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Rating:OpFunds Settles Muni Bond Lawsuit Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, August 30, 2013

OpFunds Settles Muni Bond Lawsuit

News summary by MFWire's editors

OppenheimerFunds [profile] settled six lawsuits by municipal bond investors who alleged that they had unexpectedly large losses during the financial crisis due to improper investment by the Massachusetts Mutual Life Insurance unit, Reuters Jonathan Stempei writes. It agreed to pay $89 million.

Stempei writes that the unit has not admitted wrongdoing in this case.

All is not said and done, however, as U.S. District Judge John Kane has to approve the accord and a final settlement must allocate the money among fund shareholders, Stempei reports. The funds involved are Pennsylvania Municipal, Rochester National Municipals, New Jersey Municipal, Rochester AMT-Free New York Municipal, Rochester Fund Municipals and AMT-Free Municipals.

The investors say the funds failed to follow their rules and that the losses incurred weren't a "unforeseeable risk," citing the mexican peso devaluation, Asian financial strains, Russian bond default and September 11. Stempei reports.

As of June 2012, OppenheimerFunds had agreed to pay $354 million to settle SEC charges that it misled investors in regards to two taxable bond funds which saw huge losses during the financial crisis. It did not admit wrongdoing.

Oppenheimer has suffered a rash of lawsuits since the financial crisis. In 2009, Oppenheimer Funds settled a 529 suit with the state of Illinois for $77.23 million. Class action suits were filed against them in 2009, by Coughlin Stoia Geller Rudman & Robbins and Robbins Umeda, both in regards to the Oppenheimer Champion Income Fund.

To read more, click here.  

Edited by: Casey Quinlan


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