Federal judge drops pension funds' private equity suit against Oppenheimer
By Rick Baert | March 1, 2013 12:53 pm
A federal lawsuit by two Massachusetts public pension funds that claimed Oppenheimer & Co. had inflated the value of a private equity fund’s holdings was dismissed Thursday.
The $333 million Brockton Contributory Retirement System and the $290 million Quincy Contributory Retirement System invested “several million dollars each” in Oppenheimer Global Resource Private Equity Fund I in 2009 and 2010, according to court documents.
The pension funds claimed the Oppenheimer fund had overvalued shares of S.C. Fondul Proprietatea SA, a Romanian company that is the lone holding in private equity fund Cartesian Investor-A, in which the Oppenheimer fund invests, according to the documents.
U.S. District Court Judge Rya Zobel in Boston agreed with Oppenheimer’s argument that the investments were made by the pension funds through private transactions instead of a public offering, and thus federal securities laws don’t apply.
“The court accepts as true all factual allegations contained in the complaint, but not legal conclusions,” Ms. Zobel said in her ruling.
Harold Hanna, executive director of the Brockton pension fund, said the plan would not comment. Officials at the Quincy pension fund could not be immediately reached for comment.