A news release from Coughlin Stoia Geller Rudman & Robbins LLP said its lawsuit seeks to represent shareholders in the fund between January 26, 2007 and December 9, 2008.
The complaint charges that investors unknowingly purchased shares in what they thought was a high-yield bond fund but, by late 2006, the fund had begun moving into positions with significantly more risk including purchases of “highly unstable” mortgage-backed and corporate bonds. Fund managers kept secret the fact that the risk profile of the fund had risen dramatically, the suit charges.
According to the suit, Champion Fund shares declined in tandem with other high-yield fund shares as the credit crunch exposed the poor underlying fundamentals of the financial sector’s mortgage risk management and problems with structured finance vehicles starting in July 2008.
Then, the plaintiffs allege, beginning in mid-September 2008 with the collapse of Lehman Brothers Holdings Inc. and American International Group, Inc., and continuing through December 2008, the Oppenheimer offering began to acknowledge the “serious deterioration” in its holdings. As a result, the share price “collapsed.”
More information about the lawsuit is available here .