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June 22, 2010

$6M settlement reached in FAME fund losses

By The Mainebiz News Staff

Participants in the state-sponsored NextGen College Investing Plan will receive more than $6 million as part of a settlement with OppenheimerFunds reached by the Finance Authority of Maine and the Maine Office of Securities.

The Maine Office of Securities noted the settlement ends its investigation in conjunction with the Attorney General's Office into the management of certain investments offered by OppenheimerFunds Inc. All OppenheimerFunds portfolios in NextGen were terminated by FAME in July 2009, and the investigation was launched per FAME's request. NextGen was created by the Maine Legislature in 1999 as a qualified tuition program.

The settlement funds will be divided among certain account holders based on their exposure to the Oppenheimer Core Bond Fund from Jan.1, 2008, through March 31, 2009. Affected investors who maintain a NextGen account will have their allocation of the settlement credited directly to their NextGen account. Others will be eligible to receive a check, according to the Attorney General's Office.

OppenheimerFunds has reached similar settlements with other states to pay back plan participants who invested in the bond fund, which suffered major losses due to mortgage-backed securities, according to the Associated Press.

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