The Securities and Exchange Commission today charged OppenheimerFunds Inc. and its sales and distribution arm with making misleading statements about two of its mutual funds struggling in the midst of the credit crisis in late 2008.

Specifically, the SEC’s investigation found that Oppenheimer used derivative instruments known as total return swaps to add substantial commercial mortgage-backed securities exposure in a high-yield bond fund called the Oppenheimer Champion Income Fund and an intermediate-term, investment-grade fund called the Oppenheimer Core Bond Fund. According to the SEC, the 2008 prospectus for the Champion fund didn’t adequately disclose the fund’s practice of assuming substantial leverage in using derivative instruments.

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