NEW YORK, May 29, 2009 (GLOBE NEWSWIRE) -- The law firm of Labaton Sucharow LLP has filed a class action lawsuit in the United States District Court for the District of Colorado on behalf of all persons who purchased Class A and/or Class B and/or Class C shares of the Oppenheimer AMT-Free Municipals Fund (the "Fund") (Nasdaq:OPTAX) (Nasdaq:OTFBX) (Nasdaq:OMFCX) during the period from May 13, 2006 to October 21, 2008, inclusive (the "Class Period").
If you are a member of this class you can view a copy of the complaint and join this class action online at http://www.labaton.com/en/cases/newly-filed-cases.cfm
The complaint charges OppenheimerFunds, Inc., OppenheimerFunds Distributor, Inc., the Fund and certain of its trustees and officers with violations of Sections 11, 12 (a)(2), and 15 of the Securities Act of 1933, which prohibit materially false and misleading statements in registration statements and prospectuses of the kind used to sell shares in the Fund. The Fund invests primarily in municipal securities.
According to the complaint, during the Class Period the Fund failed to disclose risk factors associated with the Fund's investments, including, but not limited to: (1) the Fund's investments in "inverse floater" securities that exposed it to the risk that it would be forced to sell, upon certain occurrences relating to the inverse floater securities, other securities in its portfolio at fire-sale prices. This amounted to hundreds of millions of dollars in undisclosed potential liabilities; and (2) the Fund's over concentration of investments in illiquid securities in violation of its 15% cap by investing in illiquid tobacco bonds and ordinary municipal bond and notes that could turn illiquid quickly.
On October 21, 2008, the Fund filed a prospectus supplement alerting investors of the true liquidity risks of its investments-the same risks that existed in 2006, 2007 and throughout 2008. By October 2008, however, those risks had already manifested, causing substantial losses to investors. On October 21, 2008, the Fund's shares traded at approximately $5.96 per share, down from $8.93 per share at the beginning of the year, an approximate decline of 33.3%per share for the year. The Fund was among the worst performing in its peer group.
According to the complaint, after the end of the Class Period, the Fund belatedly disclosed liabilities and residual exposure from the inverse floaters, about which investors were not previously told. On December 18, 2008, the Fund reported in its Quarterly Schedule of Portfolio Holdings for the period ending October 31, 2008, filed on Form N-Q with the SEC ("October 31, 2008 Form N-Q"), that the amount of its exposure to the effects of leverage from its investments in inverse floaters exceeded $240.7 million as of October 31, 2008. Additionally, the Fund also reported that its municipal bond holdings with a value of approximately $402.4 million were held by Trusts created by the inverse floaters and served as collateral for approximately $324.1 million in short-term floating rate notes issued and outstanding at that date, and that its residual exposure to the inverse floating rate securities was estimated at nearly $218.7 million. The massive liabilities and exposure of more than $500 million were not disclosed in any Registration Statements issued during the Class Period.
Plaintiff is represented by the law firm Labaton Sucharow LLP. Labaton Sucharow is one of the country's premier national law firms that represent institutional and individual investors in class action, complex securities and corporate governance litigation. The firm has been a champion of investor rights for more than 40 years and has been recognized for its reputation for excellence by the courts. More information about Labaton Sucharow is available at www.labaton.com.
If you purchased any class of shares of Oppenheimer AMT-Free Municipals Fund between May 13, 2006 and October 21, 2008, inclusive, you may move to serve as Lead Plaintiff. Lead Plaintiff motion papers must be filed with the United States District Court for the District of Colorado no later than July 13, 2009. A lead plaintiff is a court-appointed representative for absent class members. You do not need to seek appointment as lead plaintiff to share in any class recovery in this action. If you are a class member and there is a recovery for the class, you can share in that recovery as an absent class member. You may retain counsel of your choice to represent you in this action.
If you would like to consider serving as lead plaintiff or have any questions about the lawsuit, you may contact one of our representatives or Alan I. Ellman, Esq. of Labaton Sucharow, at 800-321-0476 or (212) 907-0700, or via email at aellman@labaton.com.