A Financial Industry Regulatory Authority arbitration panel says that Oppenheimer & Co. has to pay US Airways Group Inc. (LCCC) $30 million for losses that the latter sustained in auction-rate securities. The securities arbitration case is related to the airline group’s contention that the financial firm and one of its former brokers misrepresented certain ARS that were structured and private placement.
US Airways had initially sought $110M in compensatory damages and $26 million in interest and legal fees. The FINRA panel, however, decided that Oppenheimer and its ex-broker, Victor Woo, owed $30 million—Woo’s part will not be greater than what he made in commissions. Oppenheimer is now thinking about whether to submit a motion to vacate the arbitration panel’s order.
The financial firm is, however, going to go ahead with the arbitration it had filed against Deutsche Bank (DB) to get back the award money and associated costs from this case. Oppenheimer’s claim against Deutsche Bank is linked to the US Airways case but became a separate proceeding in 2010.
Oppenheimer contends that if any ARS misrepresentations were made to US Airways the source of blame is Deutsche Bank and its auction process, as well as on the credit ratings that were issued by Standard and Poor’s and Fitch Ratings.
ARS are debt instruments with interest rates that are supposed to reset during auctions that occur on a monthly, weekly, or daily schedule. Many investors were unpleasantly surprised to find that their money became frozen when a number of auctions failed in 2008. They claim they were told that the securities were liquid and safe like cash.
You want to speak with an experienced ARS law firm that knows how to successfully handle this type of securities case.
Oppenheimer Ordered to Pay US Airways $30M, The Wall Street Journal, February 1, 2013
More Blog Posts:
Oppenheimer & Co. Must Buyback $6M in Auction-Rate Securities from Investor, Says FINRA Arbitration Panel, Institutional Investor Securities Blog, January 11, 2012
Oppenheimer Funds Investors Can Proceed with Their Securities Fraud Lawsuit, Stockbroker Fraud Blog, November 19, 2011
Investors in Oppenheimer Mutual Funds Considering Opting Out of $100M Class Action Settlement Have Until August 31, Institutional Investor Securities Blog, August 6 2011