Tuesday, June 10, 2008
Fido Sued Over Bond Fund Losses
News summary by MFWire's editors
Holzer Holzer & Fistel
has filed a class action lawsuit against Fidelity
on behalf of shareholders of the Fidelity Ultra-Short Bond Fund
. The suit alleges that Fidelity did not adequately disclose the risks associated with investing in the Fund. Also, the suit alleges that because of the risky securities invested in by the fund, the share price dropped precipitously.
Two other big mutual fund companies are the target of similar suits. Morgan Keegan, Charles Schwab and State Street are also the target of lawsuits involving losses in bond funds.
Company Press Release
Holzer Holzer & Fistel, LLC Files a Shareholder Class Action Lawsuit on Behalf of Purchasers of Fidelity Ultra-Short Bond Fund (NASDAQ: FUSFX)
ATLANTA, GA--(Marketwire - June 10, 2008) - Holzer Holzer & Fistel, LLC announces that it has filed a class action lawsuit in the United States District Court for the District of Massachusetts on behalf of purchasers of the Fidelity Ultra-Short Bond Fund (the "Fund") (NASDAQ: FUSFX) who purchased the Fund between June 6, 2005 and June 5, 2008 (the "Class Period"). The complaint charges Fidelity Management & Research Company, among others, with violations of the Securities Act of 1933.
If you are a purchaser of the Fund during the Class Period, you have the legal right to petition the Court to be appointed a "lead plaintiff." A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. Any such request must satisfy certain criteria and be made on or before August 4, 2008. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. If you are a Fund investor and would like to discuss a potential lead plaintiff appointment, or your rights and interests with respect to the lawsuit, you may contact Michael I. Fistel Jr., Esq., or Marshall P. Dees, Esq. via email at firstname.lastname@example.org, or email@example.com, or via toll-free telephone at (888) 508-6832.
The complaint alleges that on or about August 23, 2002, defendants began offering shares of the Ultra-Short Bond Fund pursuant to an initial registration statement, filed with the SEC as a Form 485BPOS (the "Registration Statement"). The complaint alleges that defendants solicited investors to purchase shares of the Ultra-Short Bond Fund by making statements that described the Fund as a fund that: (i) "Seeks a high level of current income consistent with the preservation of capital"; (ii) "allocates its assets across different market sectors and maturities"; (iii) has a "similar overall interest rate risk to the Lehman Brothers® 6 Month Swap Index"; and (iv) is geared toward the "preservation of capital." As alleged in the complaint, these statements were materially false and misleading because defendants did not adequately disclose the risks associated with investing in the Fund, including, for example, that the Fund was: (i) failing to compete with the Lehman Brothers® 6 Month Swap Index; and (ii) so heavily invested in high-risk mortgage-backed securities.
As alleged in the complaint, by June 11, 2007, defendants slowly began lowering the value of the share price for the Ultra-Short Bond Fund. Since then, the value of the Ultra-Short Bond Fund's share price has been precipitously lowered. By November 15, 2007, the value of the per-share price was reduced below $9. The shares were trading as low as $8.25 as of the filing of the complaint.
Holzer Holzer & Fistel, LLC is an Atlanta, Georgia law firm that dedicates its practice to vigorous representation of shareholders and investors in litigation nationwide, including shareholder class action and derivative litigation. More information about the firm is available through its website, www.holzerlaw.com and upon request from the firm. Holzer Holzer & Fistel, LLC has paid for the dissemination of this promotional communication, and Michael I. Fistel, Jr. is the attorney responsible for its content.
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