Is Your Uninvested Cash Being Swept Into Accounts Paying Low Interest Rates?
Financial firms may use cash sweep programs to automatically move customers’ uninvested cash into bank deposit accounts or other cash vehicles. Customers may earn interest on the swept cash, while financial firms or participating banks may receive economic benefits associated with the arrangement.
Recent class action litigation, including the Oppenheimer matter discussed below, has raised allegations concerning the interest rates paid to customers participating in cash sweep programs and the financial benefits firms may receive from those arrangements.
What Is a Cash Sweep Program?
A cash sweep program automatically transfers uninvested customer cash into a designated bank deposit account or other cash vehicle. Customers may earn interest on the swept cash, while financial firms, affiliated entities, or participating banks may receive economic benefits associated with the arrangement.
Cash sweep programs are not inherently improper, and a particular interest rate does not by itself establish wrongdoing. Legal issues may depend on the governing account and program documents, the nature of the customer relationship, the representations made about how rates are determined, and the specific financial arrangements involved.
Oppenheimer Cash Sweep Litigation: A $70 Million Settlement
Law360 reported on September 18, 2026 that U.S. District Judge Jed S. Rakoff granted final approval to a $70 million settlement between Oppenheimer and a class of customers in litigation concerning Oppenheimer’s Advantage Bank Deposit Program. According to Law360, the program automatically invested customer cash in interest-bearing accounts at banks selected by Oppenheimer.
According to Law360, the plaintiff alleged that the program was “highly lucrative” for Oppenheimer and participating banks while paying customers “unreasonable, below-market interest rates.” Law360 also reported that the plaintiff alleged Oppenheimer and the program banks benefited from the spread between the rates paid to customers and the returns earned from the use of the swept cash.
Why Cash Sweep Interest Rates May Matter
Cash sweep arrangements may involve information concerning the interest rate credited to swept cash, how that rate is determined under the governing documents, where the cash is deposited, and financial benefits the firm or participating banks may receive from the arrangement.
The legal significance of a cash sweep arrangement depends on the particular facts and governing documents. The Oppenheimer matter is included here only as an example of recent litigation involving allegations concerning cash sweep interest rates and the financial benefits associated with a sweep program.
Were You Affected by a Cash Sweep Program?
If you had uninvested cash that was automatically placed into a cash sweep or bank deposit program and have concerns about the interest credited to your cash or the financial benefits associated with the arrangement, contact Kehoe Law Firm, P.C. to review your circumstances and discuss your potential legal rights.
For a free, no-obligation legal evaluation:
Michael Yarnoff, Esq.
(215) 792-6676, Ext. 804
[email protected]
[email protected]
About Kehoe Law Firm, P.C.
Kehoe Law Firm, P.C. is a nationally recognized, plaintiff-side class action law firm representing investors, consumers, and employees in matters involving securities fraud, corporate misconduct, mergers and acquisitions, antitrust violations, whistleblower claims, data breaches, consumer fraud, employment law violations, and retirement-plan mismanagement. Its attorneys have served as lead or co-lead counsel in major securities cases, recovering more than $10 billion for institutional and individual investors.
Kehoe Law Firm’s class action legal services are provided on a contingency-fee basis, meaning plaintiffs are not responsible for attorneys’ fees or litigation expenses. Any request for attorneys’ fees and expenses will be subject to court approval.
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