$100M Settlement Reached in Oppenheimer Funds Case
Oppenheimer Funds has agreed to pay $100 million to settle allegations that it mismanaged its mutual funds, according to Investment news. The case which is filed in Denver, Colorado involves investors in Oppenheimer Champion Fund and Oppenheimer Core Bond Fund and a hearing to approve the settlement is set for September 30, 2011.
According to court documents, it was alleged that Oppenheimer marketed and sold the funds as diversified, higher yielding funds that were suitable for a retirement plan portfolio when, in fact, the funds were considerably more risky than portrayed because they took huge bets on mortgage backed securities (MBS) and illiquid derivatives that led to the demise of the funds.
Under the terms of the settlement, Champion investors will get $52.5 million and Core Bond investors will get $47.5 million, less attorneys' fees. The plaintiffs' lawyers are asking the court to approve a fee of 25% of the settlement amount.
The cases are In Re Oppenheimer Champion Securities Fraud Class Actions, 09CV386 and In Re Core Bond Fund, 09CV1186, U.S. District Court, District of Colorado (Denver).