Oregon Sues Over Risks Taken In Its ’529′ Fund |

Oregon Sues Over Risks Taken In Its ’529′ Fund

Regardless of who wins this legal fight it is a future debt to someone. My bet? The taxpayer.

Oregon sued OppenheimerFunds Inc., charging the New York money manager with understating the risk it took with a bond fund in Oregon’s state college-savings plan.

On Monday, Oregon sued the firm for losses of $36 million incurred by participants in the Oregon College Savings Plan, which Oppenheimer manages. The accounts, known as “529″ plans, are a way for individuals to save tax-free for college expenses.

At least four other states had hired Oppenheimer to manage parts of their college-savings plans, including Texas, New Mexico, Illinois and Maine. A spokeswoman for Illinois’s state treasurer said the state is working with the other states, “to try to negotiate a settlement.”

The Oregon lawsuit, filed by its attorney general on behalf of the state treasurer in a county court, says that its 529 plan lost money due to risky investments made by Oppenheimer, which weren’t disclosed to the state.

http://online.wsj.com/article/SB123966488425515111.html#mod=testMod

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