NEW YORK — Oppenheimer Funds agreed to pay more than $35 million to settle government charges that it misled investors who invested in two of its bond funds.
The Securities and Exchange Commission said Wednesday that Oppenheimer bought complex mortgage-backed securities in 2008 that increased the level of risk at a high-yield bond fund called the Oppenheimer Champion Income Fund and an investment-grade fund called the Oppenheimer Core Bond Fund.
As part of agreements that the funds entered into by buying the complex investments, they had to come up with cash when the value of the mortgage securities fell dramatically during the financial crisis.
The funds were forced to sell significant portions of their bond holdings to raise the cash which resulted in losses for bond investors. However, the funds didn’t disclose this to their investors.
“Mutual fund providers have an obligation to clearly and accurately convey the strategies and risks of the products they sell,” said Robert Khuzami, director of the SEC’s Division of Enforcement. “Candor, not wishful thinking, should drive communications with investors, particularly during times of market stress.”
American Airlines plans flight reduction in July
DALLAS — American Airlines says it will reduce flights in July partly because of a shortage of pilots due to more of them calling in sick.
The 1 percent reduction in July’s schedule follows a 1.5 percent cutback in June, which was also blamed partly on higher usage of sick leave by pilots.
A union spokesman said Wednesday that pilots could be taking care of elective procedures before American raises their premiums and co-payments.
Meanwhile, American was also expected to announce Wednesday the next step in its plan to eliminate 1,400 management and support jobs by late summer. The company has previously announced the elimination of several senior executive jobs, and several top officials have retired.
Stadler Rail builds world’s ‘most powerful’ train
GENEVA — Swiss manufacturer Stadler Rail unveiled Wednesday a train 50 percent more powerful than its competitors, earning it a multimillion-dollar deal with a Brazilian buyer.