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Walt Garrison Lassoed by Auction-Rate Securities

Posted by Larry Doyle on January 30, 2010 3:06 PM |

Growing up as  a young boy in Boston, I loved sports of all kinds. Regrettably, our local professional football team, the then Boston Patriots, were a perennial league doormat in the American Football League.

What team did I love? The Green Bay Packers. Led by Vince Lombardi, the Packers played on the frozen tundra otherwise known as Lambeau Field. The memories of the 1967 NFL Championship game, known as the Ice Bowl due to bone chilling negative temperatures, between my Packers and the hated Dallas Cowboys remain etched in my memory.

The Packers won the game 21-17 on a quarterback sneak by my hero Bart Starr with only seconds left in the game. This game was filled with so many legends, including Cowboys coach Tom Landry, quarterback Don Meredith, defensive tackle Jethro Pugh, middle linebacker Lee Roy Jordan, running back Dan Reeves and so many more. My Packers had Starr, middle linebacker Ray Nitschke, guard Jerry Kramer, receiver Boyd Dowler, running back Donny Anderson, safety Willie Wood, and so many more. I loved these guys and loved that game.

On the bench that day as a backup fullback for the Cowboys was Walt Garrison. I have no recollection of Garrison playing during that Ice Bowl, but he went on to a stellar career. When I think back to Walt Garrison, I think of one thing: he was one tough SOB. After his football days, Garrison was a popular figure on the rodeo circuit and became a spokesperson for Skoal chewing tobacco.

I will readily admit for the last thirty plus years, I have given little thought to Walt Garrison…until today.

Thank you to a regular reader of Sense on Cents for sharing the fact that Walt Garrison is another innocent American investor entangled — or in Walt’s case dare I say lassoed — by the fraud that is auction-rate securities.

Courthouse News Service reported yesterday, NFL Star Says Adviser Cost Him $3.8 Million:

DENTON, Texas (CN) – Former Dallas Cowboys fullback Walt Garrison says his advisers duped him and his ex-wife into buying risky Auction Rate Securities that cost them $3.8 million when the market collapsed.

The Garrisons claim that James Montgomery, a friend of the couple and Walt’s former teammate, misrepresented ARS as the “equivalent of cash” and suitable for conservative investors.

The couple sued Montgomery and his employer, Oppenheimer & Co., in Denton County Court, alleging negligence and securities fraud.

The Garrisons say Montgomery neglected to tell them that the value of ARS is tied to regular auctions that could fail. That’s what happened in February 2008, “stranding” the couple with $3.8 million of worthless securities, according to the lawsuit.

Garrison and his ex-wife, Debbie Garrison, a former Miss Rodeo America, characterize themselves as conservative and unsophisticated investors who relied upon Montgomery’s advice. They say Montgomery advised them from 2003 until 2008, and continued to work with both even after their 2005 divorce.

The Garrisons want their money back and punitive damages.

Garrison played for the Dallas Cowboys from 1966 to 1974, and rode the rodeo circuit in the off season. He was for many years the spokesman for Skoal snuff.

The Garrisons are represented by Thomas Graves with McKool Smith in Dallas.

Garrison’s football career may evoke pleasant boyhood memories for me, but that fact certainly does not warrant any more attention to his plight than any other ARS investor.

I am writing this commentary to leverage Garrison’s background in drawing attention to the thousands of investors, similar to Garrison and his ex-wife, who have $150 billion in funds remaining frozen in ARS.

Who was supposed to have protected Garrison and every other ARS investors from the fraud embedded in the misrepresentation of ARS? The NASD and its offspring, FINRA.

Perhaps Garrison’s attorneys are not aware that the NASD itself owned ARS in its own internal investment portfolio. In fact, as I have highlighted, the “NASD Knew Auction-Rate Securities Weren’t Cash.”

Perhaps Garrison’s attorneys and those of many other ARS investors might also like to know that FINRA liquidated those ARS bonds, $647 million worth, in mid-2007 as the market was failing. When did FINRA post the color of the failing ARS market on its website? Early 2008, after the market had totally frozen.

None of this information is new to regular readers here, but hopefully Walt Garrison’s case will bring more attention to the plight of all ARS investors.

To that end, I am happy to submit all of my work relating to FINRA and its massive failure to protect ARS investors right here. I encourage investors and legal representatives to specifically review my analysis of FINRA’s (June 29th) and the NASD’s Annual Reports (May 11th).

If even one attorney finds this material and can make a stronger case for his client, my work will not be in vain.

As for Walt, I will admit that I’ve never used tobacco products, but in the spirit of trying to help you, your ex, and every other ARS investor, I offer you and everybody a heartfelt and deeply meaningful, “Skoal, brother!”

LD

  • Tex

    Interesting read in that one teammate, Montgomery, sold this investment to another. Little doubt that Montgomery was likely totally ignorant as to what ARS truly were.

    Whether Oppenheimer’s management was equally ignorant, who knows. When did ignorance of the law become an acceptable excuse?

    ARS were misrepresented. Investors should be made whole. Oppenheimer and every other entity underwriting and selling ARS should be held accountable.

    They have Walt’s money. He wants it back just as the salesman told him he could get it. Give it to him.

    Maybe ol’ Walt should go ‘take ’em down’.

    Tough loss for my ‘boys back in ’67. Did you have to bring that up? Aside from that angle it was a good read.

  • John Wallace

    lARRY:

    ANOTHER IDEA

    LETS ALL TIP OFF THE SO-CALLED WISTLEBLOWERS AT FINRA TOO.. TELL THEM TO GO LOOK INTO THE MIRROR

    Office of the Whistleblower

    Dedicated Team to Handle High-Risk Tips

    FINRA’s Office of the Whistleblower expedites the review of high-risk tips by FINRA senior staff and ensures a rapid response for tips believed to have merit.

    Through the Office of the Whistleblower, individuals with evidence of, or material information about, potentially illegal or unethical activity can reach senior staff, who can quickly assess the level of risk involved and make sure that each tip is properly evaluated. Those tips warranting additional review and investigation will be subject to an expedited regulatory response.

    FINRA will refer any whistleblower tips that fall outside its jurisdictional reach to the appropriate regulatory or law enforcement agencies.

    FINRA’s whistleblower initiative does not replace longstanding processes for handling thousands of routine regulatory tips and customer complaints each year.

    Submit a Tip
    whistleblower@finra.org
    1-866-96-FINRA (1-866-963-4672)






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