By Sarah N. Lynch
WASHINGTON, Aug 20 (Reuters) - U.S. securities regulators
charged a former private equity fund manager at Oppenheimer
Holdings Inc's Oppenheimer & Co on Tuesday with
misleading investors about the valuation and performance of some
The Securities and Exchange Commission claimed that Brian
Williamson, 42, disseminated quarterly reports and marketing
materials that essentially overstated the value of Oppenheimer's
fund holdings and performance figures.
The company earlier this year agreed to settle related
charges with the SEC and pay $2.8 million.
At that time, the company also paid an additional penalty of
$132,421 to settle related charges filed by the Massachusetts
Williamson, however, is fighting the charges. Absent a
settlement in the future, the case will go before an SEC
administrative law judge.
"We are deeply disappointed with the SEC's decision to bring
an enforcement action in this matter. In its zeal to pursue
cases in the private equity space, the SEC has alleged fraud
where none exists," said Dechert LLP's Andrew J. Levander, who
along with Cheryl A. Krause is representing Williamson.
"Mr. Williamson will vigorously defend against these charges
and looks forward to vindicating his good name and reputation in
According to the SEC's complaint, Williamson made "material
false and misleading statements and omissions" to investors
about the valuation of the Oppenheimer Global Resource Private
Equity Fund I, L.P., a fund of private equity funds he managed,
from September 2009 through June 2010.
The SEC said he led investors to believe the performance was
based on the underlying managers' estimated value. In fact, the
SEC claims, the value of its single-largest holding was really
based on Williamson's own "materially higher valuation."
In addition, the SEC claims that Williamson sent out
marketing materials reporting an internal rate of return that
failed to deduct certain fees and expenses.
That in turn made the fund's performance appear better.
"Williamson improperly lured investors to the private equity
fund he managed by providing false and misleading information
about the fund's performance," said Andrew Ceresney, the
co-director of the SEC's enforcement division.
Williamson's lawyers dispute these claims, saying that the
asset at the heart of the SEC's case now has a net asset value
which exceeds their client's earlier valuation.
In addition, Levander said the fund "already reflects an
approximate 61 percent gain in the asset's local currency and an
approximate 28 percent gain, converting to U.S. dollars," for
the fund's investors.
Williamson worked with Oppenheimer from 2005 through 2011,
according to the SEC. He marketed the fund to pensions,
foundations, endowments and high-net worth individuals.
From at least January 2012 to the present, Williamson has
been the sole owner and managing director of ROC Resources LLC
(ROC), an investment adviser that works with the Oppenheimer
Global Resource Private Equity Fund, the SEC complaint said.
As ROC's managing director, Williamson remains primarily
responsible for managing OGR, the SEC said.