Fundsters following OppenheimerFunds' [see profile] legal woes over some fixed income mutual funds may want to take a look at Bloomberg. Two months ago a pair of plaintiffs' law firms revealed a proposed $100 million settlement involving the Oppenheimer Champion Income Fund and the Oppenheimer Core Bond Fund [see MFWire.com, 5/23/2011], and now Dawn McCarty and Phil Milford report that yesterday a federal judge scheduled an approval hearing for the proposal on September 30.

"OppenheimerFunds entered into these proposed settlement agreements to avoid a lengthy and expensive legal process … In doing so, the company has not admitted any wrongdoing in the matters raised in the lawsuits," OppFunds spokesman Samuel Wang reportedly told Bloomberg. "We believe that the proposed settlements are in the best interests of shareholders of the Funds and we are pleased that we are moving toward a resolution of these matters."

The suits -- In re Oppenehimer Champion Income Fund Securities Fraud Class Actions and In re Oppenheimer Core Bond -- both involve allegations that, prior to the real estate crash and the financial crisis, OppFunds portrayed the two funds as conservative while investing their assets heavily in mortgage-backed securities. The New York-based asset manager (a subsidiary of MassMutual) has agreed to pay more than $164 million to settle similar disputes over its fixed income funds inside 529 college savings plans for the states of Illinois, New Mexico and Oregon [see MFWire.com, 11/20/2009, 12/16/2009 and 12/22/2009]. 

Edited by: Neil Anderson, Managing Editor


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