Massachusetts Secretary Of State Targets Oppenheimer CEO Albert Lowenthal
In addition to filing securities fraud charges against Oppenheimer & Co. for inappropriate sales of auction-rate securities, Massachusetts Secretary of State William Galvin wants to revoke Oppenheimer CEO Albert Lowenthal’s broker-dealer registration license. According to the complaint, Galvin alleges that Lowenthal and other top executives “intentionally betrayed the trust of clients” by selling auction-rate securities to investors when the market for the instruments was on the verge of collapse.
Galvin’s administrative complaint also alleges that Lowenthal and other Oppenheimer senior managers sold millions of dollars in their own personal ARS holdings at least two weeks prior to the market’s February 2008 collapse. Meanwhile, they failed to give clients a heads-up of the trouble to come.
In the complaint, charges allege that Lowenthal sold nearly $1.8 million in auction-rate securities; Larry Spaulding, chief operating officer, sold $700,000; Greg White, director of Oppenheimer’s auction-rate securities division, sold $300,000 of his auction-rate securities, and $100,000 of his wife’s; and Louis Gelormino, a desk supervisor and senior vice president, sold $75,000.
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