More Investors File Lawsuits Over Losses In Oppenheimer Champion Income Fund
At least two more investors have filed a lawsuit against OppenheimerFunds, Inc. after assets in the Oppenheimer Champion Income Fund (OPCHX) entered a free fall last year. Investors Gary and Rita Wallen filed their lawsuit April 10 in a Denver, Colorado, U.S. District Court.
The couple’s complaint follows similar charges against Oppenheimer in which investors say managers of the Oppenheimer Champion Income Fund misled them about the fund’s portfolio composition. Instead of being a conservative high-income fund, the Champion Income Fund invested more than 25% of its assets in high-risk mortgage-backed securities and illiquid derivatives.
According to the fund’s own policies, that move required a majority vote from shareholders, something Oppenheimer failed to obtain and which violated state laws.
As a result of the high-risk investments, the Oppenheimer Champion Income Fund lost more than 80% of its value, dropping almost $2 billion over the course of a year. By comparison, other high-yield funds averaged a drop of 32% in 2008.
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