September 04, 2013

Memorandum of Understanding Signed for Settlement of Oppenheimer Municipal Bond Fund Litigation

Cohen Milstein is pleased to inform shareholders who invested in certain municipal bond funds managed by OppenheimerFunds, Inc. and distributed by OppenheimerFunds Distributor, Inc. that the Lead Plaintiffs in six consolidated class action lawsuits have entered into a memorandum of understanding with OppenheimerFunds, Inc. and other Defendants.  The memorandum of understanding contemplates that the parties will enter into stipulations of settlement with respect to six cases relating to Oppenheimer Rochester National Municipals, Oppenheimer AMT-Free Municipals, Oppenheimer Rochester Fund Municipals, Oppenheimer AMT-Free New York Municipal Fund, Oppenheimer New Jersey Municipal Fund and Oppenheimer Pennsylvania Municipal Fund (the “Funds”) which are pending in federal district court in Colorado.  As part of the proposed settlement, OppenheimerFunds will make an aggregate payment of $89.5 million to be distributed to class members.  Cohen Milstein Sellers & Toll PLLC serves as Lead Counsel for investors in the AMT-Free Fund and Rochester Fund; Milberg LLP serves as Lead Counsel for investors in the AMT-Free New York Fund, New Jersey Fund, and Rochester National Fund; Berger & Montague, P.C. serves as Lead Counsel for investors in the Pennsylvania Fund; and The Shuman Law Firm serves as Court-appointed Liaison Counsel for all Funds.

The six class actions, which were consolidated in June 2009, charge OppenheimerFunds, Inc., OppenheimerFunds Distributor, Inc., the Funds, and certain of their trustees and officers with violations of the federal securities laws, including violations of the Securities Act of 1933, which prohibits materially false and misleading statements in registration statements and prospectuses of the kind allegedly used to sell shares in the Funds.

According to the complaints, the Funds’ assets were managed in a way that was inconsistent with the Funds’ stated investment objectives and with the Funds’ stated limits on illiquid securities, inverse floaters, and other assets.  The complaints further allege that when risks embedded in the Funds materialized, the value of the Funds’ shares declined significantly. 

Defendants have denied all allegations and aggressively litigated the cases.  Prior to reaching the memorandum of understanding Plaintiffs had successfully briefed and defended their allegations against Defendants’ motions to dismiss in the six cases as well as a motion for partial summary judgment.   

The proposed settlements are subject to a number of contingencies, including completion of all documentation and approval by the Funds’ board of trustees and by the Court. In the event the parties enter into the contemplated stipulations of settlement, they will seek preliminary approval by the Court of the settlement agreements so that information about the proposed settlements may be sent to Class Members before final court approval.  Plaintiffs and OppenheimerFunds entered into the memorandum of understanding to avoid a lengthy and expensive legal process.  Plaintiffs believe that the proposed settlements are in the best interest of shareholders seeking recovery of their alleged damages as well as a resolution of these matters.

For more information about the case, contact Steve Toll, Partner, or Doug Bunch, Associate, at Cohen Milstein Sellers & Toll PLLC at stoll@cohenmilstein.com and dbunch@cohenmilstein.com; Washington, D.C. office: (202) 408-4600.