Superior Court Judge Frances McIntyre has denied brokerage firm Oppenheimer & Co.‘s request to impound hundreds of records that are key in a dispute with an ex-employee. The ex-employee is James Dever, who used to be a manager at the broker-dealer’s Boston office. Judge McIntyre found that public interest in the records “substantially outweighs” the financial firm’s interest in keep the documents in secret.
Oppenheimer has been especially invested in keeping two documents confidential. One document is ann internal memo about a 2004 audit involving the Boston branch. Dever has contended that he needs the document to prove that Oppenheimer hid facts for its own protection and so that it could blame him for the alleged financial fraud committed by broker Stephen J. Toussaint, who stole $135,000 from a couple of senior investors.
Dever says that Oppenheimer did not act upon his advice when in 2004 he pressed the brokerage firm to let go of Toussaint. The ex-Oppenheimer manager says that Oppenheimer fired him because he wouldn’t lie to regulators about the broker, who ended up in jail over a related case. Dever also says that no real audit took place in 2004, which is a claim that Oppenheimer has said is “baseless and without merit.”
He contends that because his name is linked to the Toussaint securities case, which Oppenheimer and its Albert “Bud” G. Lowenthal settled with Massachusetts for $1 million, he has had a hard time finding clients and work.
The case puts to the test the confidential arbitration system that has been set up to resolve disputes within the investment industry. Whether it is an employee or a customer is in a dispute with a brokerage firm, almost all disagreements with a brokerage firm have to go to arbitration.
Related Web Resources:
Judge tells Oppenheimer to reveal documents, Boston.com, December 21, 2010
Secrecy Order May Go Too Far, December 30, 2009
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