Under the agreement, which was negotiated without a lawsuit, Illinois will distribute all the proceeds of the settlement to plan participants exposed to the OppenheimerFunds Core Plus Fixed Income Strategy between Jan. 1, 2008, and Jan. 25, 2009, the statement said.
Oppenheimer will pay all costs associated with administering the settlement, the statement said. Oppenheimer will pay entire settlement amount by March 31, said Jeaneen Pisarra, OppenheimerFunds vice president and director of media relations. Participants will receive their share of the proceeds within 30 days of sending in their claim forms, which Bright Start plans to distribute in early 2010, said Natalie Bauer, spokeswoman for Ms. Madigan. Ms. Bauer could not say what happens to proceeds that aren't claimed.
OFI Private Investments Inc., an OppenheimerFunds subsidiary, remains as the manager of the Bright Start plan, whose investments are managed by OppenheimerFunds, Vanguard Group and American Century Investments, according to the plan's website and Ms. Pisarra.
“Under the terms of the settlement agreement, OppenheimerFunds does not admit any wrongdoing,” an Oppenheimer statement said.
Scott Burnham, treasurer's office spokesman, couldn't be reached for comment about Bright Start's total assets or investment funds.
Also, OppenheimerFunds agreed in principle to pay $67.31 million to New Mexico to resolve a separate investigation into the company's investment management, according to a Dec. 15 Oppenheimer news release.
Last month, Oregon 529 College Savings Board approved a $20 million settlement of a lawsuit filed by the state against OppenheimerFunds, which is the program manager and had managed a core bond fund for the $1 billion plan, confirmed James Sinks, plan spokesman.
Oregon had sued OppenheimerFunds in state court, alleging that the firm stated its core bond fund was appropriate for conservative and ultraconservative portfolios, but invested Oregon plan assets in riskier, hedge-fund-like investments.