Oregon AG probes OppenheimerFunds over college funds handling

Chris Rizo Feb. 2, 2009, 4:30pm

John Kroger (D)

Ben Westlund (D)

SALEM, Ore. (Legal Newsline)-Oregon Attorney General John Kroger's office has expanded its investigation of declines in portfolios in the Oregon 529 College Savings Network, which allows families to invest for college and receive tax breaks.

Initially, the attorney general's office probe was focused on OppenheimerFunds Core Bond Fund, but the investigation has widened to include the OppenheimerFunds Limited Term Government Bond Fund, at the request of fellow Democrat state Treasurer Ben Westlund.

Last year, Oregon's college savings program saw its aggregate value decline by nearly 25 percent, to about $770 million, the treasurer's office said.

"As an Oregonian and a parent, I want to make sure that our state has the nation's best college savings program," Westlund said in a recent statement. "That means taking a hard look at the funds that are offered, increasing information and options for Oregon families, and surveying the marketplace to see if we are getting the best deal possible."

The attorney general has issued subpoenas to help determine if OppenheimerFunds Inc. violated state law by failing to disclose to state officials changes it made in investment strategy.

Kroger is coordinating the investigation with attorneys general in Illinois, Maine and New Mexico - states that included OppenheimerFunds Core Bond Fund as part of their 529 college savings plans.

The board that oversees Oregon 529 College Savings Network last month dropped the two Oppenheimer funds from the state's network.

The Oregon 529 College Savings Network allows families receive a state tax deduction of as much as $4,000 a year.

From Legal Newsline: Reach reporter Chris Rizo at chrisrizo@legalnewsline.com.

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