Subscribe: RSS Feed | Twitter | Facebook | Email
Home | Contact Us

ARS Update: Lots of People Talking About Oppenheimer

Posted by Larry Doyle on January 12, 2012 10:06 PM |

Last we checked on the ARS crisis two months back, we learned that the crowd at Oppenheimer was on pace to repay its ARS holders over the next 50 years. Yep, 50 years. How swell.

Well, one lucky Oppenheimer customer will get her money back a lot sooner than that. Who might that be? 

Nicole Davi Perry.

How so? As the Wall Street Journal reported the other day, Panel Says Oppenheimer Must Buy Back $6 Million in Auction-Rate Securities:

Oppenheimer & Co. must buy back nearly $6 million in auction-rate securities from an investor, a Financial Industry Regulatory Authority arbitration panel has decided.

The investor, Nicole Davi Perry, alleged breach of fiduciary duty and negligence, among other claims, related to auction-rate securities she purchased in 2007 through the unit of Oppenheimer Holdings Inc. (OPY).

Oppenheimer in 2010 reached settlements with Massachusetts and New York regulators investigating the company’s marketing and sale of auction-rate securities.

Perry and her father, Ronald Davi, were seeking safety and liquidity but were never told what the instruments really were or the risks they entailed, said their attorney, Glenn Gitomer.

As is customary, the panel didn’t explain the reasoning for its decision, which was dated Thursday. It ruled that Oppenheimer must repurchase Perry’s New Jersey Turnpike Authority auction-rate securities for $5.98 million and pay her roughly $134,000 in attorneys’ fees.

“We disagree with the decision of the arbitration panel based on the testimony and evidence introduced at the hearing,” an Oppenheimer spokesman said.

Is that right, Oppenheimer disagrees? What a surprise.

Based on the countless numbers of other investors who have engaged me regularly over the last few years, they too maintain that ARS were sold to them by Oppenheimer while the firm breached its fiduciary duty and was negligent in the process. Why are ALL these investors held hostage? Why can’t this case serve as the precedent for the multitude of other Oppenheimer investors similarly mistreated?

I will share with the crowd at Oppenheimer, from Bud Loewenthal on down, that more and more people both inside and outside of your firm are increasingly enraged at the cavalier manner in which Oppenheimer has gone about refunding the ARS sold by your firm.

Many of these people have informed me that the expected refunding of ARS by Oppenheimer to be announced later this month can only be defined as a pittance.

Just as we were watching and highlighting on your 10Q from September 30th, Sense on Cents will continue to watch for other reports emanating from your firm. In fact, Sense on Cents does not have to watch all that closely because as I said a LOT of people inside and outside of your firm are watching closely and sharing a whole lot of info.

How many shares are you planning on refunding in the latest quarter? As few as people are indicating? Are you sure you really want to do that?

That might not look so good….


Is this really any way to run a business?

Questions and comments always encouraged and appreciated. Anybody from Oppenheimer have anything to say, especially about the testimony and evidence presented in the case referenced above? I am sure the many people who are talking about your firm would love to hear from you.

Larry Doyle

Isn’t it time to subscribe to all my work via e-mailRSS feed, on Twitter or Facebook?

Do your friends, family, and colleagues a favor and get them to do the same. Thanks!!

I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets, our economy, and our political realm so that meaningful investor confidence and investor protection can be achieved.

Recent Posts