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Case ID: 2515 | Stocks | 07/12/2004
A class action has been filed against Smith Barney and its parent, Citigroup Inc., by investors who invested $100,000 or more in class B shares in one or more Smith Barney mutual funds between June 12, 1998, and June 12, 2003, where the investment could have otherwise qualified for the $100,000 "breakpoint" load reduction associated with investments in class A shares of the same fund. The action claims that the defendants violated federal securities laws and engaged in a course of business that operated as a fraud and deceit on class members. The investors seek to recover compensatory damages for the excessive fees they paid.
The action alleges that Smith Barney's class B shares are an inferior investment choice because, for investors willing to invest $100,000 or more in Smith Barney Funds, investments in class B shares will yield a smaller return because class B shareholders are charged higher sales charges and ongoing annual fees than holders of class A or L shares in the same fund. Investors with $100,000 or more to invest will always pay less in sales charges and ongoing distribution fees by investing in class A shares than they will investing in B shares because these investors pay a reduced up-front load due to the size of their investment. Under these circumstances, A shares are always a superior investment choice to class B, regardless of anticipated holding period. Despite the fact that class B shares are not a sound investment choice for investors that could have qualified for the $100,000 breakpoint reduction had they invested in class A shares, the majority of money invested in the Smith Barney Funds goes into class B shares. Smith Barney allegedly fails to disclose to class members that investing in class B shares never makes economic sense but instead results in the payment of unnecessary and excessive fees to the defendants. The class action involves the following Salomon Smith Barney mutual funds: Adjustable Rate Income Fund (Smith Barney Shares) At Lawcash.com, it is our goal to keep you informed about important legal cases, class actions and settlements. Our lawyers offer free legal evaluations in tort cases, class actions, personal injury, and other lawsuits because we are dedicated to helping you resolve your legal complaints. Other Stocks Cases of Interest The parties have reached a tentative $6.25 million settlement in several consolidated class actions filed against Berkshire Realty Company, Inc., (formerly NYSE:BRI) and certain of its officers and directors by stockholders who purchased the company's common stock between June 21, 1999, and October 15, 1999. The actions claim that the defendants violated federal securities laws by breaching their fiduciary duties when they engineered a going-private, cash-out merger transaction in 1996 and 1997. The court-order notice of settlement does not specify a claims deadline -- persons eligible to take part in the settlement should contact attorneys for the class as soon as possible. The securities industry’s transition to e-trading has had some ups and downs, to say the least. The A $4.5 billion class action has been filed against Ameritrade Holdings, Inc. (Nasdaq:AMTD) and Knight Trading Group, Inc. (Nasdaq:NITE), and certain key officers and directors of those companies, on behalf of all persons who became customers of Ameritrade between March 29, 1995, and September 30, 2003. The action alleges that the defendants violated federal securities laws by failing to disclose their true affiliation with one another to Ameritrade customers. A class action has been filed against chemical and pharmaceutical manufacturer Cambrex Corporation (NYSE: CBM) and certain of its officers and directors by stockholders who purchased the company's common stock between October 21, 1998, and July 25, 2003. Several class actions have been filed against energy holding company Progress Energy, Inc. (NYSE: PGN) and certain of its officers and directors on behalf of investors who obtained Contingent Value Obligations (CVOs) in exchange for their Florida Progress common stock pursuant to the closing of the merger of CP&L Energy and Florida Progress Corporation and who purchased the CVOs between November 30, 2000, and February 12, 2002. The actions claim that the defendants violated federal securities laws by failing to inform prospective CVO holders that the tax benefits represented as being made available to synthetic fuel producers, which were critical to the imputed value of the CVOs, would be adversely affected by the application of the alternative minimum tax. A class action has been filed against Quest Software, Inc. (Nasdaq: QSFT) and certain of its officers and directors by stockholders who purchased the company's common stock between April 30, 2002, and July 23, 2003. A class action has been filed in the District Court of Maryland against RS Diversified Growth Fund, et al and certain of its officers and directors by stockholders who purchased the company’s common stock between October 6, 1999 and October 5, 2004. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company’s securities. The stockholders seek to recover compensatory damages for the loss of value of their stock. |
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