OppenheimerFunds Settles Illinois 529 Program Investigation

December 22, 2009 (PLANSPONSOR.com) - OppenheimerFunds, Inc. and the state of Illinois have reached an agreement to resolve the state's investigation into the management of its Bright Start College Savings Program.

Under the terms of the settlement agreement, OppenheimerFunds does not admit any wrongdoing and agrees to pay the State $77 million which the state intends to distribute to eligible participants in the Bright Start program. A press release said the settlement allows both the state and OppenheimerFunds to avoid a potentially lengthy and expensive legal process.

OFI Private Investments Inc., an OppenheimerFunds subsidiary, remains the program manager for the Bright Start program.

OppenheimerFunds recently settled a lawsuit brought by the state of Oregon over losses to the state's 529 plan assets invested in the investment firm's Core Bond Fund (see Oregon Settles with Oppenheimer on 529 Plan Losses).

Other shareholder suits have been brought against the firm in New York (see OppenheimerFunds Faces More Litigation over Champion Income Fund) and California (see OppenheimerFunds Hit with Bond Fund Lawsuit) claiming its fixed income funds were too risky.

In January, OppenheimerFunds announced the appointment of a new Director of Fixed Income (see Oppenheimer Names New Head of Fixed Income), and prior to that installed new leadership for the Core Bond Fund's management team.

Rebecca Moore
editors@plansponsor.com