enforcement of existing laws and rules by these governmental authorities and self-regulatory organizations.
+Added: The Company may be adversely affected by new or revised legislation or regulations or changes in the interpretation or enforcement of existing laws and rules by these governmental regulatory authorities and self-regulatory organizations.
Oppenheimer is a broker-dealer and investment adviser registered with the SEC and is primarily regulated by FINRA.
−Removed: Broker-dealers are subject to regulations which cover all aspects of the securities business, including, without limitation sales methods and supervision, underwriting, trading practices among broker-dealers, emerging standards concerning fees and charges imposed on clients for fee-based programs, use and safekeeping of customers' funds and securities, anti-money laundering and the USA Patriot Act (the "Patriot Act") compliance, capital structure of securities firms, trade and regulatory reporting, cybersecurity, pricing of services, compliance with DOL rules and regulations for retirement accounts, compliance with lending practices (Regulation T), record keeping, and the conduct of directors, officers and employees.
+Added: Broker-dealers are subject to regulations which cover all aspects of the securities business, including, without limitation sales methods and supervision, underwriting, trading practices among broker-dealers, emerging standards concerning fees and charges imposed on clients for fee-based programs, use and safekeeping of customers' funds and securities, anti-money laundering and the USA PATRIOT Act o 2001 (the "Patriot Act") compliance, capital structure of securities firms, trade and regulatory reporting, cybersecurity, pricing of services, compliance with Department of Labor ("DOL") rules and regulations for retirement accounts, compliance with lending practices (Regulation T), record keeping, and the conduct of directors, officers and employees.
Compliance with many of the regulations applicable to the Company involves a number of risks, particularly in areas where applicable regulations may be subject to varying interpretation.
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Firms in the financial services industry have been operating in an onerous regulatory environment.
−Removed: The industry has experienced increased scrutiny from a variety of regulators, including the SEC and FINRA as well as state regulators.
+Added: The industry has experienced increased scrutiny from a variety of regulators, including the SEC, CFTC and FINRA as well as state regulators.
Penalties and fines sought by regulatory authorities have increased substantially.
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Each of the regulatory bodies with jurisdiction over us has regulatory powers dealing with many different aspects of financial services, including, but not limited to, the authority to fine us and to grant, cancel, restrict or otherwise impose conditions on the right to continue operating particular businesses.
−Removed: For example, the failure to comply with the obligations imposed by the Exchange Act on broker-dealers and the Advisers Act on investment advisers, including recordkeeping, registration, advertising and operating requirements, disclosure obligations and prohibitions on fraudulent activities, or by the Investment Company Act of 1940, as amended (the "1940 Act"), could result in investigations, sanctions and reputational damage.
+Added: For example, the failure to comply with the obligations imposed by the Exchange Act on broker-dealers and the Advisers Act on investment advisers, including recordkeeping, registration, advertising and operating requirements, disclosure obligations and prohibitions on fraudulent activities, or by the Investment Company Act of 1940, as amended (the "1940 Act"), or could result in investigations, sanctions and reputational damage.
Increasingly, regulators have instituted a practice of "regulation by enforcement" where new interpretations of existing regulations are introduced by bringing enforcement actions against securities firms for activities that occurred in the past but were not then thought to be problematic.
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or foreign governmental regulatory authorities or SROs (e.g., FINRA) that supervise the financial markets.
−Removed: Substantial legal liability or significant regulatory action taken against us could have a material adverse effect on our business prospects including our cash position.
+Added: Substantial legal liability or significant regulatory action taken against us could have a material adverse effect on our business prospects including our financial condition and results of operations.
Numerous regulatory changes, and enhanced regulatory and enforcement activity, relating to the asset management business may increase our compliance and legal costs and otherwise adversely affect our business.
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and several states and municipalities in the United States have adopted "pay-to-play" rules, which could limit our ability to charge advisory fees.
−Removed: Such "pay-to-play" rules could affect the profitability of that portion of our business.
+Added: Such "pay-to-play" rules could affect the profitability of the advisory portion of our business.
Additionally, the use of "soft dollars," where a portion of commissions paid to broker-dealers in connection with the execution of trades also pays for research and other services provided to advisors has been mostly prohibited in Europe and, is periodically reexamined in the U.S.
−Removed: and may be limited or modified in the future The use of various mutual fund share classes has come under significant regulatory scrutiny.
+Added: and may be limited or modified in the future The use of various mutual fund share classes has also come under significant regulatory scrutiny.
The SEC found in conjunction with its Mutual Fund Share Class Disclosure Initiative that the firm's investment management disclosure relating to 12b-1 fees was deficient resulting in restitution of fees to investment management clients.
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The effective compliance date for Reg BI was June 30, 2020.
−Removed: The new rules and processes related thereto will likely limit revenue and most likely involve increased costs, including, but not limited to, compliance costs associated with new or enhanced technology as well as increased litigation costs.
+Added: The new rules and processes related thereto will likely limit revenue and have increased, and will likely continue to increase costs, including, but not limited to, compliance costs associated with new or enhanced technology as well as increased litigation costs.
( see “Business – Regulation – Fiduciary Standard – Rulemaking by the U.S.
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There can be no guarantee that the operation of these systems will allow the Company to prevent or mitigate the various risks faced by its businesses.
−Removed: Various regulators periodically review the companies’ risk control practices, and, if found inadequate, bring enforcement actions and sanctions against such firms.
+Added: Various regulators periodically review the companies’ risk control practices, and, if found inadequate, bring enforcement actions and seek sanctions against such firms.
RISKS ASSOCIATED WITH THE COMPANY’S COMMON STOCK
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Due to the lack of voting power, the holders of the Class A Stock have limited influence on corporate matters.
−Removed: The voting power of the holders of Class B Stock may have the effect of depressing the price of the Company's Class A Stock, delaying or preventing a change in control of the Company or may result in the receipt of a "control premium" by the controlling stockholder which premium would not be received by the holders of the Class A Stock.
+Added: The voting power of the holders of Class B Stock may have the effect of depressing the price of the Company's Class A Stock, and delaying or preventing a change in control of the Company or resulting in the receipt of a "control premium" by the controlling stockholder which premium would not be received by the holders of the Class A Stock.
The controlling stockholder may have potential conflicts of interest with other stockholders including the ability to determine the outcome of "say on pay" votes at the Company.
+Added: The presence of Class B voting shares may also result in the Company receiving low “ESG scores” by some parties having unforeseeable consequences on the Company.
The trading volume in the Company's Class A Stock is less than that of larger financial services companies.
Although the Company's Class A Stock is listed for trading on the NYSE, the trading volume in the Class A Stock is less than that of larger financial services companies.
−Removed: A public trading market having the desired characteristics of depth, liquidity and orderliness depends on the presence in the marketplace of willing buyers and sellers of the Company's Class A Stock at any given time.
+Added: A public trading market having the desired characteristics of depth, liquidity and orderliness depends on the presence in the marketplace of willing buyers and sellers of the company's common stock at any given time.
This presence depends on the individual decisions of investors and general economic and market conditions over which the company has no control.
Given the lower trading volume of the Company's Class A Stock, significant sales of shares of the Company's Class A Stock, or the expectation of these sales, could cause the Company's Class A Stock price to fall and increase the volatility of the Class A Stock generally.
−Removed: We may be removed from market indices.
−Removed: Our Class A Stock is listed on the New York Stock Exchange and is included as a component in various market indices.
−Removed: At any given time, a company may be added, dropped, or retained as a component of a market index.
−Removed: The factors governing whether a company is added, dropped, or retained as a component of a market index may be unique to that index, and may change over time.
−Removed: Because certain funds track market indices, changes in constituent components of a tracked index will necessitate purchase or divestitures of shares of the company being added or dropped from the index.
−Removed: Consequently, any removal of us from an index of which we are currently a constituent component may result in the sale of our Class A Stock by these funds which may negatively impact the liquidity of our Class A stock.
−Removed: We are currently a constituent component of, among others, the Russell 3000 index.
−Removed: We have been informed that because voting rights are exclusively associated with our Class B Stock, which does not publically trade, we will be removed from this index in or about May, 2023.
The Company is the holding company of several operating subsidiaries, and is reliant on dividends and other sources of funding from those subsidiaries to pay dividends to holders of Class A Stock and meet our debt service and other obligations.
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Estimates, by their nature, are based on judgment and available information and may require management to make difficult, subjective and/or complex judgments.
−Removed: If management’s estimates and assumptions are inaccurate, our financial position and results could be materially and adversely impacted.
+Added: If management’s estimates and assumptions are inaccurate, our financial position and results of operations could be materially and adversely impacted.
At times, the Financial Accounting Standards Board (the “FASB”) and the SEC may amend or introduce new accounting standards or interpretive guidance that could impact the preparation of our financial statements.
1 unchanged sentence
In some cases, the new or revised accounting standard may require retrospective application, which would result in us restating prior-period financial statements.
−Removed: The effects of the outbreak of the novel coronavirus (COVID-19) have negatively affected the global economy, the United States economy and the global financial markets, and may disrupt our operations and our clients’ operations, which could have an adverse effect on our business, financial condition and results of operations.
−Removed: The ongoing COVID-19 global and national health emergency has caused significant disruption in the international and United States economies and financial markets.
−Removed: The spread of COVID-19 has caused widespread illness and death, quarantines, cancellation of events and travel, business and school shutdowns, reduction in business activity and financial transactions, unemployment, labor shortages, supply chain interruptions and overall economic and financial market instability in the United States.
−Removed: Similar impacts have been experienced in every country in which we do business.
−Removed: Impacts to our business could be widespread and global, and material impacts may be possible, including key employees contracting COVID-19, reductions in our operating effectiveness as our employees work from home or disaster-recovery locations, unavailability of key personnel necessary to conduct our business activities, an economic environment which may have significant accounting and financial reporting implications, unprecedented volatility in global financial markets, reductions in revenue across our operating businesses, delay in planned entry into, or expansion of, investments or projects in foreign jurisdictions, closure of our offices or the offices of our clients, and de-globalization.
−Removed: We are taking precautions to protect the safety and well-being of our employees and customers.
−Removed: However, no assurance can be given that the steps being taken will be deemed to be adequate or appropriate, nor can we predict the level of disruption which will occur to our employees’ ability to provide customer support and service.
−Removed: We implemented certain elements of our business
−Removed: continuity plan in response to the pandemic, and we continue to rely on the related processes and technologies that were established.
−Removed: While these plans have been effective, i f COVID-19 or another highly infectious or contagious disease continues to spread, if the response to contain it is unsuccessful, or if there are adverse changes in political conditions or social unrest as a result of the response, we may experience adverse effects on our business, financial condition, liquidity, and/or results of operations.
Developments in market and economic conditions have adversely affected, and may in the future adversely affect, the Company's business and profitability.
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These conditions are a product of many factors, which are mostly unpredictable and beyond the Company's control, and may affect the decisions made by financial market participants.
−Removed: Changes in economic and political conditions, including economic output levels, interest and inflation rates, employment levels, prices of commodities including oil and gas, exogenous market events, consumer confidence levels, and fiscal and monetary policy can affect market conditions.
+Added: Changes in economic and political conditions, including economic output levels, interest and inflation rates, employment levels, prices of commodities including oil and gas, exogenous market events, consumer confidence levels, public health emergencies and fiscal and monetary policy can affect market conditions.
For example, the Federal Reserve's policies determine, in large part, the cost of funds for lending and investing and the return earned on those loans and investments.
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While many global financial markets have shown signs of improvement in recent years, uncertainty remains.
−Removed: A period of sustained downturns and/or volatility in the securities markets, and/or prolonged levels of increasing interest rates, could lead to a return to increased credit market dislocations, reductions in the value of real estate, and other negative market factors which could significantly impair our revenues and profitability.
+Added: A period of sustained downturns and/or volatility in the securities markets, and/or prolonged
+Added: levels of increasing interest rates, could lead to a return to increased credit market dislocations, reductions in the value of real estate, and other negative market factors which could significantly impair our revenues and profitability.
markets may also be impacted by political and civil unrest occurring in the Middle East, Eastern Europe, Russia, Venezuela and Asia.
−Removed: Concerns about the European Union ("EU"), including Britain's recent exit from the EU ("Brexit"), and the stability of the EU's sovereign debt, has caused uncertainty and disruption for financial markets globally.
−Removed: Hostilities between Russia and Ukraine have created uncertainties around the spread of the conflict, the use of nuclear weapons as well as its impact on global supply chains impacting energy supplies and food supplies throughout the world.
−Removed: These issues could have unforeseen and negative impacts upon the markets and the Company and its operations.
+Added: Concerns about the European Union ("EU"), including Britain's January 2020 exit from the EU ("Brexit"), and the stability of the EU's sovereign debt, has caused uncertainty and disruption for financial markets globally.
+Added: Hostilities between Russia and Ukraine and the conflict between Israel and Hamas as well as related disruptions of shipping routes in the Red Sea and related military action could have unforeseen and negative impacts upon the markets and the Company and its operations.
Continued uncertainties loom over the outcome of the EU's financial support programs.
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The number of engagements the Company has at any given time is subject to change and may not necessarily result in future revenues.
−Removed: During 2022, assignments related to special purpose acquisition companies ("SPACs") decreased significantly from the prior year.
−Removed: We cannot assure that the volume of transactions for SPACs and corresponding fees will return to prior year's record levels.
+Added: Underwriting activity remained weak in 2023 and may continue so in the immediate future.
Additionally, our investments in SPACs, may be subject to forfeiture, potential regulatory scrutiny and litigation that could negatively affect our financial results.
19 unchanged sentences
Moreover, the Company's inability to reach agreement regarding the terms of unbundling arrangements with institutional clients who are actively seeking such arrangements could result in the loss of those clients, which would likely reduce the level of institutional commissions.
−Removed: The Company believes that price competition and pricing pressures in these and other areas will continue as institutional investors continue to reduce the amounts they are willing to pay, including reducing the number of brokerage firms they use, and some of our competitors seek to obtain market share by reducing fees, commissions or margins.
−Removed: The announcement by several large securities firms as well as a similar “no commission” offering by retail firms utilizing the internet and electronic trading has proven popular among retail clients both new to securities markets as well as some experienced investors and will only add to this pricing pressure, especially on the firms likes ours that cater to retail investors.
+Added: The Company believes that price competition and pricing pressures in these and other areas will continue as institutional investors continue to reduce the amounts they are willing to pay, including reducing the number of brokerage firms they use, and as so of our competitors seek to obtain market share by reducing fees, commissions or margins.
+Added: The announcement by several large securities firms as well as a similar “no commission” offering by retail firms utilizing the internet and electronic trading have proven popular among retail clients both new to securities markets as well as some experienced investors and will only add to this pricing pressure, especially on the firms likes ours that cater to retail investors.
Additional pressure on sales and trading revenue may impair the profitability of the Company's business.
4 unchanged sentences
Costs or difficulties relating to such a transaction, including integration of products, employees, offices, technology systems, accounting systems and management controls, may be difficult to predict accurately and be greater than expected causing the Company's estimates to differ from actual results.
+Added: Operating losses emanating from any such acquired business will be reflected in the Company's reported results.
The Company may be unable to retain key personnel after the transaction, and the transaction may impair relationships with customers and business partners.
3 unchanged sentences
As the costs of doing business increase, the Company may not be able to continue to grow its revenues through “organic” growth (the growth attendant to hiring one employee at a time or through expanding into a new business line through a limited investment in technology and employment).
−Removed: In lieu of organic
−Removed: growth, it becomes increasingly necessary to grow through the acquisition of a business or businesses that fulfill the Company’s strategic decisions for growth.
+Added: In lieu of organic growth, it becomes increasingly necessary to grow through the acquisition of a business or businesses that fulfill the Company’s strategic decisions for growth.
However, due to competition or the cost of such acquisitions, such expansion may not be available on a profitable basis and may threaten the Company’s ongoing ability to expand its business.
7 unchanged sentences
The withdrawal, among other outcomes, has disrupted the free movement of goods, services and people between the UK and the EU, undermined bilateral cooperation in key policy areas and significantly disrupted trade between the UK and the EU.
−Removed: The UK exited the EU without a continuing agreement covering many aspects of its relationship, at least as that relates to financial services, which has been disruptive to the economies of both parties and has negatively affected our business conducted in the EU.
+Added: The UK exited the EU without a continuing agreement covering many aspects of its relationship, at least as that relates to financial services, which has been disruptive to the economies of both the UK and the EU and has negatively affected our business conducted in the EU.
We may also face new regulatory costs and challenges as a result of Brexit that could have a negative effect on our operations.
2 unchanged sentences
The Company has reviewed various strategies to be able to continue its relationships with clients within the EU, including becoming domiciled in one or more EU countries and becoming subject to their respective regulations.
−Removed: We presently plan to have an EU office in Portugal to be able to continue to service various constituencies operating inside the EU.
+Added: We have an EU office in Portugal to be able to continue to service various constituencies operating inside the EU.
There is no assurance that this strategy will be successful or effective.
27 unchanged sentences
The Company maintains key man insurance on the life of its CEO.
−Removed: Approximately 98% of the shares of Class B Stock are held by Phase II Financial Inc.
+Added: Approximately 98% of the shares of Class B Stock are held by Phase II
+Added: Financial Inc.
("Phase II"), a Delaware corporation controlled by Mr.
13 unchanged sentences
employee conduct outside of acceptable norms including harassment;
+Added: employees posting offensive or inappropriate content on social or other internet media;
or employees engaging in “hacking” or breaching our cybersecurity safeguards.
11 unchanged sentences
While the Company has adopted a Code of Conduct and instituted training for its employees, it is difficult to predict when an employee may deviate from acceptable practices and open the Company to liability either from actions taken by other employees or by authorities.
−Removed: UNRESOLVED STAFF COMMENTS
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.