Oppenheimer California Municipal Fund Lawsuit
When investing in bonds, whether it is single bond issues you are buying, or shares of a bond fund, it pays to do your homework. Just like you would do research before buying equities or equity funds do that on your bond funds. Many people are under the impression that one cannot sustain major losses because, “hey, it s a bond fund”, but as many Oppenheimer investors found out, a bond fund can get hammered as bad as any equity fund.
When investors bought into Oppenheimer’s California Muni Fund they were investing in a capital preservation fund and not a risky speculative one that it turned out to be. On February 4th 2009, the Sparer Law Group filed a class action lawsuit alleging that the fund deceived investors about the underlying risk. As it turned out the fund had been investing in highly speculative Dirt Bonds and other Junk Bond investments. Dirt Bonds are based on contracts for land developments that have not yet been built and were especially vulnerable to declines in California’s real estate markets. In 2008 the fund lost 41 percent of its Net Asset Value.
The lawsuit alleges that the fund had an over concentration of low rated and unrated bonds and risked that more than 25% of its holdings were Junk Bonds which was a violation of the Funds investment policies.
If you would like more information about the lawsuit please visit www.sparerlaw.com If you are a potential witness and have information regarding this case, contact them at info@sparerlaw.com or call them at: (415) 217-7300
Good luck and happy investing.
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