A Message From Attorney General John Kroger
Dear Friends,
One of my highest priorities as Attorney General is to aggressively pursue fraud that harms Oregonians. That is why I am pleased to announce that Oregon has reached a major $20 million settlement with OppenheimerFunds. We expect recovered funds to be deposited in investor’s accounts in early 2010.
As you may know, many Oregon families prudently invested in the Oregon College Savings Plan to help set aside money for their children’s education. The Oppenheimer Core Bond Fund, offered as part of the College Savings Plan, was supposed to be a "conservative" investment that would safely increase in value. Instead, the Core Bond Fund lost over 35% of its value last year. This was clearly an exceptional situation, as similar funds in the same investment class only lost an average of 5 percent in 2008.
Now, we are recovering $20 million of those losses.
Here are some of the facts:
- On average, class action securities lawsuit settlements recover 3 percent of the losses. In this case, a 3 percent 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 percent of the total losses in the Core Bond Fund, and 65% of the losses which a jury might fairly attribute to OppenheimerFunds’ conduct.
- Most class action lawsuits take years to conclude. Treasurer Ben Westlund and I opened our investigation in January 2009 and filed suit against Oppenheimer in April 2009. This announcement marks less than 9 months from the start of the investigation to the settlement. If we took this case to trial, we might not have seen any result for years.
- Plaintiffs in securities litigation often wait for years before they recover their losses, but time is short when it comes to financing your child’s college education. Assuming Oppenheimer fulfills its end of the deal, Oregon families can expect to see their share of the settlement credited back to their accounts by the end of February 2010.
I am very proud of our work to seek justice for Oregonians and their families. If you were affected by this case or have any questions about your account, please contact the Oregon College Savings Plan at 1-866-772-8464.
Sincerely,
John R. Kroger
