Documents in Case of Ex-Oppenheimer Manager Who Was Fired for Cooperating with Elder Financial Fraud Probe Shed Some Light on What Goes on in Private Arbitration

Even though former Oppenheimer manager James F. Dever won a $74,000 award over his dismissal at the brokerage firm in private arbitration, he has pushed to have the records from the case made public. Dever contends that he was fired because he cooperated with the state in its probe of an Oppenheimer broker who stole money from an elderly couple. In December, a judge granted his request, and over 1,600 documents were made public, creating a rare opportunity for seeing what goes on in private arbitration within the financial industry.

The Boston Globe reports that according to the documents, a banker contacted Oppenheimer’s general counsel in 2004 to let the firm know that Stephen J. Toussaint was depositing checks from an elderly couple’s Oppenheimer account and putting the funds in his own account. Dever was told to investigate the matter—even though the authorities or an Oppenheimer attorney should have been contact.

After discovering that Toussaint had stolen at $350,000 from the elderly couple, Dever pushed to get the broker fired, but the latter stayed at Oppenheimer for another year.

The FBI would later indict Toussaint with an 11-count fraud indictment in February 2007. Meantime, Dever cooperated with the Massachusetts Securities Division’s probe. The state would go on to charge Oppenheimer with unethical and dishonest conduct and failing to supervise the broker. Its CEO, and Dever’s boss, Albert “Bud’’ G. Lowenthal, was also charged in the securities fraud case. Oppenheimer settled with the state over the Toussaint case for $1 million. Lowenthal also settled.

Dever, who had launched Oppenheimer’s Boston office, says his reputation in the financial industry has been damaged because of his firing and his career has experienced severe setbacks as a result. He also says that he sustained financial losses because of the legal costs he has incurred during the last few years because from case. Meantime, Oppenheimer maintains that it wasn’t getting back at Dever when he was at first demoted in the summer of 2007 and then given six months to leave the brokerage firm.

Related Web Resources:
Oppenheimer fight proves costly for ex-manager, Boston.com, January 18, 2011

Administrative Complaint: In the Matter of Oppenheimer and Co. and Stephen J. Toussaint

Massachusetts Securities Division

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