NEW YORK, Feb. 24, 2004 (PRIMEZONE) -- The deadline for all who purchased or otherwise acquired shares or other ownership units of Alliance Capital Management's (NYSE:AC) AllianceBernstein Family of Mutual Funds and Massachusetts Financial Services' Family of Mutual Funds, which is a subsidiary of Sun Life Financial, Inc. (SLF) (collectively referred to as the "Mutual Funds") to move for lead plaintiff in a securities fraud class action recently brought against the Company is rapidly approaching. If you purchased or otherwise acquired shares or other ownership units of the Mutual Funds between January 1, 2001 and September 30, 2003, inclusive (the "Class Period") and you wish to be a lead plaintiff in the case, you must move to serve as lead plaintiff by filing a motion in the United States District Court for the District of Nevada by March 5, 2004. A copy of the complaint filed in this action is available from the Court, or can be viewed on the firm's website at http://www.cauleygeller.com/show_case.asp?ccode=217&pcode=10&pp=4.
The complaint, filed by a client of Cauley Geller Bowman & Rudman, LLP, charges that Security Brokerage, Inc. ("Security Brokerage") and Daniel G. Calugar ("Calugar") violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, and aided and abetted in the breach of fiduciary duties. More specifically, the complaint alleges that from at least 2001 to September 2003, Calugar, trading through Security Brokerage, engaged in a scheme involving market timing of various mutual funds using investments totaling between $400-$500 million. Market timing refers to the practice of short term buying and selling of mutual fund shares in order to exploit inefficiencies in mutual fund pricing.
Most of Calugar's market timing trades were through two mutual fund families: Alliance Capital Management, LP ("Alliance") and Massachusetts Financial Services ("MFS") (collectively referred to as the "Mutual Funds").
Calugar also engaged in late trading of MFS and Alliance funds. Late trading refers to the practice of placing orders to buy or sell mutual fund shares after close of market at 4:00 p.m. EST, but at the mutual fund's Net Asset Value ("NAV"), or price, determined at the market close. Late trading enables the trader to profit from market events that occur after 4:00 p.m. EST but that are not reflected in that day's price. Because of Security Brokerage's status as a broker-dealer, it was permitted to submit trades received from its clients before 4:00 pm EST to the National Securities Clearing Corporation ("NSCC") after 4:00 p.m. EST.
Calugar and Security Brokerage thus participated in a scheme with Alliance and MFS to engage in market timing that most other fund investors were not permitted to do. The Mutual Funds as well as Calugar profited at the expense of such investors. Calugar and Security Brokerage made trading profits of $175 million from their market timing and late trading at Alliance and MFS. The Mutual Funds profited by way of increased advisory and other fees.
On December 22, 2003, the SEC filed civil fraud charges against Security Brokerage, and its president and majority owner, Calugar, for their participation in a scheme to defraud mutual fund shareholders through improper late trading and market timing. On December 24, 2003, the SEC announced that United States District Judge Robert Clive Jones of the District of Nevada issued a temporary restraining order freezing the assets of the defendants, prohibiting the destruction of documents, and granting expedited discovery.
If you are a member of the class described above, and you wish to serve as lead plaintiff, you must move the Court no later than March 5, 2004. If you are a member of this class, you can join this class action online at http://www.cauleygeller.com/template8.asp?pcode=6&pp=1. Any member of the purported class may move the Court to serve as lead plaintiff through Cauley Geller or other counsel of their choice, or may choose to do nothing and remain an absent class member.
Cauley Geller is a national law firm that represents investors and consumers in class action and corporate governance litigation. It is one of the country's premiere firms in the area of securities fraud, with in-house finance and forensic accounting specialists and extensive trial experience. Since its founding, Cauley Geller has recovered in excess of two billion dollars on behalf of aggrieved shareholders. The firm maintains offices in Boca Raton, Little Rock and New York.
If you have any questions about how you may be able to recover for your losses, or if you would like to consider serving as one of the lead plaintiffs in this lawsuit, you are encouraged to call or e-mail the Firm or visit the Firm's website at www.cauleygeller.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.