The US SEC has filed civil administrative charges against former Oppenheimer Holdings’ fund manager Brian Williamson accusing him of misleading investors about the valuation and performance of some funds.
The SEC said that its investigation found that Williamson disseminated quarterly reports and marketing materials to prospective investors misstating that the valuation of a fund’s holdings was based on values received from the portfolio managers of those underlying funds.
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Earlier this year, Oppenheimer agreed to pay US$2.8 million in a settlement of related charges.
According to the SEC’s complaint, Williamson made material false and misleading statements and omissions to investors about the valuation of the Oppenheimer Global Resource Private Equity Fund I, LP from September 2009 through June 2010.
Additionally, SEC said that he disseminated marketing materials reporting an internal rate of return that failed to deduct fees and expenses, which significantly enhanced its apparent performance.
Williamson has increased the reported value of the fund’s largest investment to about US$9 million from US$6 million.
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By GlobalDataAndrew Ceresney, co-director of the SEC’s Division of Enforcement, said:"Investors deserve and the law requires honest disclosure about how their investments are valued. Williamson improperly lured investors to the private equity fund he managed by providing false and misleading information about the fund’s performance."
Julie Riewe, co-chief of the SEC Division of Enforcement’s Asset Management Unit, said: "Interim valuations are especially important when used to raise funds in the private equity industry. Private fund managers must provide investors with accurate disclosures about valuation methodologies as well as fund fees and expenses so they can make fully informed investment choices."
