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.
The train was described by Stadler as “by far the largest and most powerful rack-and-pinion locomotive ever built.” A total of seven engines have been ordered by Brazilian purchaser MRS Logistica for $62 million.
The electric trains - each weighing nearly 120 tons - are to be put to work carrying iron ore between Sao Paulo and Santos, the largest port in South America.
The locomotives will be coupled together and tasked with pulling loads of up to 850 tons up slopes.
They are 50 percent more powerful than trains currently in use, Stadler said in a statement.
Once finished in the next few weeks, the first two trains will be taken to Basel and transported to Brazil via the Belgian port of Antwerp.
Hackers shut down major telecom operator’s website
NEW DELHI — A hacking group said it attacked the website of an Indian state-owned telecommunications provider Wednesday, accusing the company of censoring content on the Internet.
The corporate website of Mahanagar Telephone Nigam Limited, which caters to the major Indian cities of New Delhi and Mumbai, was down for at least six hours. A post on hacking group Anonymous India’s blog said the company was attacked because it had blocked several file-sharing websites.
But company officials denied any knowledge of an attack.
“We have individual websites for Delhi and Mumbai … and both are operational,” said M.K. Purohit, general manager of broadband services at the company’s Mumbai office.
Mr. Purohit said the company’s corporate website the site Anonymous said it had hacked was no longer in use. But an online search for the domain’s owner showed MTNL as the registrant until February 2014.
Earlier this week, Anonymous India claimed to have taken down the website of the Internet Service Providers Association of India. The association’s president, Rajesh Chharia, denied an attack had occurred.
• From wire dispatches and staff reports
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