SEC bars former Oppenheimer & Co. fund manager

Agency alleged that he misrepresented the value of a private-equity fund of funds

Jan 22, 2014 @ 1:26 pm

By Mason Braswell

A former Oppenheimer & Co. fund manager has been barred from the industry and will pay a $100,000 fine after being accused of misrepresenting the value of a fund he managed.

The ex-manager, Brian Williamson, falsely claimed that the value of the Oppenheimer Global Resource Private Equity Fund's largest investment came from the portfolio manager of the underlying fund, according to an order from the Securities and Exchange Commission.

In fact, he had valued the underlying fund himself and used a “significant markup” to the value actually estimated by the underlying fund's portfolio manager, the SEC said in the order.

“Investors rely on truthful and complete disclosures about valuation methodologies and fund fees and expenses, especially when committing to a long-term private-equity investment,” said Julie M. Riewe, co-chief of the SEC Enforcement Division's Asset Management Unit. “Williamson misled prospective investors by marking up the fund's interim valuations and concealing his role in enhancing its reported performance.”

In September 2009, for example, he reported the fund's internal rate of return was 12.4%, though the rate of return was actually as low as -6.3% when fees and expenses were taken into account, the SEC said.

From October 2009 to June 2010, Mr. Williamson raised about $61 million for the fund, according to the SEC's order.

The order comes after Oppenheimer last year agreed to pay $2.8 million in a settlement over similar charges regarding the valuation of a private-equity fund.

Oppenheimer wasn't named as a respondent in this case. Oppenheimer settled all issues related to this matter in May of last year.

Mr. Williamson, who left the company in December 2011, couldn't be reached for comment. He consented to the SEC's order without admitting or denying the regulator's findings.

After two years, Mr. Williamson will able to apply for re-entry into the industry, according to the SEC order.

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