January 31, 2014 — The investing public has a right to know the truth. To protect investors from misleading financial reporting and marketing, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 established a financial fraud whistleblower program. Informants who notify the U.S. Securities and Exchange Commission (SEC) about fraudulent promotional materials or other misleading information may be generously rewarded for their willingness to collaborate with the government.
Portfolio Manager Provided Investors with Phony Valuation, Return Rates
Brian Williamson, a former portfolio manager with Oppenheimer & Co., will pay a $100,000 penalty and be forever banned from the securities industry to settle SEC charges that he misrepresented the value of an Oppenheimer fund that was made up of other private equity funds.
In August 2013, the SEC initiated administrative proceedings against Williamson, alleging that he disseminated fraudulent information which claimed that the Oppenheimer fund’s biggest investment had been valued by the underlying fund’s portfolio manager. In reality, Williamson himself had provided the value of the underlying fund, and at a substantial markup to the value actually assigned by the underlying fund’s portfolio manager. Williamson used his phony valuation in marketing materials provided to potential fund investors. The promotional literature boasted an artificially high internal rate of return that was derived by neglecting to deduct the fund’s expenses and fees. To conceal his fraudulent conduct, Williamson compounded his wrongdoing by making false statements to investor consultants and others.
Last year, Oppenheimer agreed to pay $2.8 million in a settlement of related charges.
Tipsters Collaborate with SEC about Misleading Promotional Materials
Insider employees with firsthand knowledge of misleading marketing materials or SEC filings deserve to understand their rights before stepping forward. The SEC fraud attorneys at Waters & Kraus are committed to safeguarding whistleblowers’ interests when they notify the government about misleading SEC reports. Contact us or phone our securities fraud attorneys at 855.784.0268 to learn how we can assist you.
