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:
Does Oppenheimer have an accounting scandal?
Last month, we broke news that Oppenheimer & Co.'s private equity team had spun out into an independent firm called Roc Resources. Just two weeks later, the WSJ reported that Oppenheimer was under investigation by the SEC and other government agencies for inappropriately changing the valuation of one of its investments, perhaps to make a new Roc-branded fund more attractive to prospective investors.
Upon first hearing about the investigation, I wondered MOREDan Primack - Mar 20, 2012 9:55 AM ET
The energy-focused private equity team of Oppenheimer & Co. (OPY) has quietly left to form a new firm called Roc Resources, Fortune has learned.
There isn't too much information yet on the Roc Resources website, but the LinkedIn profile of director Wesley Ketcham explains the strategy thusly:
Source, evaluate and manage investments in US onshore oil & gas development. Investments are achieved through a variety of structures, including direct acquisition of producing properties, MOREDan Primack - Feb 7, 2012 11:11 AM ET
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