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Galvin alleges Oppenheimer was lax in preventing fraud

Investment banking firm Oppenheimer & Co. has been accused of unethical conduct in connection with the alleged bilking of $350,000 from the accounts of an elderly Fall River couple.

In an administrative complaint yesterday, Massachusetts Secretary of State William F. Galvin said the firm was lax in its oversight of a former broker, Stephen J. Toussaint, who is accused of fraud in the case on allegations he stole $350,000 from the account of William and Doris Pitera , even as William Pitera became ill and died .

Galvin's complaint portrays Toussaint as a rogue broker with a history of financial problems who was hardly monitored by his Oppenheimer supervisors. Oppenheimer, conversely, denies that allegation, even as it won a $162,000 judgment against Toussaint in a separate arbitration case it brought against him for nonpayment of a personal loan .

``We continue to believe that our firm's supervision in this matter was compliant with state and industry requirements," the company said . ``Moreover, we have been working to resolve these issues with representatives of the client for several months and will continue to do so."

The attorney for Pitera's widow disagrees. ``What the secretary's complaint amounts to is a corporate cover up in which they knew what was taking place but decided to ignore it," said William Jacobson , a Providence lawyer who represents Doris Pitera.

Toussaint could not be reached for comment, and calls to the attorney who represented him in the Oppenheimer arbitration, Michael R. Weissmann of Bingham McCutcheon LLP in Boston , were not returned.

According to the complaint filed by Galvin's office, the Piteras had an account with Oppenheimer once valued at as much as $2.9 million . Doris Pitera told Toussaint, the complaint says, that she did not want the securities bought with their money actively traded but Toussaint nonetheless made frequent trades on the account, racking up hundreds of thousands of dollars in commissions for his firm.

The complaint seeks an administrative fine against Oppenheimer, as well as compensation for the Piteras' losses.

Toussaint is also accused of forging 19 checks from the account, amounting to the stolen $350,000.

Keith Reed can be reached at

Correction: Because of a reporting error, a story in Thursday's Business section about investment banking company Oppenheimer & Co. being accused of unethical conduct by state securities regulators incorrectly identified attorney Michael R. Weissmann of Bingham McCutcheon LLP as representing Stephen J. Toussaint in an arbitration case. Weissman represented Oppenheimer & Co. in the case.

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