Oppenheimer whistleblower sues former firm

Despite reaching a $2.8m settlement with the SEC in May, Oppenheimer is now being sued by the executive who informed the authorities of the firm’s alleged misdeeds.

An ex-Oppenheimer & Co employee has sued the firm for allegedly firing him as revenge for blowing the whistle on a scheme to inflate a fund’s valuation, according to a Law360 report.

An Oppenheimer spokesperson was not immediately available for comment.

The employee, only identified in the complaint as John Doe, alleged his employment was terminated after reporting to several colleagues his concerns that Oppenheimer fund manager Brian Williamson had falsely claimed that the value of Oppenheimer Global Resource Private Equity Fund's largest investment came from the portfolio manager of the underlying fund vehicle, when in fact he had made the significant markups himself.

Last month, Williamson accepted the charge of misrepresenting the valuation of the fund of funds, agreeing with the Securities and Exchange Commission (SEC) to be barred from the securities industry for a minimum of two years, and to pay a $100,000 penalty.

After expressing his concerns, the plaintiff was informed by Williamson that he was being fired – supposedly for forging expense reports, a claim the plaintiff denies, according to the complaint.

The plaintiff then emailed Oppenheimer chief executive, Albert Lowenthal, describing the alleged wrongdoing and retaliation. He also reported his concerns to Oppenheimer’s deputy general counsel, John McGuire, the suit said.

McGuire offered the plaintiff a back-office position at Oppenheimer, which was declined; the plaintiff was then officially dismissed, according to the suit.

The plaintiff subsequently informed the SEC of the inflated valuations, prompting the case that ultimately resulted in Oppenheimer reaching a $2.8 million settlement with the Commission in May.