November 23, 2008
Massachusetts Securities Division Charges Oppenheimer in ARS Downstream Sales and Inside Trading
The Massachusetts Securities Division brought an administrative complaint charging Oppenheimer & Co. and several of its executives with violations of the Massachusetts securities law in connection with its "downstream" sales of auction rate securities (ARS). The complaint alleges that Oppenheimer significantly misrepresented the nature of the ARS and the overall stability and health of the ARS market when marketing the product to its customers. In addition, key Oppenheimer executives sold their own ARS when they learned the market was in danger of imploding, without disclosing this information to investors. Specifically, the complaint alleges that CEO Albert Oppenheimer sold $1.77 million of his personal holdings in January and February 2008, and Greg White, Managing Director of ARS Dept., sold $400,000 of his own and his wife's business ARS holdings in the same time period.
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