The law firm of Girard Gibbs has filed a class action lawsuit on behalf of investors of the Oppenheimer California Municipal Bond Fund who purchased shares of the fund on or after September 27, 2006.
The complaint charges OppenheimerFunds and certain of its affiliates, officers and directors with violations of the Securities Act of 1933 and the Investment Company Act of 1940, alleging that the Oppenheimer California Municipal Bond Fund’s (the fund’s) registration statements and prospectuses made false and misleading statements of material fact about the fund’s investment objectives and strategies.
The class action is pending in the US District Court for the Northern District of California.
The complaint alleges that the registration statements and prospectuses failed to disclose that the fund: deviated from its investment objective of seeking interest income consistent with the preservation of capital by over-concentrating its holdings in higher-risk, lower-quality instruments and engaging in excessive leverage and borrowing strategies; increased its concentration of limited types of investments, thus failing to spread and reduce risk; and violated its industry concentration policy by investing more than 25% of its holdings in the real estate development industry including so-called ‘dirt bonds’ – land development bonds whose proceeds are used to finance the infrastructure requirements of new real estate development. As a result, the fund’s performance fell and the share price collapsed.
