BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced a $2.8 million settlement on Monday with Oppenheimer Alternative Investment Management LLC and Oppenheimer Asset Management Inc. to resolve the alleged misleading of investors.
Coakley's office and the New York Regional Office of the Securities and Exchange Commission alleged that Oppenheimer disseminated misleading quarterly reports and marketing materials stating that its private equity fund was based on the estimated values of the underlying managers. Oppenheimer's portfolio manager allegedly valued the fund's largest investment significantly higher than the managers' estimated value, which inflated a key performance metric from 3.8 percent to close to 40 percent.
Under the terms of the assurance of discontinuance, Oppenheimer will pay investors around the country more than $2 million, including approximately $200,000 to the city of Quincy's pension fund and $150,000 to the city of Brockton's pension fund. Oppenheimer will also pay more than $130,000 as a statutory penalty to the state and make changes to its internal controls and valuation policies.
"Our office is pleased to be able to recover this money for investors, especially for the Massachusetts cities that were affected," Coakley said. "We appreciate the cooperation of the SEC in this investigation and will continue to ensure that investors' rights are protected from unfair and fraudulent practices."
As part of the settlement, Oppenheimer must appoint an independent compliance consultant to review the company's internal policies and make changes to make sure the company's system more effectively prevents the dissemination of misrepresentations and deceptive information in the future.