In the Matter of Oppenheimer Asset Management, Inc.

Oppenheimer Asset Management, Inc. (OAM) and Oppenheimer Alternative Investment Management, LLC (OAIM), investment advisers registered with the Securities and Exchange Commission (SEC), managed Oppenheimer Global Resource Private Equity Fund I, L.P. (OGR), a private-equity, fund-of-funds investment vehicle. In marketing materials to prospective investors and quarterly reports to existing investors, OAM and OAIM stated that the values of OGR’s investments were based on estimates by the underlying managers of those investments. In October 2009, OGR’s portfolio manager began using a different valuation method for OGR’s largest investment holding, Cartesian Investors-A, LLC (Cartesian), instead of the one used by Cartesian’s underlying manager. The new valuation method significantly increased the reported value of OGR’s Cartesian holding and, consequently, OGR’s reported performance. The change in valuation method for Cartesian was never disclosed to prospective or existing OGR investors. OAM’s and OAIM’s policies and procedures required compliance personnel to review and approve marketing materials but not portfolio managers’ valuations. Additionally, OAIM employees marketing OGR falsely represented that (1) the increase in Cartesian’s value was due to Cartesian’s performance rather than the change in the OGR portfolio manager’s valuation method for Cartesian; (2) a third-party valuation firm retained by Cartesian’s underlying manager wrote up the value of Cartesian, which did not occur; and (3) OGR’s underlying investment funds were independently audited, which was not true. The SEC brought an administrative proceeding against OAM and OAIM for violations of §§ 17(a)(2) and 17(a)(3) of the Securities Act of 1933 (Securities Act) and § 206(4) of the Investment Advisers Act of 1940 (Advisers Act).