Several class actions have been filed against investment company Capital Management Investors Holdings, Inc., and its subsidiary, Security Trust Company, and certain of officers and directors by stockholders who purchased shares or other ownership units of Janus Worldwide Fund (Nasdaq:JAWWX), American Funds EuroPacific Fund (Nasdaq:AEPGX), MFS Emerging Growth Fund (Nasdaq:MFEGX), Legg Mason Value Trust Fund (Nasdaq:LMVTX), Artisan International Fund (Nasdaq:ARTIX), AXP International Y Fund (Nasdaq:IDIYX), SEI International Equity A Fund (Nasdaq:SEITX), SEI Emerging Markets I Fund (Nasdaq:SIEMX) or other mutual funds between May 22, 2000 and July 3, 2003. The actions claim that the defendants violated federal securities laws by utilizing an illegal after-hours market-timing scheme to make personal profits at the expense of personal investors. The investors seek to recover compensatory damages for the loss of value of their stock.

The action alleges that defendants Security Trust (an unregistered financial intermediary), Grant Seeger, Security Trust's former Chief Executive Officer, and William Kenyon, Security Trust's former president, facilitated and participated in fraudulent late trading and market timing schemes by a group of related hedge funds. From May 2000 to July 2003, the defendants facilitated hundreds of trades by the hedge funds in nearly 400 different mutual funds. Approximately 99% of these trades were transmitted to Security Trust after the 4:00 p.m. EST market close; 82% of the trades were sent to Security Trust between 6:00 p.m. and 9:00 p.m. EST. The hedge funds' late trading was effected by the defendants through Security Trust’s electronic trading platform, which was designed primarily for processing trades by third party administrators for retirement plans. Security Trust repeatedly misrepresented to mutual funds that the hedge funds were a retirement plan account, even though Security Trust's employees and senior management, including Seeger and Kenyon, knew that the hedge funds were not a third party administrator or a retirement plan account. The mutual funds expected that retirement plans and their third party administrators required several hours after the market closed to process trades submitted by thousands of plan participants before market close, but the hedge funds had no such business purpose for submitting their own trades as late as five hours after market close.

In addition to late trading, the defendants also allegedly assisted the hedge funds in various strategies -- some devised by Seeger -- to conceal their market-timing activities from mutual funds, including misrepresenting that the hedge funds were retirement accounts, allowing the hedge funds to trade in accounts marked with Security Trust's tax identification number, and "piggybacking" the hedge funds' timing trades on the trades of other Security Trust clients without their knowledge. Late trading allowed the hedge funds to trade mutual fund shares at the established 4:00 p.m. EST market close price based upon events reported after close of the market or perceived market momentum caused by after-hours trading. Market timing allowed the hedge funds to engage in short-term trading that exploited inefficiencies in mutual fund pricing. As a result of the late trading and market timing activities facilitated by the defendants, the hedge funds realized a profit of approximately $85 million. Security Trust had a compensation arrangement with the hedge funds that included a custodial fee as large as 1% (Security Trust charged most of its third party administrator clients a custodial fee of just .10%) and a 4% profit sharing arrangement with respect to most of the hedge funds' trades. Security Trust received over $5.8 million in direct compensation from the hedge funds. Late trading and market timing harmed mutual fund shareholders who did not participate in the scheme between Security Trust and the hedge funds.

On November 25, 2003, the SEC announced that it had brought civil charges against the Security Trust defendants based on the allegations as described; the New York State Attorney General announced that it had charged the Security Trust defendants with grand larceny, fraud and falsifying business records; and the Office of the Comptroller of the Currency, the federal bank regulator, ordered Security Trust to dissolve itself by March 31, 2004.

If you purchased shares of mutual funds managed by Security Trust between May 22, 2000, and July 3, 2003, you may request that the court appoint you as lead plaintiff no later than February 23, 2004. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order for you to be appointed lead plaintiff, the court must determine that your claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain counsel of your choice to serve you in this action, or you may choose to do nothing and remain a silent class member.