(The following is a reformatted version of a press release
issued by The U.S. Securities and Exchange Commission and
obtained via 
SEC Charges Former Oppenheimer Private Equity Fund Manager with
Misleading Investors about Valuation and Performance 
2013-160 Washington D.C., Aug. 20, 2013 -- The Securities and
Exchange Commission today charged a former portfolio manager at
Oppenheimer & Co. with misleading investors about the valuation
and performance of a fund consisting of other private equity
An SEC investigation found that Brian Williamson disseminated
quarterly reports and marketing materials to prospective
investors misstating that the valuation of the Oppenheimer
fund’s holdings was based on values received from the portfolio
managers of those underlying funds.  Williamson actually valued
the fund’s largest investment at a significant markup to the
manager’s estimated value.  He also sent marketing materials
reporting an internal rate of return that failed to deduct fees
and expenses.  As a result, the fund’s reported performance as
measured by its internal rate of return - a key indicator of the
fund’s performance - was significantly enhanced. 
Earlier this year, Oppenheimer agreed to pay $2.8 million in a
settlement of related charges. 
Investors deserve and the law requires honest disclosure about
how their investments are valued,” said Andrew J. Ceresney, Co-Director of the SEC’s Division of Enforcement.  “Williamson
improperly lured investors to the private equity fund he managed
by providing false and misleading information about the fund’s
According to the SEC’s order instituting administrative
proceedings against Williamson, he was an Oppenheimer employee
from 2005 to 2011.  Williamson marketed Oppenheimer Global
Resource Private Equity Fund I, L.P. to pensions, foundations,
endowments, and high net worth individuals and families.  From
September to October 2009, Williamson marketed the fund using
materials that reported an internal rate of return that did not
take into account any fees and expenses that the fund paid to
underlying fund managers or the additional fees and expenses
that the fund paid Oppenheimer.  Furthermore, Williamson
modified the Oppenheimer fund’s marketing materials in October
2009 by increasing the reported value of the fund’s largest
investment - Cartesian Investors-A LLC - from $6 million to
approximately $9 million.  This increase was a significant
markup to the underlying manager’s estimated value.
Nonetheless, the marketing materials falsely stated that
underlying fund values were “based on the underlying manager’s
estimated values.” 
According to the SEC’s order, Williamson made or approved
additional material misrepresentations that created the
misleading impression that the Oppenheimer fund’s increased
internal rate of return was due to increased performance or
third party valuations.  In fact, it was Williamson’s revised
valuation of Cartesian that resulted in a material increase in
the Oppenheimer fund’s reported performance.  For example, for
the quarter ended June 30, 2009, Williamson’s markup of the
Cartesian investment increased the reported internal rate of
return from approximately 3.8 percent to 38.3 percent. 
“Interim valuations are especially important when used to raise
funds in the private equity industry,” said Julie M. Riewe, Co-Chief of the SEC Division of Enforcement’s Asset Management
Unit.  “Private fund managers must provide investors with
accurate disclosures about valuation methodologies as well as
fund fees and expenses so they can make fully informed
investment choices.” 
The SEC’s order alleges that Williamson, who lives in Newtown,
Pa., willfully violated Section 17(a) of the Securities Act of
1933, Section 10(b) of the Securities Exchange Act of 1934 and
Rule 10b-5, and Section 206(4) of the Investment Advisers Act of
1940 and Rule 206(4)-8. 
The SEC’s investigation was conducted by Panayiota K. Bougiamas,
Joshua M. Newville, and Igor Rozenblit of the Enforcement
Division’s Asset Management Unit along with Jack Kaufman and
Lisa Knoop of the New York Regional Office.  The case was
supervised by Valerie A. Szczepanik.  Mr. Kaufman, Mr. Newville
and, Charu Chandrasekhar will lead the SEC’s litigation.  The
SEC acknowledges the assistance of the Massachusetts Attorney
General’s office. 
(bjh) NY 
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