Public pension sues Oppenheimer over private equity accounting.
Last week we reported about the SEC investigation into Oppenheimer & Co. (OPY), which has been accused of improperly marking up one of its private equity investments in an attempt to solicit investors. Now the Brockton Retirement Board, which manages money for public employees in Brockton, MA, has filed suit against Oppenheimer for alleged violations of federal securities law.
The suit is intended to be a class action, although it does not appear that any other plaintiffs have yet signed on.
BRB committed $5 million to the Oppenheimer fund in March 2010, or five months after OPCO marked up the value of an underlying asset to par (rather than at cost, per the valuation methodology of the underlying manager). It basically is accusing Oppenheimer of using false information to solicit investments, and is requesting a jury trial and unspecified damages.
Read the complaint below: