OppenheimerFunds Inc. said Thursday it will pay $20 million to settle a lawsuit the state of Oregon filed over the company's management of its 529 college savings program.
Oppenheimer, based in New York, was sued by Oregon's Attorney General John Kroger and Treasurer Ben Westlund for $36 million for falsely promoting a high-risk college investment plan as "conservative." OppenheimerFunds said in a statement it does not admit any wrongdoing in agreeing to the settlement.
The state intends to distribute the $20 million to plan participants, possibly early next year, once the settlement is finalized.
Lawyers had argued that Oppenheimer plan managers turned the plan into a hedge fund-like investment that took speculative risks. Oppenheimer's Core Bond Fund caused big losses in eight of 15 Oregon college investment portfolios.
In July, Oregon replaced Oppenheimer with TIAA-CREF to run the college savings plan.