Oppenheimer Settles Champion Income Fund and Core Bond Fund Suits for $100 Million
After protracted settlement talks and mediation, the parties involved in the consolidated subprime mortgage related lawsuits against Oppenheimer Funds have announced that they have settled the case for $100 million, as reported by Investment News and Bloomberg. The lawsuits were brought by investors who had invested in the Oppenheimer Champion Income Fund and the Oppenheimer Core Bond Fund alleging that the offering documents were misleading and they contained misrepresentations regarding the risk involved since they were heavily allocated in mortgage backed securities (MBS), credit default swaps (CDO) and other complex securitized investment vehicles.
After months of discussions and extended mediations it was agreed that the settlement amount would be $100 million. In further negotiations, the parties hammered out how the settlement would be split between the investors for the two funds. Finally, it was agreed with the mediator’s assistance that the split would be 47.5% ($47.5 million) for the Core Bond Class and 52.5% ($52.5 million) for the Champion Income Fund Class.
In a related matter, Schwab settled its subprime mortgage related Schwab Yield Plus case previously for a reported $235 million.