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BusinessWeek – The list of dissidents is much smaller than the original 20 or so hedge funds that veoted a pre-bankruptcy deal to reduce Chrysler’s outstanding secured debt. The list of hedge funds that are still members of the opposition group calling themselves Chrysler Non-Tarp Lenders is down to just six funds. In all, the funds control $295 million of Chrysler debt, a far cry from the nearly $1 billion the original group of 20 had controlled.
The dissidents included funds managed by Schultze Asset Management, Arrow Hedge Partners, Stairway Capital, OppenheimerFunds, Foxhill Capital Partners and Group G Partners. Early on, Stairway Capital and Oppenheimer had been identified as leaders of the Chrsyler holdouts, but the others funds had not.
West Palm Beach (HedgeCo.net) – OppenheimerFunds, Inc. and OppenheimerFunds Distributor, Inc. is being investigated by US law firm Hagens Berman Sobol Shapiro for alleged violations of federal securities laws among other things on behalf of investors in the Core Bond Fund.
The "low-risk, conservative bond fund" that invested mainly in high-quality corporate bonds, is alleged to have started acting "like a hedge fund" taking extreme risks including selling risky credit default swaps and other high-risk derivative investments to Wall Street firms.
The Core Bond Fund suffered losses of more than 35% of its value in 2008 and continued to fall another 10% in the first three months of 2009. The Oppenheimer Champion income fund lost more than 80% of the its value, dropping almost $2 billion over the course of 15 months as a result of similar risky investments and deviations from the stated fund investment policy.
Hagens Berman is investigating whether officers and directors of the Core Bond Fund misled investors about the safety of the fund and whether they failed to adequately warn investors when the fund took extreme risks in violation of the Fund’s stated investment policy.
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Montgomery Advertiser – State officials are seeking $36.2 million in damages from OppenheimerFunds Inc., which managed a fund responsible for steep losses in the Oregon College Savings Plan.
Officials said in a statement Monday that risky, "hedge-fund like" investments cost the Oppenheimer Core Bond Fund 36 percent of its value last year — and 10 percent more so far this year.Meanwhile, comparable funds in a benchmark index posted a gain of about 5 percent for 2008, they said.
New York Times Blogs – Officials in Oregon are seeking $36.2 million in damages from OppenheimerFunds, which managed an account responsible for steep losses in the state’s college savings plan.
Officials said in a statement on Monday that risky “hedge-fund like” investments cost the Oppenheimer Core Bond Fund 36 percent of its value last year and 10 percent more so far this year.
Comparable funds in a benchmark index posted a gain of about 5 percent for 2008, they said.
