Firm settles claims it misled fund investors

FORT WORTH, Texas – Oppenheimer & Co. agreed to pay about $2.9 million to settle claims by the U.S. Securities and Exchange Commission and the Massachusetts attorney general that it misled investors in a private-equity fund, Bloomberg News reported last week. More

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Firm settles claims it misled fund investors

Posted 3/18/13

FORT WORTH, Texas – Oppenheimer & Co. agreed to pay about $2.9 million to settle claims by the U.S. Securities and Exchange Commission and the Massachusetts attorney general that it misled investors in a private-equity fund, Bloomberg News reported last week.

Two Massachusetts pension plans sued Oppenheimer over investments in the fund, claiming Oppenheimer had inflated the value of the fund’s holdings.

The portfolio manager of the Oppenheimer fund valued its largest investment at a “significant markup” to an estimated value, the SEC said in a statement. The company also reached a settlement with Mass. Attorney General Martha Coakley for about $132,000.

The settlement stems from Oppenheimer Global Resource Private Equity Fund I LP, which invests in other private-equity funds, and an investment in Cartesian Investors-A LLC, according to the SEC. The valuation markup increased the internal rate of return from 3.8 percent to 38.3 percent, for the quarter ended June 30, 2009, the regulator said.

Under the terms of the settlement, Oppenheimer will pay investors nationwide more than $2 million, including approximately $150,000 to the city of Brockton’s pension fund, $200,000 to Quincy’s pension fund, and a statutory penalty of more than $130,000 to Massachusetts. •

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