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Oppenheimer maintains ties with investor accused of fraud

December 2, 2013: 2:22 PM ET

Oppenheimer & Co. wants to put its private equity scandal behind it. Well, sort of.

FORTUNE -- We're written a lot over the past couple of years about how a private equity unit of Oppenheimer & Co. once inflated the valuation of one of its investments, in order to help market a new fund. The SEC later charged Oppenheimer with misleading investors, and the firm agreed to pay a penalty, return money to investors and be censured. Also charged by the SEC was group head Brian Williamson, who is fighting the allegations.

When Williamson was charged back in August, I publicly wondered why Oppenheimer was continuing to let him manage firm assets via a third-party platform Williamson formed after spinning out of Oppenheimer. Oppenheimer said it was reviewing the complaint and allegations, but never issued a follow-up.

Now Fortune has obtained an investor letter that contains three new pieces of information:

  1. 1. Oppenheimer assumed control of the GP back in August;
  2. 2. The fund is fully committed, with a March 2013 IRR of 1.23%;
  3. 3. Oppenheimer has signed a consulting agreement with Williamson, to advise "on the various operational matters concerning the fund's portfolio."

In short, Oppenheimer just can't quit this guy.

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About This Author
Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

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