According to the Wall Street Journal, Oppenheimer and one of its units may have overstated the value of one of its private equity funds at a time when it was promoting the fund to investors in the fall of 2009. It represented that the fund had a 38 percent internal rate of return when it had actually produced a loss of 6.3 percent. After reporting the inflated performance to investors, the fund raised over $55 million from individuals and institutions. Oppenheimer reported the investigation in its Form 10-K filed on March 6, according to the article. The private equity fund (not identified in the article) was operated by Oppenheimer Holdings Inc. "This is not only bad press but a situation where criminal and civil liability is a certainty, if true," says Robert Wayne Pearce, a Florida-based securities attorney.

Oppenheimer says it initiated its own internal investigation in June 2011, and found that it did nothing wrong. The U.S. Department of Justice, the Massachusetts Attorney General, and the Securities and Exchange Commission are not satisfied with Oppenheimer's internal investigation, and have requested that Oppenheimer produce documents and information. The regulators are reportedly focusing on both valuation and marketing of the fund.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.