Standard investment industry warnings about reading the prospectus would have done little good to investors in two Oppenheimer bond mutual funds, whose misleading statements cost the fund company $35 million in SEC sanctions.
According to an SEC investigation, OppenheimerFunds got caught on the wrong side of a bet on commercial mortgage-backed securities in the depths of the credit crisis in late 2008.
In findings announced Wednesday, the SEC said Oppenheimer used total return swaps to gain leveraged exposure to CMBS in two of the company's funds: the Oppenheimer Champion Income Fund, a high-yield bond fund, and the Oppenheimer Core Bond Fund, an intermediate-term bond fund.
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