Oregon Live – Oregon won the first round in a $36 million court battle against the former investment manager of its college fund by keeping the lawsuit out of federal court.

U.S. District Judge Michael Hogan ruled that the case be remanded to the Marion County Circuit Court, rejecting an attempt by OppenheimerFunds to avoid the jurisdiction of an Oregon court.

Attorney General John Kroger and Treasurer Ben Westlund have sued OppenheimerFunds for $36 million, saying it falsely promoted a high-risk college investment plan as "conservative." OppenheimerFunds’ Core Bond Fund, valued at $89 million in the state’s College Savings Plan last September, caused big losses in eight of 15 Oregon college investment portfolios, including those labeled conservative or ultraconservative.

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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.

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