January 20, 2012 – Crosby & Higgins LLP Pursues $3.5 Million Arbitration Claim Arising from the Sale of Pivot-4 Auction Rate Securities
January 20, 2012
Crosby & Higgins LLP has filed a $3.5 million arbitration claim against Oppenheimer & Co. Inc., before the Financial Industry Regulatory Authority (FINRA), stemming from the sale to a retail customer of certain highly complex Auction Rate Securities (“ARS”) backed by Credit Linked Notes (“CLNs”), which were specifically reserved for sale to Qualified Institutional Buyers (“QIBs”) as defined in Rule 144A of the Securities Act of 1933. According to the allegations in the Statement of Claim, Oppenheimer marketed the Pivot-4 ARS, which were issued through Deutsche Bank, as a suitable, fully liquid, cash management tool, without conducting even the most rudimentary due diligence with respect to the securities, which have now been illiquid and highly impaired for more than four years. The Statement of Claim alleges violations of numerous NYSE and FINRA Rules, including unsuitability, unauthorized transactions and failure to supervise, and includes claims for breach of fiduciary duty, fraud, negligence, and breach of contract. Claimant seeks $3.5 million in compensatory damages together with consequential and punitive damages. The evidentiary hearing is scheduled to take place in Los Angeles, California in April 2012.