SMITH V. OPPENHEIMER FUNDS DISTRIBUTOR, INC.



A shareholder of the Oppenheimer Gold & Special Minerals Fund initiated a lawsuit on behalf of the Fund against the trustees of the Fund and the distributor of the Fund (Oppenheimer Funds Distributor). The lawsuit alleged that the defendants approved “asset-based compensation” to broker-dealers holding mutual fund shares in a brokerage account, contrary to the Investment Advisers Act of 1940 and a recent D.C. Circuit Court of Appeals case, Financial Planning Association v. SEC.

 

The plaintiff argued that, under the federal securities laws, broker-dealers may only receive compensation from transactional commissions and may not receive asset-based compensation, unless the broker-dealer is holding the shares in an advisory account subject to the Investment Advisers Act.

 

This lawsuit was filed in U.S. District Court for the District of Colorado. On September 23, 2010, the Court granted the defendants’ Motion to transfer the case to the U.S. District Court for the Southern District of New York. On June 6, 2011, the Court granted a Motion to Dismiss the case filed by the defendants. 

  • Court Grants Motion to Dismiss the Case
    On June 6, 2011, the Court granted the defendants' Motion to Dismiss the case.
  • Court Issues Order to Transfer Case to the Southern District of New York
    On September 23, 2010, the Court granted the defendants’ Motion to transfer this case to the U.S. District Court for the Southern District of New York.
  • Plaintiff Files Brief in Opposition to Motion to Dismiss
    On August 4, 2010, the plaintiff filed a Brief in Opposition to the Motion to Dismiss. In his Brief, plaintiff argues that any type of asset-based compensation is unlawful to be paid to broker-dealers in brokerage (vs. advisory) accounts, as the Investment Advisers Act prohibits these types of payments to unregistered investment advisers.
  • Defendants File Motion to Dismiss the Lawsuit
    On June 25, 2010, the defendants filed a Motion to Dismiss the case, arguing that the payment of Rule 12b-1 fees to broker-dealers does not require a broker to register as an investment adviser under the Investment Advisers Act of 1940.
  • Shareholder Files Derivative Complaint on Behalf of the Oppenheimer Gold & Special Minerals Fund
    On March 19, 2010, a shareholder filed a derivative complaint against the trustees and distributor of the Oppenheimer Gold & Special Minerals Fund. The Complaint alleged that Oppenheimer paid asset-based compensation to broker dealers in a manner contrary to the Investment Advisers Act of 1940 and a recent D.C. Circuit Court of Appeals decision, Financial Planning Association v. SEC.
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A shareholder of the Oppenheimer Gold & Special Minerals Fund initiated a lawsuit on behalf of the Fund against the trustees of the Fund and the distributor of the Fund (Oppenheimer Funds Distributor). The lawsuit alleged that the defendants approved “asset-based compensation” to broker-dealers holding mutual fund shares in a brokerage account, contrary to the Investment Advisers Act of 1940 and a recent D.C. Circuit Court of Appeals case, Financial Planning Association v. SEC.

 

The plaintiff argued that, under the federal securities laws, broker-dealers may only receive compensation from transactional commissions and may not receive asset-based compensation, unless the broker-dealer is holding the shares in an advisory account subject to the Investment Advisers Act.

 

This lawsuit was filed in U.S. District Court for the District of Colorado. On September 23, 2010, the Court granted the defendants’ Motion to transfer the case to the U.S. District Court for the Southern District of New York. On June 6, 2011, the Court granted a Motion to Dismiss the case filed by the defendants. 

Document Title: 
Court Grants Motion to Dismiss the Case
Document Desc: 
On June 6, 2011, the Court granted the defendants' Motion to Dismiss the case.
Document Title: 
Court Issues Order to Transfer Case to the Southern District of New York
Document Desc: 
On September 23, 2010, the Court granted the defendants’ Motion to transfer this case to the U.S. District Court for the Southern District of New York.
Document Title: 
Plaintiff Files Brief in Opposition to Motion to Dismiss
Document Desc: 
On August 4, 2010, the plaintiff filed a Brief in Opposition to the Motion to Dismiss. In his Brief, plaintiff argues that any type of asset-based compensation is unlawful to be paid to broker-dealers in brokerage (vs. advisory) accounts, as the Investment Advisers Act prohibits these types of payments to unregistered investment advisers.
Document Title: 
Defendants File Motion to Dismiss the Lawsuit
Document Desc: 
On June 25, 2010, the defendants filed a Motion to Dismiss the case, arguing that the payment of Rule 12b-1 fees to broker-dealers does not require a broker to register as an investment adviser under the Investment Advisers Act of 1940.
Document Title: 
Shareholder Files Derivative Complaint on Behalf of the Oppenheimer Gold & Special Minerals Fund
Document Desc: 
On March 19, 2010, a shareholder filed a derivative complaint against the trustees and distributor of the Oppenheimer Gold & Special Minerals Fund. The Complaint alleged that Oppenheimer paid asset-based compensation to broker dealers in a manner contrary to the Investment Advisers Act of 1940 and a recent D.C. Circuit Court of Appeals decision, Financial Planning Association v. SEC.