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Oppenheimer: Do the Right Thing, Redeem Your Auction-Rate Securities

Posted by Larry Doyle on June 30, 2010 5:14 PM |

Q: Which full-service brokerage firm has NOT redeemed their clients stuck in auction-rate securities for the past 28 months?

Goldman Sachs, Morgan Stanley, Citigroup, Wachovia, Bank of America, Oppenheimer, TD Ameritrade, Fidelity, Merrill Lynch, UBS?

A: Oppenheimer & Company is the only one of these institutions that has not redeemed their private clients’ Auction-Rate Securities that were fraudulently marketed as “just like cash.”


On behalf of auction-rate securities investors everywhere, I am happy to run this ad here at Sense on Cents!! This specific ad was submitted by a group of Oppenheimer clients.


  • John W


    they have done less than nothing

    • Liz

      Larry, please, please, please add E*TRADE and Charles Schwab to your list of firms that have REFUSED to redeem ARPS for the past 2+ years. E*TRADE “IS” a full service brokerage and they market themselves that way.


      We were supposed to get our principle back at any time, on seven days notice, according to my E*TRADE broker at the time of sale. There was no stipulation made at the time of sale that redemption of my money was contingent upon “anything.” Instead it was marketed as a completely safe investment. THEY ARE CRIMINALS AND MY LIVELIHOOD (AND ALL OTHER ARP’S VICTIMS) IS AT RISK ON ACCOUNT OF THIS CORRUPTION…

      • Sam

        E trade is not a full service brokerage. The brokerage maintains that clients came to it and requested ARS. While this is very unlikely, it still is a discount brokerage, like Schwab, and thus it’s harder to prove they pushed ARS. Oppenheimer & Co. is a full service brokerage. I paid just as much to invest as clients who invested through Goldman or UBS. Bring the full service brokers to justice

        • LD

          I do not pretend to be lawyer, judge, and jury when it comes to ascertaining the total measure of culpability in the distribution of ARS. My inclusion or exclusion of any individual names should not necessarily connote any special knowledge on my part as to the relative degree of guilt, innocence, negligence, or incompetence.

          My hope is that by Sense on Cents’ highlighting the travesty surrounding ARS, that those relative measures can be ascertained.

      • John W

        I am with Liz, 100%

        E*TRADE has always billed itself as a full product/service provider, since 2006 anyway. E*trade is pur scum in a septic tank and a bunch of liars and crooks, imo.

        Who the hell would have called them up and said buy me a bunch of those ARPS that never mature, your CEO sold out of his own account in Oct 2007, and FINRA unloaded in the summer 2007. E*Trade actively promoted the ARPS to me as well, the trade confirm even says “SOLICITED” by broker own admission.
        In the summer of 2007 they even proudly announced that they had joined “Bond Desk” to facilitate ARPS trading and make availabe to their client base. A bunch of dirt balls.

        The E* in their name stands for egregious, and the ETurd baby needs a diaper change.

        • Sam

          I think “solicited” on a sell form like that means that you came to them and asked for the security.I’m not sure. Maybe someone else can step in here who knows for sure? When I call my broker and ask for a stock thethe receipt reads “solicited.”
          That does not mean what E trade did is ethical or even legal! Of course nobody is going to come to them and ask for this obscure investment called ARS. But — I think you’re barking up the wrong tree if you use “solicited” on a sell form as your argument. That info helps the other side.

          • raccoon

            “SOLICITED” printed on a trade confirm paper or electronic means that is was the broker’s recommendation and idea initiated by the broker. This is opposed to the vast majority of trades that are self-directed and placed on the web now. So solicited means the broker and NOT the customer came up with the buy, or sell for that matter idea.
            No such thing as a customer soliciting a broker, unless of course it is meant in a sexual sense, and in that case of course a broker will always screw you.

  • John W



    • liz

      John W,

      Did you ever get your money back? Did you win your lawsuit?
      I’m hoping so!!

      I’m still stuck in my ARPS but still fighting the fight. I’ve been attending shareholder meetings and making my opinions known. Blackrock finally redeemed my arps (but I held the least with them) Pimco and Van Kampen continue to hold my money…

  • Mark

    John W.,

    As bad as E trade is, they are not a full service brokerage. Oppenheimer is evil. So is E trade. But it’s a different story, this is about fulls ervice.

    • John W

      E*trade had a formal FA desk in fixed income at that time,( late 2007) and billed themselves as advisors for “wealthy” “platinum” level clients. My trade confirmation on this stuff is even “solicited” by them.
      I and other were considered “private” clients. They actively promoted and sold these things as cash just as Oppenheimer.
      They openly admitted it was advice.

    • ARPS investor


      E*TRADE is absolutely a FULL Service Provider. I used to work there and they are very clear on that point. They should be as equally culpable as all of the other firms that fraudulently marketed these ARPs.

  • jim

    Please add Raymond James to this list!

  • Ronnie G.

    Oppenheimer executives should be in prison, in my opinion. This was nothing short of an Enron type of dirty dealing and Cuomo let them off easy. Go to hell Oppenheimer & Co. Go to hell, Cuomo. You’ve both lost a longtime supporter.

    • stan

      I agree with you. Oppenheimer mgt should all suffer in pain in the fraud they have created. cuomo will suffer plenty. where is our govt. oppenheimer is paying off someone. How can innocent clients not be redeemed of ars like all other firms. Why preferential treatment for oppenheimer. how about the truth. oppebheimer is ruthless.

  • JMan

    I too have waited for over two years to get my money, my story has the added pressure of having to borrow money against these illiquid bonds to cover money earmarked for taxes. OPCO was informed that some of the money they were “protecting” for me had to be sent to the IRS by April 2008.
    Every month I lose money by having to sell stocks/bonds at a loss to cover the interest payment.

  • Steve

    Larry, as a client of Oppenheimer’s with a significant amount of frozen ARPs, I appreciate all your efforts. Please keep up the good work!

  • phil trupp

    Oppenheimer isn’t in the business of doing the right thing unless forced to do so, and Mr. Cuomo’s efforts are hardly in the realm of force majore.

    To the companies mentioned above–E*Trade, Raymond James–add Charles Schwab.

    Let’s not forget that the ARS scandal isn’t just another of the ongoing corrupt bankster crimes; it is emblematic of an industry so deeply troubled that it has lost all sense of its mission in a presumably civilized society. Yet Oppenheimer stands out because of its slip-and-slide machinations: taking up residence from Canada to the U.S.; taking on bank status; applying to various U.S.-run bailout mechanisms which it likely knew were unsuitable to fit the problem; crying poverty while making new hires and expanding into Asia; running expensive TV commercials in search of chumps who might believe its credo that “Oppenheimer, The Right Way to Invest.” And all of this coming with a wink to stockholders who may have worried that the company might take a fatal beating on a redemption of nearly $1 billion in auction rate paper.

    Enter Cuomo. He cut a deal that infuriated New Yorkers and perhaps will come to haunt him when he runs for governor of that state. Oppenheimer has convinced the AG that it is barely limping, financially, despite its public crowing of a solid second quarter and a handsome dividend. We have to wonder why Mr. Cuomo drank the Kool-Aid; he is, after all, a sophisticated prosecutor who forced other major banks and brokerages to redeem $64 billion in auction paper, after which he appeared to fade from the scene,as if it was old news. Why?

    In the face of Oppenheimer’s own proclamations of profitability, Mr. Cuomo has stood aside and allowed the company to continue its cruel, though hardly unusual, gamesmanship. If the AG’s confrontation of Oppenheimer is deemed legal, it surely cannot be considered proper or even-handed.

    Much of the public has forgotten that anywhere between $120-$150 billion in ARS remain under some form of challenge. And this challenge isn’t just “all about the money.” The human equation, the hardship endured by unredeemed ARS victims, especially seniors, has been ignored.

    The deception, the game playing, the ongoing indifference and lack of courage will come back to bite Oppenheimer and the soulless industry it represents in ways we can’t yet imagine.

    As for Mr. Cuomo, good luck at the polls in November. ARS victims will remember the deal you cut on behalf of Oppenheimer and your lack of appreciation for the suffering it has caused to investors.

    • LD


      You continually enlighten all of us with your depth of knowledge and understanding on this and many other issues. Thank you very much for your strong ‘sense on cents.’

  • Wink

    I’ll add to the above the rude, hostile treatment I’ve received at the hands of Oppenheimer. They’re just mean, bitter people who have no regard for clients. Why would anyone ever invest a nickel with Oppenheimer when here on this page you have a list of firms who do the right thing for their clients?

    For the uninformed, the Massachusetts complaint vs. Oppenheimerasserted that senior management sold their own prive ARS holdings upon hearing that the auction rate market was tanking, and neglected to notify their clients. Is this who you want managing your money? Since the meltdown I moved money to 3 of the brokerages listed above and all have been above board and ethical. AVOID OPPENHEIMER LIKE THE PLAGUE.

  • John W


    I’ll add to the above the rude, hostile, intransigent, incompetent, hostile treatment I’ve received at the hands of E*Trade. They’re just beyond mean, bitter stupid people who have no regard for clients. Why would anyone ever invest a penny with them ? They have even threathened me in reverse to “shut up” and go away.. but I can’t they have 2 ARPS frozen in my IRA and no other firm will accept them in.
    E*trade only redeems crap to its cleints.

    Their so-calll CEO Crook Extra-Ordinary sold ARPS out of his own account and E*trade house account in Oct 2007, yet hyped them off on their clients in December 2007.
    ( Per several suits filed )

    FINRA is also full of sheet.

    For the uninformed, the Massachusetts complaint vs. Oppenheimerasserted that senior management sold their own prive ARS holdings upon hearing that the auction rate market was tanking, and neglected to notify their clients. Is this who you want managing your money? Since the meltdown I moved money to 3 of the brokerages listed above and all have been above board and ethical. AVOID OPPENHEIMER LIKE THE PLAGUE.

    Honestly the only way we are going to get attention on this is to all ally and march on Congress.

  • raccoon

    Look at this profile on Mary Schapiro, shows her for the corrupt in bed with brokers & fat cats she really is

    Just Brilliant statement… huh ?

    In October 1993, Schapiro gave a speech in Lugano, Switzerland, “The Derivatives Revolution and the World Financial System,” concerning potential regulation of the unregulated derivatives market in which she cited “the benefits to financial innovation that may result from a more flexible regulatory paradigm,” and stated that she was “not convinced that consolidated regulatory supervision of securities firms and their affiliates is necessary or appropriate at this time.”[9]

    no wonder FINRA & the SEc are as useless as teats on a boar hog, due to “leadership” like hers.

  • Kathy

    Now, everyone who has commentd here, please use the power of web, and click on the icon at the top of Larry’s post to “SHARE.” Use whatever social media you prefer, but tell others. ARS fraud has been covered up too long.

  • ARPS investor

    E*TRADE, Blackrock, Pimco, and Van Kampen are corrupt and evil institutions. They are morally void and have no conscience to do the right thing of their own volition by REDEEMING their fraudulently sold ARPS. They are potentially putting peoples lives at risk by threatening people’s financial security and well being. I am scared to death about the outcome of this situation. It’s surreal. I’m incredulous that 2+ years later no governing agency has rectified this situation and forced these corporations to REDEEM. If the market continues to tumble, perhaps this will force them to have some further redemptions… I WILL NEVER INVEST AGAIN…

  • mikaele

    Cuomo’s deal ain’t that bad! You will all get your Opco money back…..when your 150 years old.

  • mikaele

    CEO of Pimco has a blog on huff post. ask him if he wants to buy some arps.

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