OppenheimerFunds Faces More Litigation

The complaint, filed in the United States District Court for the Southern District of New York, charges the Champion Fund, OppenheimerFunds, and certain of its officers and directors with violations of the Securities Act of 1933 and the Investment Company Act of 1940, according to a press release.

Specifically, the law firm charges that the Champion Fund began to alter its investment style in late 2006, significantly increasing its risk in the hopes of seeking higher returns by dramatically increasing its use of derivative instruments, purchasing highly unstable mortgage-related and corporate bonds and significantly increasing its leverage exposure, and concealed the increased risk from investors.

The new complaint includes similar allegations to a suit filed in federal court in February by San Diego law firm Coughlin Stoia Geller Rudman & Robbins LLP (see OppenheimerFunds Hit with Bond Fund Lawsuit).