Two class actions has been filed against Oppenheimer Funds, Inc. (NYSE: OPY), it’s subsidiaries, and certain of its individual funds, officers and directors by stockholders who purchased the company’s common stock between August 31, 1999 and March 22, 2004. In this case, the plaintiffs seek damages under common law theories for fraud and deceptive practices. A related case claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company’s securities. In both cases the stockholders seek to recover compensatory damages for the loss of value of their stock together with punitive damages and costs.

The complaint alleges that Oppenheimer used fund assets to make incentive payments to brokers, who would push Oppenheimer’s funds over other funds in return. The incentive payments were disguised as commissions, according to the plaintiffs. Plaintiffs allege that in fact, the brokers were encouraging the purchase of Oppenheimer funds not for any sound investment reason, but rather in order to receive incentive payments from Oppenheimer. The investors claim that both the use of fund assets for this purpose and the “pushing” of the Oppenheimer stock were fraudulent and deceptive practices, punishable under common law.

The stockholders seek compensatory and punitive damages, an accounting, recovery of all improperly paid fees, and their attorneys fees and costs.