SALEM, Ore. -- The investment firm facing a lawsuit over steep losses in the Oregon College Savings Plan denies any wrongdoing and blames market volatility for the losses.

OppenheimerFunds Inc. says accusations in the lawsuit by Oregon Attorney General John Kroger are unfair and lack merit.

The state is seeking $36.2 million in damages, claiming that OppenheimerFunds made risky and inappropriate "hedge-fund like" investments for conservative portfolios that were supposed to hold their value.

 Background: State sues Oppenheimer for mismanagement

The lawsuit includes allegations of negligence, breach of contract and state securities laws violations.

OppenheimerFunds spokeswoman Jeaneen Pisarra says the college fund bonds performed poorly because of market volatility, not because managers took extreme risks.