Oregon had sued the firm for losses in the OppenheimerFunds Core Bond Fund, which the firm marketed as conservative but sustained $36 million in losses due to exposure to mortgage-backed securities. OppenheimerFunds said that “the settlement allows both the state and OppenheimerFunds to avoid a lengthy and expensive legal process and to apply resources to more constructive ends.”
In announcing the settlement, Oregon Attorney General John R. Kroger noted, “On average, class-action securities lawsuit settlements recover 3% of losses. In this case, a 3% recovery of the Core Bond Fund would mean just over $1 million. In contrast, the settlement with Oppenheimer will recover $20 million. This is 57% of the total losses in the Core Bond Fund, and 65% of the losses which a jury might fairly attribute to OppenheimerFunds’ conduct.”
Under the terms of the settlement, OppenheimerFunds does not admit any wrongdoing.