Bloomberg News

Oppenheimer Reaches $2.8 Million SEC Accord Over Fund

March 11, 2013

Oppenheimer & Co. (OPY:US) agreed to pay about $2.9 million to settle claims by the U.S. Securities and Exchange Commission that it misled investors in a private-equity fund.

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 today. The company also reached a settlement with Massachusetts 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.

Two Massachusetts pension plans sued Oppenheimer over investments in the fund, claiming Oppenheimer had inflated the value of the fund’s holdings. That lawsuit was dismissed by a federal judge in Boston.

Oppenheimer will pay $2.3 million to investors, including about $350,000 total to the pension funds that sued, according to the SEC and Coakley’s office.

Brian Maddox, a spokesman for New York-based Oppenheimer, said the company had cooperated with the SEC and the Massachusetts Attorney General’s Office during the investigation.

“Oppenheimer Asset Management believes it has put in place additional policies and procedures designed to ensure that valuations of portfolio positions in its marketing documents are determined in a manner consistent with its obligations to investors,” Maddox said in a statement.

To contact the reporter on this story: David McLaughlin in New York at

To contact the editor responsible for this story: John Pickering at

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Companies Mentioned

  • OPY
    (Oppenheimer Holdings Inc)
    • $23.27 USD
    • 0.07
    • 0.3%
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