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.