Milberg LLP Announces the Filing of a Class Action Lawsuit Against Oppenheimer AMT-Free Municipals Fund -- OPTAX, OTFBX, OMFCX
May 28 2009 - 6:17PM
Marketwired
The law firm of Milberg LLP has filed a class action lawsuit in the
United States District Court for the District of Colorado on behalf
of all persons who purchased Class A and/or Class B and/or Class C
shares of the Oppenheimer AMT-Free Municipals (the "Fund") (NASDAQ:
OPTAX) (NASDAQ: OTFBX) (NASDAQ: OMFCX) during the period from May
13, 2006 to October 21, 2008, inclusive (the "Class Period"). The
complaint is available from the Court or can be viewed at Milberg
LLP's website at www.milberg.com.
The complaint charges OppenheimerFunds, Inc., OppenheimerFunds
Distributor, Inc., the Fund and certain of its trustees and
officers with violations of Sections 11, 12(a)(2), and 15 of the
Securities Act of 1933, which prohibit materially false and
misleading statements in registration statements and prospectuses
of the kind used to sell shares in the Fund. The Fund invests
primarily in municipal securities.
According to the complaint, during the Class Period the Fund
failed to disclose risk factors associated with the Fund's
investments, including, but not limited to: (1) the Fund's
investments in "inverse floater" securities that exposed it to the
risk that it would be forced to sell, upon certain occurrences
relating to the inverse floater securities, other securities in its
portfolio at fire-sale prices. This amounted to hundreds of
millions of dollars in undisclosed potential liabilities; and (2)
the Fund's overconcentration of investments in illiquid securities
in violation of its cap of 15% by investing in illiquid tobacco
bonds and ordinary municipal bonds/notes that could turn illiquid
quickly.
On October 21, 2008, the Fund filed a prospectus supplement
alerting investors of the true liquidity risks of its investments
-- the same risks that existed in 2006, 2007 and throughout 2008.
By October 2008, however, those risks had already manifested,
dealing substantial losses to investors. On October 21, 2008,
AMT-Free Fund shares traded at approximately $5.96 per share, down
from $8.93 per share at the beginning of the year, an approximate
33.3% decline per share for the year. The AMT-Free Fund was among
the worst performing in its peer group.
According to the complaint, after the end of the Class Period,
the AMT-Free Fund belatedly disclosed liabilities and residual
exposure from the inverse floaters, which investors were not
previously told about. On December 18, 2008, the AMT-Free Fund
reported in its Quarterly Schedule of Portfolio Holdings for the
period ending October 31, 2008, filed on Form N-Q with the SEC
("October 31, 2008 Form N-Q"), that the amount of its exposure to
the effects of leverage from its investments in inverse floaters
exceeded $240.7 million as of October 31, 2008. In addition, the
AMT-Free Fund also reported that its municipal bond holdings with a
value of approximately $402.4 million were held by Trusts created
by the inverse floaters and served as collateral for approximately
$324.1 million in short-term floating rate notes issued and
outstanding at that date, and its residual exposure to the inverse
floating rate securities was estimated at nearly $218.7 million.
The massive liabilities and exposure of more than $500 million were
not disclosed in any Registration Statements issued during the
Class Period.
If you purchased any class of shares of Oppenheimer AMT-Free
Municipal Fund from May 13, 2006 to October 21, 2008, you may move
the court no later than July 13, 2009, and request that the Court
appoint you as lead plaintiff. A lead plaintiff is a representative
party acting on behalf of other class members in directing the
litigation. To be appointed lead plaintiff, the Court must decide
that your claim is typical of the claims of other class members,
and that you will adequately represent the class. Your share in any
recovery will not be enhanced or diminished by the decision whether
or not to serve as a lead plaintiff. You may retain Milberg LLP, or
other attorneys, to serve as your counsel in this action.
Milberg LLP has been representing individual and institutional
investors for nearly 40 years and serves as lead counsel in federal
and state courts throughout the United States. Please visit the
Milberg website (http://www.milberg.com) for more information about
the firm. If you wish to discuss this matter with us, or have any
questions concerning your rights and interests with regard to this
matter, please contact the following attorneys:
Andrei Rado Ted Swiecichowski Milberg LLP One Pennsylvania
Plaza, 49th Fl. New York, NY 10119-0165 Phone number: (800)
320-5081 Email: contactus@milberg.com Attorney Advertising. Prior
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