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ARS Investors Targeting Andrew Cuomo

Posted by Larry Doyle on May 13, 2010 7:30 AM |

I know fraud when I see it. I also know a miscarriage of justice when I see it. The manner in which auction-rate securities were distributed was a fraud. The manner in which this fraud has been largely adjudicated has been a massive miscarriage of justice. No miscarriage has been greater than that laid at the feet of those auction-rate securities investors who purchased ARS from Oppenheimer and Company.

In true American patriotic spirit, these ARS investors are not taking this injustice sitting down. I have never owned an auction-rate security, but I welcome joining their fight and highlighting their cause. On that note, Andrew Cuomo should watch out. A group of Oppeneheimer ARS investors just released the following statement:

As most of you know, in late February New York Attorney General Andrew Cuomo struck a deal with Oppenheimer & Company requiring the firm to pay back a small percentage of the auction rate securities they sold. About five percent of the total outstanding. This contrasts with the deals Cuomo and Mr. Galvin, Attorney General in Massachusetts, (LD’s edit: Galvin is actually MA Secretary of State. Martha Coakley is MA AG) made with every other firm requiring a 100 percent pay back. Oppenheimer clients are of the opinion that Mr. Cuomo’s “settlement” is woefully inadequate and was made for political purposes before his likely run for governor.

We feel that by agreeing to this “settlement” Mr. Cuomo shows that he’s willing to side with corrupt firms like Oppenheimer at the expense of the “little guy” working citizens whose money remains trapped. Oppenheimer also has many senior citizens who are stuck in auction rates. Thus one can reach the conclusion that Mr. Cuomo sides with big business over the elderly. We hope to get this message out to groups of seniors by virtue of an interview with AARP magazine among other avenues.

The money that is still frozen would be used to buy homes, automobiles and fund college educations in New York, Missouri, California and other states. This continues to be a great anchor on the financial recovery in this country. To allow Oppenheimer to not redeem ARPS is unpatriotic.

Who are we? A contingent of Oppenheimer clients, frozen in auction rates for two plus years. We’re mainly comprised of New York residents, although our members come from seven states. We’ve largely supported Mr. Cuomo in the past and feel let down by a man we looked up to.

Oppenheimer pleaded poverty to N.Y. regulators. That was the rationale for only requiring them to pay back five percent of what they owe. Yet, since the “settlement” in late February, Oppenheimer has been on a spending spree, in the past eight weeks announcing the following: expensive new hires for several offices, including Newport Beach, California; an announcement that the firm is expanding operations into Asia, in the hopes of soon becoming the biggest U.S. brokerage doing business there; paid a healthy dividend; announced a generous buy back (things that only healthy firms are able to do.); and, Oppenherimer CEO Al “Bud” Lowenthal announced last week that Oppenheimer made a profit for the first quarter this year, something many of those firms that agreed to pay back 100 percent of ARPS did not. Lowenthal also said that Oppenheimer’s future looks bright.

Per the “settlement” with New York, Oppenheimer is allegedly up for review every six months to see if its financial condition has improved. I think anyone with access to a newsstand or the Internet can clearly see that Oppenheimer is in solid financial shape.

Pre-settlement Oppenheimer updated frozen clients with regular mass emails on the frozen ARS market. Once the settlement was reached, those updates stopped abruptly. We feel strongly that these updates were for the benefit of regulators who were deciding Oppenheimer’s fate. Once that fate was decided, and Oppenheimer had erroneously convinced regulators that they cared about their clients, there was no need to keep clients informed. Indeed, Oppenheimer has shown a total disregard for clients throughout this ordeal. We’ve been subjected to hostility, anger, fabricated emails and veiled threats from those to whom we entrusted our money.

We consider the five percent “settlement” to be a joke. Whatever the reasons Cuomo struck such a sweetheart deal with Oppenheimer at the expense of citizens who work so hard for their money is beyond our grasp. Yet we will remain silent no longer.

Going forward, and accelerating as Mr. Cuomo announces his likely run for governor, we will attempt to do as many print, radio and television interviews as possible, explaining that we think the New York Attorney General’s office reached a deal with Oppenheimer that displayed a callous favoritism for Wall Street over Main Street, and for big business over working people. It’s David vs. Goliath, and Cuomo sided with Goliath.

Our attempts to discuss this matter with New York regulators, and to see if in fact things could change with the six month review, have gone unanswered. Our calls and emails to New York state regulators largely go unreturned. When they do respond, they usually say the office is backed up. Let me point out that auction rates remains a $150 billion problem. By comparison, Madoff is a $60 billion problem. Also, Madoff victims invested in the stock market where you must be prepared to lose all you invest. Oppenheimer victims were told we were investing in a CD-like certificate that was “as safe as safe can be.”

We feel that the financial media, with a few exceptions, has been largely neglectful in reporting the story. It’s our hope that as Mr. Cuomo perhaps campaigns for governor of New York and we bring the injustice that we’ve suffered to light, that this neglect will be rectified.

Perhaps the best way to rectify this situation would be for New York to follow through on the threat to invoke the Martin Act, when and if Oppenheimer is actually up for six month review.

Oppenheimer Auction Rate Clients

If you care about decency and fairness in our society, please share this commentary with friends, family, and colleagues. The auction-rate securities market remains the single greatest fraud ever perpetrated. Cuomo’s settlement with Oppenheimer is nothing more than a massive insult added to a debilitating injury. In agreeing to this settlement, Cuomo shows himself to be a fraud as well.


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  • jimmy

    What a bunch of crooks at Oppenheimer. They strung along their clients for years on this, and now a b.s. settlement with Cuomo and they think they got off scot-free. Keep the light shining on these cockroaches.

  • phil trupp

    My congratulations to Larry Doyle for calling it like it is.

    For more than two years, I have tracked the pathetic Oppenheimer whack-a-mole game. Many of the company’s ARS victims have called me personally, sometimes enraged, at other times fearful of incurring the company’s ire. Is it right, I wondered, for a broker-dealer to intimidate its clients? How could this be?

    The allegations which came my way were stomach-churning. Many correspondents told me, at times tearfully, that they wanted to “go public” about their treatment by Oppenheimer reps, but feared retaliation. Specifically, according to these client-correspondents, the reps claimed that going public with ARS run-around stories would “mark” these clients for defeat in any FINRA arbitration. This is not only immoral (we expect Wall Street to be immoral); it is illegal. If these client allegations prove to be true, it will be time for FBI badges, not SEC wrist-slaps.

    No one, including Mr. Cuomo, has explained the settlement in which Oppenheimer was given the go ahead to pay back its ARS victims piecemeal, presumably at a time (unspecified) when it was able shoulder its financial responsibilities. The poor mouth excuse did not go down well with ARS victims. This very generous allowance by Mr, Cuomo was granted to a company that sold nearly $1 billion in auction paper but apparently pleaded poverty when asked to redeem the clients who were caught up in the fraud.

    Soon after Mr. Cuomo’s partial settlement, Oppenheimer expanded its reach. It opened new offices, hired high-priced talent, began a new TV ad campaign, and has begun to expand its outreach to Asia. It paid a good dividend last quarter and crowed over its earnings. And yet, with so much evidence of profitability, Mr. Cuomo apparently bought the company line that it could not afford fully redeem its ARS clients.

    More than one observer has written that this decision by the New York AG carried the aroma of what in the boxing world is called “home cooking”–a fix to please the hometown crowd. In this case the “homies” were Oppenheimer, not New Yorkers.

    Those of us who take a professional interest in these matters believed Mr. Cuomo was above this sort of dealing. But now there are doubts, and the residents of New York are livid and–at last!–vocal. Their voices will be heard at the polls in November.

    It is long past time for the Oppenheimer complaint to be revisited and some hard questions asked of both Mr. Cuomo and those who appear to be his friends inside the company.

    It is time for everyone to come clean and to make Oppenheimer’s ARS victims whole.

    • ourdad55

      Those of us who take a professional interest in these matters believed Mr. Cuomo was above this sort of dealing.
      Just curious, what is your line of work that results in your taking a “professional interest in these matters”.

      • phil trupp

        I’m a professional investigative journalist with nearly 50 years of experience. For a deeper insight to the ARS scandal, read my latest book “Ruthless: How Ordinary Investors Beat the Biggest Scam in Wall Street History,” John Wiley & Sons, to be released in late September.

  • Dave Chase

    I am an Oppenheimer auction rate victim, retired and living on fixed income. I can’t even begin to tell you the emotional abuse I’ve endured. My health has even suffered these past 2 years. I want my money back. I was told this was “cash” and guaranteed safe. Just please give me my money.

    • todd tedesco

      I am in the same position. Was “sold” ARPS as cash equivalents and some 3 years later I am stuck receiving .05 % interest on $ I can not access.
      Is there a group or forum to join as a way of seeking remedy?


      • Kathy

        Todd and Dave,

        Many of us ARS victims have been sharing information for the last two years. People all over the country commented about an article on the site, and we became an active group lobbying regulators, legislators, and the culprits themselves — the investment banks and the funds that refuse to return fraudulently obtained money. Join the conversation here:

        NEVER stop demanding that your money be returned!

  • Bouillet

    I’m a foreigner who spent 20 years in
    NYC ,better say I’m a “2nd class citizen”
    which I did not mind at all until recent
    ly ,I’m 67 and always looked up to America
    so much so to spend a part of my life th
    ere and promote this country (freely)whereve
    rever I went (many places).I have been
    hit financially in this sad saga ,but no
    to the point of putting my life in jeopardy
    But the trust in the country and its sense o
    of justice are gone:you can strike a match only once
    only once…the disappointment is
    unfathomable and I’m leaving the place.

    • todd tedesco

      I am interested in your opinion – it is natural to consider that the grass is greener on the other side of the hill, but as the USA continues to plummet I am starting to consider a move over the hill – If you really leave this place, will it be any better somewhere else? Why not stay and try to change this place.

    • john w

      I agree 100%. The USAmerika is one big nation ruled by fraud and dog-eat-dog capitalism run amouk.
      The financial system is rigged and run by con-men, criminals, and liers.

      Personally, I am moving to Canada in 9mos.

  • LD

    I received the following e-mail regarding this post and am compelled to share it with the Sense on Cents audience,

    I read with great interest the May 13, 2010 post on your website from group of “Oppenheimer ARS investors” regarding the settlement between Oppenheimer and Company (“Oppenheimer”) and the New York Attorney General’s Office (the “NYAG”).

    As you know, my firm acts as lead counsel for the lead plaintiff in the class action lawsuit pending in the United States District Court for the Southern of New York entitled In re Citigroup Auction Rate Securities Litigation. The class our client seeks to represent includes all individuals and entities that held auction rate securities on February 11, 2008, underwritten, sold or managed by Citigroup or its subsidiary Citigroup Global Markets, Inc. (“Citigroup”). Class members include not only investors that purchased these securities through Smith Barney, which was at the time Citigroup’s brokerage arm, but investors that purchased auction rate securities through “downstream” brokers, such as Oppenheimer. In Citigroup’s settlement with NYAG, only Smith Barney retail customers were redeemed at par. Accordingly, it is possible that investors within the group referred to on your website might very well be members of the class our client seeks to represent. In this regard, we would be more than happy to speak to any of these individuals to determine whether the auction rate securities they purchased through Oppenheimer were underwritten or managed by Citigroup and thus part of the class our client seek to represent. If these investors purchased auction rate securities through Oppenheimer that were not underwritten or managed by Citigroup, they may be members of the classes in other auction rate securities class actions pending against auction rate securities underwriters and managers in various courts around the country.

    Feel free to pass this on to any investors that contact you. If you have any questions, do not hesitate to contact me.

    Robert S. Schachter, Esq.
    Zwerling, Schachter & Zwerling, LLP
    41 Madison Avenue
    New York, NY 10010
    Tel: 212∙223∙3900
    Fax: 212∙371∙5969

    • todd tedesco


      What do I need to provide to your firm to verify my position in any class action suit. I hold ARPS through Oppenheimer.


  • Oppenheimer Sucker

    Now New York State Attorney General sucker. There is nothing more embarrassing to our country and insulting and pathetic to New Yorkers then the state of affairs of New York State politics. NYSAG Cuomo is right in the thick of this. The way he totally disregarded justice and ignored the auction rate securities plight of hundreds of tax paying NYS residents in favor of Oppenheimer & co seems right out of the Albany play book. I would love to know what went on behind the scene between Cuomo and Lowenthal (ceo Oppenheimer) to allow Oppenheimer to get such a sweetheart deal. This sucker punch from Cuomo caught me totally off guard. Now I know the real problem we had was that ARS victims went unrepresented at the negotiations between Cuomo and Oppenheimer. This is what NYS residents should expect from Cuomo as governor.

  • john w

    To Dave Chase

    Hello Sir, I am in the identical situation with E*Trade! I will be 62 soon.

    I too have suffered “I can’t even begin to tell you the emotional abuse I’ve endured” I got threatening phones calls from their brokers when I started and joing a Calss Action. They hang up the phone, block access to even view the ARPS in my IRA, alter account images from Cash to other. I have had to begin FINRA filing to attempt to get me money back , who is crooked too. As you My health has even suffered these past 2 years, anxiety, depression, marriage problems, opportunity loss. And this pond scum at E*Trade and their attorneys defending the indefensible are still stone-walling. I wass told this was “cash” and guaranteed safe. Just please give me my money is my lament also.

    I managed to see my Congressman in person a week ago, and he promised to contact teh SEC and my State attorney General on behalf. I’ll advise this blog if I get any success.

    This whole ordeal they have put us through is as crimminal fradulent obfuscation by a bunch of intransigentent, icorrigable Wall Street crooks. I have drawn everything else out of the crooed rigged casio and put in tangible assest like gold in my hands>
    Good luck all, and we NEED TO KEEP SCREAMING ABOUT THIS

    • phil trupp

      It took years to settle the Exxon Valdez disaster, and it will take a very long time to get justice for the people of the Gulf coast facing the BP/Transocean/Halliburton juggernaut. The ARS scandal will follow the same course of legal entanglements and political dealing. My book “Ruthless” (see above)shows ways and means to beat the financial spoilers such as Oppenheimer and TD Ameritrade. Unfortunately, our “Ruthless” crew didn’t force the redemption of the entire $336 billion in auction-rate debt, but we did manage to retrieve $200 billion. To a large extent, we beat the “banksters.” Nevertheless, the fight has to continue with pressure and raised voices. Wall Street may be steeped in money. But in truth it is a moral slum–a very dangerous neighborhood, even for the crooks. I will continue the fight on the ARS and other financial fronts. If you wish to contact me, I’m available.

  • Parker Ruthers

    Most of us have sold all our non ARS money in Oppenheimer.(The ARS money must stay there for legal reasons.) We want to get as far away from this Mafia-type company as possible. if you haven’t sold out of Oppenheimer, do so immediately. If this company cannot afford to meet their obligations, the firm may be on brink of collapse.

    some of us are taking out a large display ad in Wall Street Journal warning people against doing business with Oppenheimer. If you want to be informed of this and other methods, pls. leave a contact email.

  • phil trupp

    Parker Ruthers,
    Contact me anytime at

  • Kathy

    Thanks to Larry Doyle for staying with this issue. This is not just any securities fraud — it’s $336 billion worth of fraud that the government has completely ignored. How does $336 billion drop out of an economy, and no one cares?

    Andrew Cuomo helped many ARS victims get their money back, but he gave one of the worst offenders – Oppenheimer — a pass. They are criminals, and they must be prosecuted.

  • Mikaele

    Thanks to everyone who continue to site, report, and comment on this ARPS/ARS disaster. I still have ZERO faith in The Market and in Wall Street. And unfortunately now in the AG’s and other Government Officers, that we supported emotionally and financially to represent the people. When will they wake up and realize that if our trust is EVER to be restored, all these agents need to be held responsible for their fraudulent misrepresentation?

  • John W

    Hi Phil
    Thanks for all your work. I will pre-order your book at Amazon.

    Ameritrade, as you know finally did the right thing and redeemed its victims, albeit at the muzzel of a gun.

    I continue to do battle with the low-lifes at E*Trade, please remember them in your book with “coldest” regards.
    How they manage to avoid punishment so far is incredulous.

    E*Trade is the most intransident, corrupt, dealing off the bottom of the deck bottom feeder there is. ( Right under Schwab, and feeding on the bottom of the septic tank with Oppenheimer. )


    They are still stealing $50,000.00 of my IRA money.

    • phil trupp

      Thanks, John. I’m hoping the book will expose ARS for the fraud it really is, and continues to be. And there is a wider message: Wall Street is all about fraud and Washington is its enabler.

  • Parker Ruthers

    Many of these firms are bad. E trade and Schwab, certainly. But I have to say Oppenheimer is the worst. What they have done to me and my family, and the way they’ve dealt with this, and the way they LIE, CONSTANTLY, to regulators and government officials…it makes it almost impossible to go to arbitration with Oppenheimer. When you look at the lies and the fake emails they concocted, I can only imagine what its like to face off with them in arbitration. I have little doubt they’d probably walk into a hearing with a log of calls that never occured where they *warned* clients of trouble in the ARS market. Oppenheimer makes the Gambino family look moral. DON’T DO BUSINESS WITH OPPENHEIMER.

  • john w

    E*Trade has also manufactured emails, lied, altered on-line records, and changed the classification of ARPS from cash to “other” overnight last year. and it appears even tried to forge my signature on a so-called advice form, which I never did. Having to try to take lying sack-o-sheets like E*trade & Oppenheimer to a rigged FINRA arbitration is absurd. That stinking FINRA and or the SEC should order these crimminal broker to redeem this trash asap. I have filed a FINRA arb. as of last Dec 18th, and E*trad keeps managing to stonewall and delay a hearing date. WTF gives with that! I had to furnish “discovery” within 4 weeks. And they wonder why people are fed up and dont trust govnmnt or Fraud Street!

    I wish all of us could somehow come together for a “March-on FINRA” in Washington DC with our “pitchforks, hot tar and torches and demand justice. This situation needs to be escaleted into the evening or cable news.

    I wish I knew how to reach O’Reilly and/or Michael Moore.
    Any ideas out there?

    My state Attorney General in CO sits on their butt regaring E*turd.
    I have managed to get my Congressman to personally investigate. no word yet.

  • jim

    Thanks Larry for keeping this issue alive. Looking forward to the publication of Phil Trupp’s book in September..hopefully it will expose the fraud in a big way. The Oppenheimer deal is a slap in the face of ARS victims..hopefully Cuomo is defeated in November. I am a Raymond James ARS victim..they have also fallen off the radar completely – hopefully they and others will be forced to make everyone whole just as Cuomo did with the bigger players before he decided to run for governor. I have sent all your posts to my Congressman but get no response..why am I not surprised? Please keep up the fight!

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