Oppenheimer Class Action Lawsuit Filed Over Champion Income Fund
Published: February 16th, 2009 • Comments: 5
A class action lawsuit has been brought on behalf of investors who purchased or held shares of the Oppenheimer Champion Income Fund between January 26, 2007 and December 9, 2008. The suit claims that fund managers failed to disclose the extent of risk associated with the fund and seeks to recover financial losses suffered by investors.
The Oppenheimer Fund lawsuit was filed on February 13, 2009, in the United States District Court for the Southern District of New York seeking to represent all shareholders as a class.
Investors claim that they purchased what they thought was a high-yield bond fund, and it was not disclosed that fund managers were placing their assets in unstable mortgage-backed securities and corporate bonds which carried significantly more risk than they knew they were exposed to.
The Champion Fund shares began to decline in July 2008, as concerns about the financial industry’s poor underlying fundamentals increased. In September 2008, with the collapse of AIG and Lehman Brothers, the funds share prices sunk even further, ending the year with losses of 78%.
According to the Oppenheimer Champion Income Fund class action complaint, the defendants failed to disclose that they were no longer adhering to their stated objective of not taking any undue risk and were actually pursuing riskier investments to achieve greater yields. The plaintiffs also claim that the extent of the Fund’s leverage exposure was misstated and that material facts were omitted about the extent of their liquidity risk and the extent of their exposure to derivatives and other high risk instruments.
While the class action lawsuit seeks to pursue the interests of all investors, a number of those who have lost money are pursuing individual investment loss arbitration claims through the Financial Industry Regulatory Authority (FINRA).
In January 2009, two elderly investors filed what is believed to be the first FINRA arbitration claim over the Oppenheimer Champion Income Fund, stating that they lost $125,000.
Pingback by Oppenheimer Champion Income Fund Lawsuits : AboutLawsuits.com on 16 February 2009:
[...] FUND LAWSUIT STATUS: Lawyers have filed an Oppenheimer Champion Income Fund Class Action lawsuit on behalf of all shareholders between January 26, 2007 and December 9, 2008. In addition, some [...]
Comment by Shelley on 1 April 2009:
I thought I was investing in safe bond , and realized I lost half of my investment.
Pingback by Oppenheimer Lawsuit Filed by Oregon Over Mutual Fund Losses - AboutLawsuits.com on 16 April 2009:
[...] February 2009, an Oppenheimer class action lawsuit was filed in the U.S. District Court for the Southern District of New York, which seeks to [...]
Comment by Deb on 15 May 2009:
My mother is a shareholder in the Oppenheimer Champion Income Fund and has been since about 1987. She was counting on this fund as a cushion to her social security earnings along with what she earns in her part time job at the local dry cleaners as a counter person. She will be 77 next month. The value of her account was $46,141.84 on 6-30-08, and $9,122.62 on 3-31-09. She feels robbed. When she invested in this fund she felt it was a low risk fund, but that is no longer the case.
Comment by Rex on 20 January 2010:
Champion Income was sold as a junk bond fund of which many of the “junk” bonds were simply unrated corporate bonds. As a high yield fund is should not have been investing in AA and A mortgage-backed securities. Believe it or not mortgage-backed securities were rated higher then what a high yield bond fund should be investing in. That’s a different twist to say the least. I’m sorry Deb’s 77-year-old mom lost so much money but I would argue that Champion Income wasn’t a proper investment for her in the first place. Core Bond would have been though and they too invested in mortgage-backed securities! Deb’s mom would have still lost doing the proper fund just about half as much. Oppenheimer is going to loose these lawsuits and unless you lost millions you like me are going to be left out in the rain.