Brian Williamson, a former Oppenheimer & Co. money manager, agreed to be barred from the securities industry for at least two years and pay a $100,000 penalty for allegedly making misrepresentations about the valuation of a fund he managed.
The U.S. Securities and Exchange Commission had accused him of sending investors marketing materials in 2009 that marked up the value of holdings and didn’t include the effect of fees and expenses on returns. Williamson didn’t admit or deny the agency’s allegations in settling, the regulator said today in a statement. The fund invested in private-equity funds.
He marketed the vehicle, Oppenheimer Global Resource Private Equity Fund I LP, to pensions, foundations, endowments and wealthy investors, according to the SEC’s administrative claim in August. He changed the value of its largest holding, Cartesian Investors-A LLC, to about $9 million in 2009 from the $6 million estimated by Cartesian’s manager, the SEC said. Marking up Cartesian boosted a reported internal rate of return to more than 38 percent from 3.8 percent in the quarter ended June 30 that year, the agency said.
“Investors rely on truthful and complete disclosures about valuation methodologies and fund fees and expenses, especially when committing to a long-term private-equity investment,” said July Riewe, co-chief of the SEC enforcement division’s asset-management unit.
Marketing materials for Williamson’s fund had said values for its holdings were “based on the underlying manager’s estimated values,” according to the SEC’s claim. Williamson based the change for Cartesian on a different valuation for its stake in Romania’s Fondul Proprietatea SA, the agency said. Oppenheimer agreed to pay $2.8 million last year to settle a related SEC case, the agency said.
“Brian and his family are pleased to have put this unfortunate matter behind them,” Williamson’s attorney, Andrew Levander, said in a statement. “Brian is proud of the track record of the investments that were made on his clients’ behalf, including what remains, at today’s trading prices, a profitable investment in Fondul.”