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If Andrew Cuomo Is Such a Tough Guy, Then…

Posted by Larry Doyle on May 21, 2010 1:33 PM |

NY Attorney General Andrew Cuomo

The Wall Street Journal reports today that Andrew Cuomo will be exceptionally tough with legislators who do not play ball with him if and when he is governor of New York. How might Cuomo display his toughness? Cuomo’s Message: Dont Cross Me highlights:

As Democrats in Albany prepare to celebrate the kickoff of Andrew Cuomo’s campaign for governor next week, Mr. Cuomo is quietly putting out the word that if he’s elected lawmakers who resist his agenda will be punished.

Mr. Cuomo, who holds a wide lead in polls over possible challengers, has said he would even go so far as to support rival candidates against recalcitrant legislators of either party, according to people familiar with private discussions the attorney general has had with potential supporters.

Where was this toughness from Cuomo when it came to negotiating a settlement with Oppenheimer on behalf of auction-rate securities investors? In that settlement, Cuomo rolled over like a dog. Or, perhaps, Cuomo had more to gain from Oppenheimer by acceding to a cheap settlement.  Would Cuomo stoop so low and effectively reward Oppenheimer with such a sweetheart settlement? Let’s revisit today’s WSJ report:

“He said he’s going to pick off legislators,” said a person who heard Mr. Cuomo’s comments. Mr. Cuomo, who has yet to officially announce his candidacy, described a carrot-and-stick approach that would reward cooperation with political protection, resources and access.

Cooperation? Interesting. Looks like Andy knows how to play politics. Did he play politics with the funds rightfully owned by investors who purchased ARS from Oppenheimer? Might we ever learn the real details behind that negotiation and settlement? The WSJ continues:

In a speech before a gathering of Democrats in Niagara Falls three weeks ago, Mr. Cuomo said the state government had “violated the public trust” and demanded that Albany “clean up the disgrace that is the legislative process.”

Violated the public trust? If we listen to the individuals who purchased ARS from Oppenheimer and who still continue to suffer given the pathetic terms agreed to by Cuomo, we may hear more about violations of trust.

If Cuomo were truly tough, he would have stood up for these investors rather than having played politics with their money and their well being.

Andrew Cuomo tough? Not by how I measure toughness.


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  • Oppenheimer Sucker

    How is Cuomo going to be tough with Albany? Lowenthal (CEO Oppenheimer) dictated the terms of the auction rate securities agreement to him. He completely failed the hundreds of NYS residents that were counting on him. All his talk about enacting the Martin Act amounted to nothing. He would like us to believe he will be tough in Albany. It will be more of the same if he gets elected.

  • Don Kanjen

    The way Cuomo dealt with Oppenheimer was a disgrace to all the elderly Americans who own auction rates through Oppenheimer. Cuomo does not care about senior citizens, THE PEOPLE WHO ACTUALLY VOTE. Oppenheimer does not care about its clients.

    I know Larry’s blog shows up high on Google searches. So all the prospective clients who found this after Googling Oppenheimer, just know that OPPENHEIMER IS AN AWFUL PLACE TO PUT YOUR MONEY. Any other brokerage is better. Oppenheimer pleaded poverty to N.Y. regulators. Do you want to put your life savings into a firm that apparently has no capital??

  • Bud Zipstein

    A group of investors are taking out full page ads all around the country – in financial publications and on web sites – warning investors to avoid Oppenheimer like the plague. If you want to particpate, leave your contact info. The more people we have in on this, the harder we can hit Oppenheimer, AKA “The Evil Empire.”

    • john w

      Can we please include E*trade in these ads? Most of the Auctions Rates they hoisted off on folks were obtained from Oppenheimer on the contra-side of the trade.
      I would charge the E*Trade was one of Oppenheimer’s stooges to assist them in the unloading.

  • Kathy

    So let’s challenge the tough guy. You want to put fear into the financial community? Invoke the Martin Act against Oppenheimer! They’ve already broken the terms of settlement. Go ahead — make an example of them!

  • J. D.

    Cuomo can be real tuff if he wants to be. He got 100% redemptions from the dozen largest banks in the world. The question is why didn’t he get the same settlement from smaller firms, like Oppenheimer? They all misrepresented these securities in the same manner and they all had prior knowledge that the market was failing. I believe Massachusetts AG’s proved Oppenheimer knew. The only real difference between the larger banks and the not so large is which ones could pay lots of fine money. He was real tuff when he knew there was fine money to be had. He couldn’t use the excuse he was easy on Oppenheimer because they were broke and then hit them up for fine money. Not good pre-election strategy. So he went real easy on Oppenheimer to show wall street he was willing to play ball with them. Good pre-election strategy in NY. Is this the guy who is going to clean up NY politics?

  • john w

    Ditto.. on Cuomo’s apparently playing soft-ball with E*Trade, ( on Auction Rate redemptions ) they pleaded poor and probably paid him under the table with payola and women/sex. E*trade brokers in the fall of 2007 got an internal email which indicated that they start selling ARPS and other trash asap to high net worth clients..$25,000 and up.. right out of E*trade’s house account. These pond-scum brokers were all rewarded with big Christmas bonus in 2007 on this.

    What a bunch of crimminals that should all be in prison!

    E*trade is one of the broker low-lifes who continue to steal folk’s IRA money without consequence, so far.
    Etrade and the other holigans day of reckoning will come in one form or another.

    Time to start protesting in front of the CEO’s homes, like the labor unions.
    This is coming to head in this country, we are sick of them getting bailed out whith our tax money while they continue to steal our money.

    Start the non-violent revolution now, stop paying them on their credit cards, loans until they pay us.


    Google up ” consumer complaints about E*Trade ”

    endless abuse stories.

  • phil trupp

    It seems Mr. Cuomo is setting himself up as the next Elliot Spitzer, the former “Sheriff of Wall Street.” And he’s also shaking his fist at the entire New York legislative establishment. I suppose they are now cowering under their beds, trembling with fear. Yet Mr. Cuomo has sucker punched tens of thousands of New York residents by giving Oppenheimer what amounts to a pass on nearly $1 billion in deceptively sold auction rate securities. Earlier, he settled other ARS cases fair and square. But Oppenheimer gets to walk. Why? Does Mr. Cuomo believe the Oppenheimer investors he has overlooked are going to forgive him? Does he believe they have no friends, no influence, no word of mouth that will turn voters against him? It makes one wonder about Mr. Cuomo’s relationship to Bud Lowenthal, the man who heads Oppenheimer and who just happened to sell his ARS before the market crashed in 2008. What kind of a deal was struck between these two? Mr. Cuomo can talk tough (and, frankly, it sounds more like bluster.)But when the chips are down, he cuts questionable deals with a slippery broker-dealer, leaving consumers to bear the burden of an obvious fraud. It’s easy to talk tough: it’s the phony currency of politics. But the law of unintended consequences is real, and come November that law may find Mr. Cuomo looking for a new job.

  • Bud Zipstein

    I just wish Spitzer was still in office. He wouldn’t have gone easy on oppenheimer like cuomo.

    • phil trupp

      You are on the money. It’s a shame Spitzer stepped down. But who knows? I’ve heard talk that he might step into Cuomo’s shoes as AG. Spitzer has been on a media blitz of late and will soon have his own cable show. It would, however, be great to have him as AG. When Spitzer was in office, Wall Street “hated” him–and hatred from Wall Street is one of the highest honors one can achieve in this country. We tend to forget that Jefferson warned that banks are more dangerous to liberty than armies.

  • J. D.

    How do you think Cuomo’s case against Schwab will end? Will he make them pay up and not Oppenheimer? I wish Spitzer was back also. While he might have made some stupid personal decisions I always felt he watched out for us. Lowenthal and other top exec’s at Oppenheimer dumped their ars before the market tanked. Cuomo found nothing wrong with this. Galvin commented strongly on Oppenheimers unethical behavior. He didn’t press charges because he got Mass residents their money back. Cuomo got next to nothing back and failed to address their unethical behavior. Cuomo’s deal was so lopsided I don’t think he required them to say they either admit or deny the charges. It seems that Cuomo and Lowenthal’s idea on how to treat their constituents and clients are one in the same.

  • john w

    This shows how useless most Regulators are:

    last Dec. they were still investigating E*Trade, no response from them now.

    Wednesday, December 09, 2009 9:45 AM

    Thank you for your note. Pennsylvania on behalf of the NASAA Taskforce continues to investigate E*Trade.

    Carolyn W. Mendelson, Counsel
    Pennsylvania Securities Commission
    Division of Enforcement, Litigation and Compliance
    806 State Office Building
    300 Liberty Avenue
    Pittsburgh, PA 15222-1210
    Front Desk: (412) 565-5083
    Direct Dial: (412) 565-7519

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