SEC Whacks Oppenheimer for $2.8 Million

     WASHINGTON (CN) – Oppenheimer Asset Management will pay $2.8 million to settle charges it misled investors about the performance of a private equity fund it manages, the SEC said.
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     “An SEC investigation found that Oppenheimer Asset Management and Oppenheimer Alternative Investment Management disseminated misleading quarterly reports and marketing materials stating that the fund’s holdings of other private equity funds were valued ‘based on the underlying managers’ estimated values.’ However, the portfolio manager of the Oppenheimer fund actually valued the fund’s largest investment at a significant markup to the underlying manager’s estimated value, a change that made the fund’s performance appear significantly better as measured by its internal rate of return,” the SEC said in announcing the settlement.
     Also Monday, the Massachusetts Attorney General’s Office announced a parallel settlement and financial penalty of $132,421 against Oppenheimer, according to the SEC.
     The SEC said in its statement that “for the quarter ended June 30, 2009, the portfolio manager’s markup of OGR’s Cartesian investment increased the internal rate of return from approximately 3.8 to 38.3 percent.”

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