CHICAGO, July 22, 2011 (GLOBE NEWSWIRE) -- Stoltmann Law Offices is warning victims of the Oppenheimer Champion Income Fund (OCHBX, OPCHX and OCHCX) and the Oppenheimer Core Bond Fund (OPIGX, OIGBX and OPBCX) that the class action opt out date is August 31, 2011. If investors who sustained losses in the Oppenheimer Champion Income Fund and Oppenheimer Core Bond Fund do not affirmatively opt out of the class action lawsuit, they will not be able to pursue FINRA arbitration claims or lawsuits against Oppenheimer or the brokerage firms who recommended the Fund.
According to Andrew Stoltmann: "If a Champion Income or Core Bond Fund victim is a member of the Class and wants to retain the right to sue or to continue to sue Oppenheimer and other related parties like brokerage firms, then they must take steps to get out of the Class. This is called excluding yourself and is sometimes referred to as 'opting out' of the Class. In order to properly exclude yourself, the investors must send in a written exclusion to class counsel and this must be postmarked no later than August 31, 2011. More information on how to properly opt out can be found at www.OppenheimerChampionSettlement.com."
Stoltmann also states: "If investors in the Funds do nothing, they remain a member of the Class. If certain conditions are met and the settlement becomes effective, the Claims Administrator will send the class members a check for the settlement amount. It appears as though the amount will be approximately three cents on the dollar for the Champion Fund and twelve cents on the dollar for the Core Bond Fund. Unfortunately, the investor will not be able to bring a lawsuit or action of any kind, including arbitration or even continue with a lawsuit of any kind if they fail to opt out."
According to Stoltmann: "We encourage victims to contact Stoltmann Law Offices to discuss whether FINRA arbitration claims against the brokerage firms who recommended the funds or lawsuits directly against Oppenheimer make more sense in order to maximize recovery prospects. We can assist in the opt out process for clients of our firm."
Stoltmann Law Offices is currently representing approximately 80 victims of the Oppenheimer Champion Income and Core Bond Funds. The arbitration actions and lawsuits allege fraud, deceptive practices, negligence and misrepresentations and omissions related to the Fund's concentration in highly speculative derivative tranches, credit default swaps, total return swaps and other high risk derivatives.
According to attorney Andrew Stoltmann, "The Champion Income Fund was concentrated in extraordinarily speculative derivatives and other high risk investments. The Fund's marketing material, and even the prospectus, assured investors the fund would be less risky than the typical high income fund. As late as 2008, the prospectus stated 'In selecting securities for the Fund, the overall strategy is to build a broadly diversified portfolio to help moderate the special risks of investing in high-yield debt instruments….The Fund is intended to be a long-term investment and may be appropriate as a part of a retirement plan portfolio.' Given the concentration in credit default swaps and other high risk derivatives, the Fund was not as it was represented to be. Thousands of investors' retirement accounts have been decimated."
According to the arbitration claims and lawsuits, the Champion Income Fund took a massive bet in high risk derivatives in the form of mortgage backed securities, total return swaps and credit default swaps. Total-return swaps are highly illiquid, speculative and complex agreements between parties to exchange cash flows in the future based on how a set of securities perform. Credit default swaps are similar to insurance contracts that protect investors against bond and loan defaults. Specifically, the Fund took a massive gamble that top-rated commercial mortgage-backed securities would rally in 2008.
According to Stoltmann, "Derivatives have been described by Warren Buffet as financial weapons of mass destruction. Derivatives have brought down Orange County, California, Barings Bank, and multiple other bond funds like the Piper Jaffray Institutional Government Income Portfolio in 1993. The SEC and FINRA have repeatedly warned financial institutions about concentrating mutual funds in high risk, speculative derivatives. Yet Oppenheimer thumbed its nose at these warnings and the results for thousands of retirees in Oppenheimer mutual funds have been a financial cataclysm."
Through October of 2008, according to Yahoo Finance, the Oppenheimer Champion Income Fund A Share was ranked 550 out of 562 high income funds. Of the 12 funds that performed worse, almost half were different share types of the Champion Income Fund. According to the statement of claims and lawsuits, the Champion Income Fund lost approximately 80% of its value during 2008, with nearly all of those losses occurring in the last 6 months of 2008. The fund lost a stunning 55% of its value in November 2008 alone.
More information is available at www.OppenheimerFundFraud.com or www.InvestmentFraud.Pro