Cash Sweep Class Action Lawsuit Investigation

Shamis & Gentile P.A., one of the nation's premier class action law firms, is investigating potential claims against various financial institutions involving their cash sweep programs.

If you had uninvested cash swept into a financial institution’s cash sweep program, you may be eligible for compensation through a potential class action.

Background

Many banks, brokerage firms and investment advisory firms in the United States offer “cash sweep” features in their investment accounts. These institutions include large national banks and well-known broker-dealers that provide retail brokerage, IRA, discretionary advisory and other investment accounts to individuals and businesses.

In these accounts, customers often hold “idle” or uninvested cash between trades, while waiting to deploy funds, or as part of a conservative investment strategy. Rather than leaving that cash in a non–interest-bearing position, financial institutions commonly move, or “sweep,” the cash into interest-bearing deposit accounts, often at affiliated or partner banks.

According to publicly filed lawsuits and court records, approximately 25 separate cases have been filed in federal court against various financial institutions challenging aspects of these cash sweep programs.

One such case, Liberty Capital Group v. Oppenheimer Holdings Inc. and related entities, was filed in the U.S. District Court for the Southern District of New York in June 2025 and involved a sweep program that moved idle customer cash into a bank demand deposit account that provided Federal Deposit Insurance Corporation (FDIC) insurance, liquidity and check-writing access.

On Dec. 8, 2025, the court granted class certification on claims including breach of contract and related theories, and in April 2026 Oppenheimer announced a proposed $70 million settlement, subject to court approval, to resolve those claims without admitting liability.

These developments are part of a broader wave of scrutiny of cash sweep practices across the financial services industry.

Why are Cash Sweep Programs Being Investigated?

From ongoing and resolved lawsuits:

• Investors and businesses may have had their uninvested cash swept into accounts that paid unfairly low interest rates
• The interest rates paid on these sweep balances were allegedly unreasonably low or below market, compared with what investors might have earned in other available cash alternatives
• Financial institutions reportedly generated “net interest income” on these programs. In other words, they earned a higher rate when they loaned or invested the sweep deposits, while paying customers a lower rate on their cash
• The lawsuits allege that this structure allowed institutions to reap substantial profits at the expense of their customers

In the Oppenheimer litigation, for example, the sweep program at issue moved idle client cash into an FDIC-insured bank demand deposit account that also offered liquidity and check-writing. The disputed period began in 2022 and extends through the date of final court approval of the proposed settlement.

Plaintiffs in that case asserted that the firm’s sweep practices violated contractual and related obligations, while the company has maintained that the rates it offered during the period were competitive with those of major competitors and that the program was designed for short-term, highly liquid deposits.

More broadly, cash sweep class action complaints filed against various financial institutions have alleged that:

• Customers were underpaid interest on their sweep balances
• Institutions failed to adequately disclose how much they profited from the spread between what they earned on sweep deposits and what they paid to customers
• The programs created a conflict of interest, because paying customers lower interest directly increased the institution’s profitability
• Customers with discretionary accounts, IRAs and other investment accounts may have been particularly affected if large cash balances sat in low-yield sweep options for extended periods

The pattern of allegations raises important questions about whether investors across many firms were fairly compensated for the use of their cash.

If someone had a discretionary investment account, an IRA or retirement account, a traditional brokerage account or another type of investment account at a bank, brokerage or advisory firm where uninvested cash was automatically swept into a low-interest cash sweep program, they may have been affected by these practices.

You May be Eligible for Compensation

People who had an investment account with a cash sweep feature at a bank, brokerage or advisory firm can take several steps:

• Gather documents: Locate account statements, client agreements and any disclosures describing the cash sweep or “core” cash option, especially from 2022 onward
• Note interest rates: If possible, identify the approximate interest rate paid on sweep balances during relevant periods
• Identify the institution and account type: Whether it was a discretionary advisory account, IRA, traditional brokerage account or another type of account can affect legal rights
• Speak with experienced counsel: A legal team can evaluate whether they may have a claim and whether they might be part of an existing or potential class

A team of class action and securities lawyers is reviewing these issues and is ready to help evaluate individual situations confidentially and at no upfront cost.

To find out if you may be eligible for compensation related to a cash sweep program at a financial institution, please complete the form on this page so the team can review your information and contact you about your potential claim.