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Oppenheimer’s Al Loewenthal: Better to Remain Silent and Be Thought a Fool…

Posted by Larry Doyle on March 15, 2012 8:06 AM |

Reactions I heard to the Jerry Maguire type bombshell launched by former Goldman exec Greg Smith ran the gamut yesterday.

There are those who questioned Mr. Smith’s sanity at committing career suicide. Others appreciated his airing of dirty laundry and “come to Jesus” expose. I personally believe if Mr. Smith wanted to lash out at those at Goldman who created the culture he came to detest, he may have been more laser like in his approach.

The hand grenade he launched into the Goldman camp was the equivalent of friendly fire and also hit plenty of very good people who work very hard to make an honest living everyday. I know very honest and very good people in the firm.

I welcome being the harshest critic of those who deserve to be called out. 

Mr. Smith makes some very good points which deserve to be aired, but painting an entire firm — and perhaps by extension the entire industry — with one broad brush is equally unfair.

Moving right along, not surprising that Goldman and Wall Street will look to sweep the residue of Mr. Smith’s bombshell under the rug very quickly. Damage control kicks in immediately, and the best form of that is very simply not to discuss the topic at hand.

We are not disappointed, though, as one Wall Street executive took the bait offered by Mr. Smith and put out a memo which I welcome highlighting.

Under the heading of Better to Remain Silent and Be Thought a Fool Than to Speak Out and Remove All Doubt, Investment News highlights, What Oppenheimer Boss’ E-Mail Said About the Goldman Op-Ed:

From: Lowenthal, Albert

Sent: Wednesday, March 14, 2012 8:04 a.m.

Subject: FW: NY Times Op-Ed (March 14, 2012)

Below is an Op-Ed article written by an employee (soon to be ex-employee) of Goldman Sachs. It is a scathing article about what the author claims to be the deteriorating culture at one of the largest and most influential investment banks on the planet. I have no firsthand knowledge of the truth or accuracy of the article, but it is an article that is likely to go “viral” on the internet and become a topic for our clients, and generate questions and issues that do not reflect our firm or most of the people who work in this industry.

At Oppenheimer, we work hard each day to support and service the investment needs of our clients. We do not trade against them and have not built a firm around a proprietary-trading book that requires our clients to lose in order for us to win. We largely act as agent and sit on the same side of the table as our clients. We benefit when they do. I am proud of the culture that we have built at Oppenheimer and do not believe that it needs defending either internally nor externally.

I think that it is important that you are aware of this article and understand the differences between what it says about Goldman and what and who we are here at Oppenheimer.

Standard corporate fare on behalf of a Wall Street executive? You may think.

Mr. Loewenthal may have wanted to think twice prior to writing this memo. Why is that? Well, let’s review some of the comments left at Investment News:

7:24 PM on 3/14/2012

When Smith describes a company that pushes “any illiquid, opaque product with a three-letter acronym,” he is precisely describing Lowenthal’s Oppenheimer, which dumped auction rate securities on its clients and has left retail clients frozen to this day.

Lowenthal could prove Oppenheimer’s distinction from Goldman Sachs by making its ARS victims whole today. How about it, Al?

8:03 PM on 3/14/2012

Amazing. The nerve. Oppenheimer is the worst firm out there in terms of how they helped their clients, or didn’t, regarding auction rate preferreds. Goldman quickly made their clients whole. Oppenheimer is hiding behind a horrible (for clients) settlement with NY AG and may NEVER redeem their clients. I’d be ashamed to work at oppenheimer. Albert is a liar and a cheat.

You cannot make this stuff up.

This said, I also know very good and honest people at Oppenheimer as well. They do not occupy the senior executive offices.

Would love to hear what people think of Mr. Smith’s bomb and Mr. Loewenthal’s response.

Navigate accordingly.

Thank you to the reader who brought this story to my attention.

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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.

For those who might appreciate the Jerry Maguire-Greg Smith clip….enjoy!!

Larry Doyle

  • Dave

    Lowenthal’s comment is insane. The leadership of that firm is criminal. And Larry, while you may know some good and fine people who work at Oppenheimer & Co., I do not. The dozen or so I’ve dealt with – from my original broker who falsified an email after the crash, to my new broker to the assistants and secretaaries I’ve communicated with, all come off as unethical, mean-spirited and, in some cases, downright stupid.

    • LD


      Thanks for sharing your insights.

      There may be harsher critics of Oppenheimer and its ARS fiasco than yours truly here at Sense on Cents, but I am right up there calling them out.

      The people I know there who are truly decent people deserve to be recognized as such. I am not saying I know a LOT of people at Oppenheimer, but the few I do know I hold in good regard.

      Just trying to be fair and even handed so we are not stuck with those who would paint all critics with one broad brush as well.

  • Here’s a comment almost everyone is going to find hard to believe. On the evening of March 14, I wrote a series of very sharp questions directed to Al Lowenthal in the comment section of INVESTMENT NEWS. After I hit the “submit” key, I walked away, and about 10 minutes later returned to check what I had written. To my utter surprise, I found that my comment had vanished. “This comment has been deleted,” was all that remained in the comment box. I was stunned. It’s the first time any blog has deleted something I’d written. After my surprise, I drifted into a mild state of fury, followed by the cold knowledge that freedom of expression INVESTMENT NEWS-style just may be subject to subjective limits. Why was my comment removed? Perhaps it was too detailed, too close to the fire, or perhaps INVESTMENT NEWS feared reprisal from Oppenheimer. I suppose I’ll never know the answer, but for the record readers of SENSE ON CENTS may wish to ponder this strange vanishing act. It causes me to question just how free are some of these industry blogs? Must we be careful not to offend sacred cows? Oppenheimer certainly isn’t the most attractive cow in the financial meadow, and by no stretch of the imagination is it sacred. As for Al Lowenthal, his actions regarding ARS hint at some lower form of life.

    • LD


      If you would like, please share your series of very sharp questions here. I can assure you that you will not be censored.

      • Mr. Lowenthal, a few questions, if you please:

        *Is it true you’ve socked away $40 million to handle the fines you expect to pay for continuing foot-draging your ARS buybacks?

        *Is it also the case that many of your brokers are stuck holding ARS, and that they have been informed from on high that they’ll need to wait “years” before being made whole? Maybe this is merely an ugly rumor, but still we’d appreciate an answer.

        *Is it true what insiders have claimed is your “delight” at having cut a “sweet deal” with former AG Andrew Cuomo, knowing in advance that he would soon move on and leave your ARS settlement to others, thus allowing you to drag out repayments?

        *What is your response to the allegation that your company, much like Goldman Sachs, is in the business of “extraction”? Does this word have a familiar ring to you?

        *Does it make you proud to poor-mouth your way around timely ARS settlements? And would you please comment on the numerous ARS arbitrations, the outcomes of which have forced you to relent under pressure and stick to the letter of the Cuomo agreement–piecemeal, of course.

        *Your “We’re Not Goldman” memo has become something of a bad joke. Do you really believe that many of your frustrated former and present clients are buying into this childish bravado?

        *Is it true that you allegedly dumped millions of dollars worth of ARS (quietly) from your personal portfolio less than two months before the market collapsed in 2008? How did you become so prescient? You certainly displayed brilliant market savvy, but then are we to suppose such clever trading is owed entirely to your razor sharp instincts?

        There are other question that might be asked, but, really, getting answers to the above will be a much-appreciated start.

  • Eric

    Albert Lowenthal should probably stick to the current problems at his firm instead commenting on others’. He made the Wall Street Journal last month for ongoing investigations by the SEC and Massachssetts Attorney General for potentially selling clients into existing PE funds with assets marked up more than 300% over their market trading value. That doesn’t seem to be in the best interests of Oppenheimer’s clients. Things got even better this month when Oppenheimer announced that there is now a criminal investigation underway by the US Department of Justice. Thanks for putting the entire PE industry under scrutiny Al.

    Private-Equity Fund in Valuation Inquiry

    U.S. Probes Fund Operated by Oppenheimer

  • Peter S.

    It certainly is not prudent to paint all with a broad brush, but given the daily onslaught of identified fraudulent, and/or, unethical business practices emanating from every crevasse of Wall Street, it is difficult to believe that Mr. Smith’s indictment of Goldman Sachs culture is not the norm rather than the exception. And to the point that not all employees of any one of the of the big investment banks that year after year pay hefty fines for bad behaviors that no admirable person would consider inflicting upon their neighbor – going along to get along just sweeps you up in the muck. Evil flourishes when good people do nothing. Obviously the response of Oppenheimer’s Lowenthal only confirms what many on Wall Street still don’t get – we no longer believe a word of the crap seeping out of any of their orifices, nor do we admire those that stand behind the leadership of a Lowenthal. Now if Oppenheimer would do the right thing and buy back the ARS securities that thousands of good neighbors were sold by the firm – that would be a step in the right direction. Buying back the ARS securities certainly would go a long way to help attract the trust of new clients – understandably, Oppenheimer’s former clients will never forgive them – nor should they.

  • Peter S.

    “In a memo to employees, Goldman Chairman and Chief Executive Lloyd C. Blankfein and President Gary D. Cohn wrote that Mr. Smith was one “of nearly 12,000 vice presidents” among more than 30,000 employees at the company.”

    I thought being a “Vice President” at a financial institution was a distinction. Obviously, Goldman Sachs’ having 12,000 “Vice President” out of 30,000 employees is just illusory.

    They just can’t help themselves – Wall Street honcho’s are clueless, and they say the darndest (damaging) things!

    Goldman Plays Damage Control

  • Peter S.

    “In a memo to employees, Goldman Chairman and Chief Executive Lloyd C. Blankfein and President Gary D. Cohn wrote that Mr. Smith was one “of nearly 12,000 vice presidents” among more than 30,000 employees at the company.”

    I thought being a “Vice President” at a financial institution was a distinction. Obviously, Goldman Sachs’ having 12,000 “Vice President” out of 30,000 employees is diluted.

  • mikaele

    Al,isn’t going to give everyone their money back because they are in a non underwriter loophole and Cuomo’s fake settlement has made it so. Stonewalled from the start and completely lied to about what these things were doesn’t mean much.
    They won’t because he doesn’t have to!
    If LD wasn’t on this I would only know of 6 people in this trap. Where is the list of everyone ripped of by Opp?
    Thanks LD

  • Dave

    Oppeheimer s a cancer on the brokerage industry. And if theres such a thing as karma, may God strike down Al Lowenthal. He deserves to die screaming alone in some hospital bed, suffering from a horrible disease and abandoned by friends a relatives. While this may sound callous, let me remind you that it has been the fate of several elderly Opco clients, who died without their money due to Lowenthal’s refusal to redeem auctions rates. he is a pox on society and no better than a Nazi war criminal.

  • Kathy

    Exactly right: Lowenthal confirmed he is a fool. His company treated its ARS clients the WORST of all companies, and continues abusing them to this day.

    But thanks to Mr. Lowenthal to calling attention to Oppenheimer while the public is reexamining Wall Street abuses. Maybe more attention will be paid to the morally reprehensible treatment of ARS victims by Oppenheimer.

  • Bill

    The only helping hand an abused investor will get from FINRA is when they lower the box.

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