DALLAS -- Texas-based Rauscher Pierce Refsnes has hired a trio of local investment bankers to expand into Oklahoma, giving market leader Stifel, Nicolaus & Co. a well-capitalized rival.

After years of looking for opportunities in Oklahoma, Rauscher executives said this week that they hired Paul and Greg Nieto, a father and son team that operated a financial advisory firm in Oklahoma City for eight years, and Steve McDonald, a financial adviser who has worked extensively with school districts while at Evan L. Davis Inc. in Tulsa.

Paul Nieto assumes the title of senior consultant, while Greg Nieto and McDonald are vice presidents.

Vince Matrone, senior vice president and manager of public finance for Dallas-based Rauscher, said the firm expects up to 100 clients to follow the trio to Rauscher. The clients are generally middle market issuers that have sold debt infrequently.

"We have looked at Oklahoma on and off as an opportunity if we have the right people on the ground," said Matrone, whose firm is a top-20 underwriter and financial adviser nationally. "We feel we have hired well-respected practioners."

Rauscher last year unsuccessfully tried to lure key bankers from St. Louis-based Stifel, but the effort failed at the last minute after the bankers accepted a counteroffer to stay. Previously, Rauscher had considered buying existing brokerages in Oklahoma.

Earlier this year, Rauscher hired away a municipal trader and two institutional salesmen from Boatmen's First National Bank in Oklahoma City to establish a beachhead in the state. With this week's announcement, the firm has 60 tax-exempt professionals working in Arizona, California, Oklahoma, Texas, and Florida.

Stifel Nicolaus has long been the target of many would-be market leaders, and the move by Rauscher comes as in-state competition has heightened. Last year, Stifel was Oklahoma's top-ranked senior manager with 27 deals totaling $ 601.2 million, or 30% of the $ 2 billion in municipals bonds underwritten.

Stifel also retained its position as the state's leading co-manager last year with 44 deals totaling $ 1.38 billion. However, Oklahoma City-based Leo Oppenheim & Co. Inc. was a close second with issues totaling $ 1.16 billion. One reason Leo Oppenheim has been so aggressive is that it named as its vice chairman former Stifel executive John Piercey, who brought along many clients from eastern Oklahoma.

Robert Lewis, chairman of Leo Oppenheim, said that he is not yet certain of how Rauscher's presence will affect his firm's business in Oklahoma.

"It's more common now for issuers to go to the state's bond adviser [a public office] and ask about their deals and then decide to go out for a request for proposal," Lewis said. "That is opening up some [clients] that have had relationships with other firms for a long time."

Stifel executives yesterday declined to comment on the new competition. Historically, the firm has fought aggressively to maintain and increase its market share against local, regional, and Wall Street competitors.

For instance, Dean Witter Reynolds Inc. two years ago planned to challenge Stifel's monopoly of a lucrative cash management program for Oklahoma schools and counties, but balked because of choppy market conditions. Stifel, however, proceeded with its program.

Rauscher's Matrone said that even though its new three-man Oklahoma City public finance team has worked extensively as financial advisers, the firm plans to pursue underwriting work.

"That's the second shoe in this plan," he said.

Paul Nieto, a veteran of the Oklahoma market for 40 years, said that as an independent, his firm lacked the necessary combination of strong institutional sales, technical support, and the $ 53 million in capital that Rauscher brings to the market.

"With this move, we're in a much better position to compete," said Nieto, adding that Rauscher can also take advantage of Oklahoma's rebounding economy. "There's a lot of real need for capital out there.

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