Accused of running a hedge fund instead of the promised “conservative” strategy, OppenheimerFunds has settled a lawsuit filed by Oregon.
The MassMutual division agreed to pay $20 million to settle a $36 million claim against it. Oregon alleged that Oppenheimer, which it had contracted to run its 529 college savings program, advertised the plan as conservative, but then put the money into risky and speculative investments. Eight of Oregon’s 15 college investment portfolios suffered losses in Oppenheimer’s Core Bond Fund.
The $20 million in settlement money will be distributed to 529 plan participants.
Oppenheimer did not admit any wrongdoing as part of the settlement.