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Oppenheimer Wins Dismissal of Pension Plan Suit Over Fund

March 1 (Bloomberg) -- Oppenheimer & Co. won dismissal of a lawsuit brought by two Massachusetts pension plans that claimed Oppenheimer misled investors by inflating the value of a fund’s holdings.

U.S. District Judge Rya Zobel in Boston dismissed the complaint yesterday, saying federal securities-law claims can’t proceed because the investments were made through private transactions rather than a public offering.

The retirement boards of Brockton and Quincy had sued over Oppenheimer Global Resource Private Equity Fund I and its investment in a fund called Cartesian Investor-A, according to the complaint. Cartesian’s assets were shares in S.C. Fondul Proprietatea SA, which Romania created to compensate citizens whose property was seized under the former Communist regime.

The pension plans claimed that in an “aggressive marketing campaign,” Oppenheimer changed the valuation method for the Cartesian holdings, which caused the stated return of the Oppenheimer fund to be “vastly overstated.”

Representatives for the retirement boards and New York-based Oppenheimer couldn’t immediately be reached yesterday after regular business hours for comment on the judge’s ruling.

Oppenheimer Holdings Inc. said in a regulatory filing last year that the company had responded to information requests from the U.S. Securities and Exchange Commission and the Massachusetts Attorney General’s office about an “alleged overvaluation in the fall of 2009 of a single portfolio holding” in the Oppenheimer global resource fund, as well as certain marketing practices.

Oppenheimer also received a notice from the U.S. Attorney’s Office in Boston that the office intended to seek information about the matter, according to the filing.

The case is Brockton Retirement Board v Oppenheimer Global Resource Private Equity Fund I LP., 12-cv-10552, U.S. District Court, District of Massachusetts (Boston).

To contact the reporter on this story: David McLaughlin in New York at

To contact the editor responsible for this story: John Pickering at

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