UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
WILDLIFE-IN-NEED, INC., a not-for-
profit Florida corporation,
Plaintiff,
v. CASE NO. 96 1395
Class Action Complaint
FMR CORPORATION, a Massachusetts and Demand for Jury Trial
corporation; FIDELITY MANAGEMENT &
RESEARCH COMPANY, a Massachusetts
corporation; and FIDELITY MAGELLAN
FUND, a Massachusetts business trust,
Defendants.
_______________________________________/
CLASS ACTION COMPLAINT UNDER THE
PRIVATE SECURITIES LITIGATION REFORM
ACT OF 19951 AND DEMAND FOR JURY TRIAL
Plaintiff, WILDLIFE-IN-NEED, INC., hereby sues Defendants,
FMR CORPORATION, a Massachusetts corporation, FIDELITY MANAGEMENT &
RESEARCH COMPANY, a Massachusetts corporation, and FIDELITY
MAGELLAN FUND, a Massachusetts business trust, in this Class Action
Complaint, demands trial by jury of all issues so triable, and
alleges:
I. INTRODUCTION AND SUMMARY OF CLAIMS
This lawsuit is brought by Plaintiff on behalf of itself and
other investors who, during the period October 4, 1995 to
November 30, 1995, were tricked, misled and injured when Jeffrey
Vinik, portfolio manager of the FIDELITY MAGELLAN FUND, made
certain public statements touting Micron Technology, Inc., a
_____________________
1 This Class Action Complaint contains the detailed factual
predicate required by the Private Securities Litigation Reform Act
of 1995, which facially requires a more detailed set of factual
allegations than the short and plain statement normally required by
Rule 8 of the Federal Rules of Civil Procedure.
semiconductor manufacturing company, at the same time the FIDELITY
MAGELLAN FUND was, at Vinik's direction, selling shares of Micron
stock it owned. Vinik's statements temporarily and artificially
inflated and/or temporarily and artificially sustained the market
price of Micron Technology securities during the class period,
thereby allowing the FIDELITY MAGELLAN FUND to sell its Micron
Technology shares at a higher price than it otherwise could have.
This is a class action on behalf of all persons, other than
Defendants and their affiliates, who purchased common stock of
Micron Technology, Inc., during the period October 4, 1995, to
November 30, 1995. The factual and class action allegations and
the counts of liability are as follows:
I. Introduction and Summary of Claims
II. Jurisdiction and Venue
III. Parties
IV. Factual Allegations
V. Class Action Allegations
Count I - Violations of Section 10(b) of the
1934 Act and Rule 10b-5 Against All
Defendants
Count II - Violations of the Florida Securities and
Investor Protection Act (¡ì 517.301,
Florida Statutes) and Other State Statutes
Against All Defendants
Count III - Controlling Person Liability against
FIDELITY MANAGEMENT & RESEARCH COMPANY
2
Count IV - Controlling Person Liability Against
FMR CORPORATION
Count V - Negligent Misrepresentation Against All
Defendants
II. JURISDICTION AND VENUE
1. This Court has federal question jurisdiction of this case
or controversy pursuant to 28 U.S.C. ¡ì 1331, by virtue of
Section 27 of the Securities and Exchange Act of 1934 (the
"1934 Act"), 15 U.S.C. ¡ì 78aa.
2. This Court has supplemental jurisdiction over the
state law claims raised herein pursuant to 28 U.S.C. ¡ì 1367 because the
state law claims are so related to the original jurisdiction
federal claims raised herein that they form a part of the same case
or controversy under Article III of the United States Constitution.
Further, there exists no reason for this Court to decline to
exercise supplemental jurisdiction under subsection (c) of
28 U.S.C. ¡ì 1367.
3. Venue lies in the Middle District of Florida pursuant to
each or all of the following federal statutes:
(a) (Special venue provision): Section 27 of the
1934 Act, 15 U.S.C. ¡ì 78aa, as one or more of the acts or
transactions constituting violations of the 1934 Act occurred, each
or all of the Defendants may be found, each or all of the
Defendants is an inhabitant, or each or all of the Defendants
transacts business within this district; or
3
(b) (General venue provision): 28 U.S.C. ¡ì 1391(a), as
a substantial part of the acts or omissions giving rise to the
claims alleged herein occurred within this judicial district, and
the Defendants are subject to personal jurisdiction in this
district.
4. The case or controversy is appropriately heard in the
Tampa Division of the Middle District of Florida pursuant to Middle
District Local Rule 1.02(c), as the Tampa Division encompasses the
counties having the greatest nexus with the causes of action and
claims of the representative plaintiff alleged herein. Plaintiff,
WILDLIFE-IN-NEED, INC., is a Florida corporation with its principal
offices in Hillsborough County, Florida. Plaintiff purchased
shares of Micron Technology, Inc. common stock in Hillsborough
County, Florida, which is within the Tampa Division.
III. PARTIES
5. FIDELITY MANAGEMENT & RESEARCH COMPANY, hereinafter
"FMR COMPANY," is a corporation organized and existing under the
laws of the State of Massachusetts, and is a subsidiary of
FMR CORPORATION. FMR COMPANY manages the MAGELLAN FUND, including
the choosing of the FUND's investments and handling of its business
affairs. As manager of the MAGELLAN FUND, at all material times
mentioned herein, FMR COMPANY transacted business in the State of
Florida and throughout the United States.
6. FMR CORPORATION, hereinafter "FMR CORP.," is a
corporation organized and existing under the laws of the State of
Massachusetts, and is the parent corporation of FMR COMPANY. As
4
the parent and controlling entity of FMR COMPANY and, ultimately,
the MAGELLAN FUND, at all material times mentioned herein,
FMR CORP. transacted business in the State of Florida and
throughout the United States.
7. FIDELITY MAGELLAN FUND, hereinafter referred to as
"MAGELLAN" or "FUND" or "MAGELLAN FUND," is an open-end management
investment company organized and existing as a business trust under
the laws of the State of Massachusetts. It is presently the
world's largest mutual fund with approximately $56 billion under
management and, at all material times mentioned herein, transacted
business within the State of Florida and throughout the United
States. As a mutual fund, MAGELLAN is an investment that pools
shareholders' money and invests it toward a specified goal. The
FUND is managed by FMR COMPANY, a subsidiary of FMR CORP.
8. WILDLIFE-IN-NEED, INC., hereinafter referred to as "WIN",
is a not-for-profit corporation organized and existing under the
laws of the State of Florida. On November 15, 1995, WIN bought
three hundred (300) shares of Micron Technology, Inc. at $56.50 per
share. On May 29, 1996, WIN sold its shares of Micron Technology,
Inc., at $30.375 per share, for a loss of $7,837.50.
IV. FACTUAL ALLEGATIONS
9. Jeffrey Vinik joined Fidelity Investments in 1986 and
worked as a securities analyst there until 1989. In 1989, Vinik
became the portfolio manager for the Fidelity Contrafund and held
that position until 1990 when he was named the portfolio manager
for the Fidelity Growth & Income Fund.
5
10. In 1992, Vinik assumed the position of portfolio manager
of the FIDELITY MAGELLAN FUND, the largest Fidelity mutual fund,
and, in fact, the world's largest mutual fund. As of March 31,
1996, the MAGELLAN FUND held assets totaling more than $56 billion.
The MAGELLAN FUND is commonly regarded as the flagship of the
Fidelity family of mutual funds, which, combined, has been
estimated by Fidelity executives to account for 5% to 7% of all
trading on the New York Stock Exchange.2
11. Given the FIDELITY MAGELLAN FUND's market position,
anything that the FUND's portfolio manager, Jeffrey Vinik, did or
said would attract considerable attention, which was well-known to
Vinik, MAGELLAN, FMR CORP. and FMR COMPANY.
12. Vinik himself was closely watched by the marketplace, not
only because of his past successes and highly-regarded reputation
as a market timer, but also because of the fact that, given the
sheer volume of the MAGELLAN FUND's holdings, Vinik's plans,
strategies and trading could affect the market price of securities
it traded.
13. It was widely known that Vinik's comments and actions
were closely followed in this regard. For example, in the
November 13, 1995 issue of Computer Reseller News, Eric Kobren,
editor of Fidelity Insight, was quoted as acknowledging that "Vinik
is very powerful. Everybody on the street is looking to figure out
what he is doing."
_____________________
2 Robert McGough, A Top Fidelity Portfolio Manager Touted
Another Stock in the News as He Unloaded It, WALL ST. J. EUR.,
Dec. 18, 1995 at 26.
6
14. At the end of September, 1995, the FIDELITY MAGELLAN FUND
held approximately 40% of its assets in technology stocks. Because
of MAGELLAN's aggressive accumulation and holding of technology
stocks, at Vinik's direction, any stance Vinik took on any
technology stock drew particular attention.
15. The attention and interest in the plans of the MAGELLAN
FUND and Vinik in regard to technology stock was heightened by the
fact that tech stocks had rallied since approximately November,
1992, and market observers and investors were intently watching
Vinik and the MAGELLAN FUND for an indication of the future
direction of the technology stock market.
16. By at least mid-1995, the scrutiny and following Vinik
and MAGELLAN had drawn in regard to technology stocks became a
matter of common knowledge in the securities industry. As Michael
Murphy, editor of the California Technology Stock Letter, was
quoted in the July 1, 1995 issue of Money:
When Jeff Vinik calls the first broker with
the first sell order, everyone will hear about
it. And they'll all try to sell.
Further, Mr. Murphy predicted that such a call by Vinik would
result in many "hot" technology stocks plummeting 20% or more.
17. The MAGELLAN FUND's heavy weighting of technology stocks
placed it in a precarious position should the technology sector
experience a downturn. This would be true for virtually any fund
or investor with almost half its investment in a single market
sector, but was especially the case for the MAGELLAN FUND due to
the sheer volume of technology stocks which it held.
7
18. If and when the MAGELLAN FUND unloaded its technology
stock holdings, the market price of the unleashed stock(s) (and
possibly technology stocks in general3) would almost certainly drop
for at least two reasons. First, the market supply of the unloaded
stock would be substantially and suddenly increased. Second,
analysts and the market in general closely watched and often
mimicked4 Vinik and MAGELLAN's actions because of the high regard
for Vinik's market acumen and the generally accepted prediction
that MAGELLAN's selling would have a downward effect on the subject
stock's price. Thus, once word got out that Vinik and MAGELLAN
were unloading technology stocks, large portions of the market
would follow suit, and further exacerbate the downward pressure on
price already in motion from MAGELLAN's selling.5
19. By the fall of 1995, Vinik was being widely criticized
for the MAGELLAN FUND's heavy emphasis on, and resulting exposure
_______________________
3 "The mere suggestion that Vinik might cash out of his
high-tech holdings has made computer industry executives squirm
this year, as the impact could result in a huge sell-off that would
likely sink most high-tech stocks, even those Vinik's fund doesn't
own." Elliot Markowitz, Jeff Vinik No. 13, COMPUTER RESELLER NEWS,
November 13, 1995 at 145.
4 "But Wall Street loves to trade on rumors about what
Fidelity is doing." John Waggoner, Is Magellan Too Big to manage?,
USA TODAY, December 12, 1995.
5 Indeed, some investors had recognized, and had been
taking advantage of the technology sector influence of Vinik and
MAGELLAN since at least early 1995; "Some short sellers have even
begun to target 'Vinik stocks,' like Oracle Systems, Micron
Technology and Motorola, in which Magellan owns significant stakes.
They figure that if big withdrawals ever hit Magellan, technology
stocks will crumble under the weight of Vinik's selling." Andrew
Bary, Humbled Giant; Gaffes, weak performers tarnish Fidelity's
reputation, BARRON'S, January 9, 1995 at F20.
8
with regard to, the technology sector. At about the same time,
particularly because of a slowdown in the sale of personal
computers, many securities dealers and analysts, and the market in
general, began questioning the market valuations of technology
stocks. Such stocks had experienced significant gains accompanying
the fierce buying of Vinik and MAGELLAN and their followers through
the first three quarters of 1995. Despite the power Vinik and
MAGELLAN had to drive up the price of a single stock or sector, a
growing number of market analysts and investors began questioning
whether technology stocks had hit a peak and, in fact, might be
overvalued. Thus, "as investors waited with baited breath for a
severe tech sell-off, the attention on Vinik was magnified."6
20. At this point, the pressure on Vinik was enormous. He
faced a virtual "no-win" situation. If he maintained MAGELLAN's
large technology positions and the sector downturned, the results
would be devastating for the FUND. On the other hand, as described
more fully above, directing a sell-off of MAGELLAN's technology
holdings would almost instantaneously spark broad-based technology
stock selling, especially in regards to the specific stocks in
which MAGELLAN had its largest positions. This would, in turn,
cause a rapid and extreme devaluation of the stocks in question,
which would also result in losses for the FUND. It was this
"no-win" situation which motivated the fraud on the market
perpetrated by Defendants.
_____________________
6 Michael DeMarco, Mutual Fund Growth & Income Association
Believes Vinik's Magellan Fund is Powering Selective Tech Stocks,
BUSINESS WIRE, February 7, 1996.
9
21. Whenever questioned, Vinik routinely countered the
concerns of market analysts over the supposed impending technology
"sell-off" with optimism for the sector.
22. For example, in the July 1, 1995 issue of Money, Vinik
was quoted as stating in a recent television interview:
In my opinion, technology is only in the third
or fourth inning of its bull market. I expect
to be with these stocks for quite a while.
23. In the October 4, 1995 issue of USA Today, Vinik was
quoted as saying:
[t]he stocks are up, but so are the
fundamentals. It's very unlikely I'd wake up
one morning and decide to dump technology.
Further, Vinik forecasted the MAGELLAN FUND's continued massive
foray into the technology sector:
Could the fund's technology position go down
5% to 10% over the next year? Sure. But
we're very bullish on the sector.
Interestingly, Vinik made these statements at or about the same
time that MAGELLAN is now known to have started its incredible
technology stock sell-off which resulted in the FUND's percentage
of technology stock to fall from over 40% (or over $21 billion) at
the start of October, 1995 to approximately 3.5% (or less than $2
billion) in March, 1996.
24. Harry Lange, a portfolio manager of two Fidelity
technology sector funds, Fidelity Select Technology and Fidelity
Select Computers, and the chief technology stock analyst for all
Fidelity funds, likewise offered positive remarks for technology
stocks in the September 4, 1995 issue of Barron's:
10
[V]aluations still aren't that high.
Technology will continue to be a good place to
invest.
More specifically, also in the September 4, 1995 issue of Barron's,
Lange made the following comments about his continued belief and
devotion to his sector funds' largest holding, Micron Technology,
Inc.:
Lots of PCs still go out the door with less
memory than people really want. People will
want to upgrade. Unit growth is going up so
fast, doubling year after year.
25. The MAGELLAN FUND began accumulating Micron Technology,
which is a designer and manufacturer of semiconductors or "computer
chips" and is generally regarded as a "high-tech" or technology
stock holding by securities analysts, since, at least, mid-1994.
According to MAGELLAN's semi-annual report for the period ending
September 30, 1994, filed with the Securities and Exchange
Commission on November 7, 1994, the FUND held over 6.5 million
shares, or approximately $230 million worth of Micron stock as of
September 30, 1994.
26. On September 1, 1994, Vinik was quoted in the Wall Street
Journal praising the prospects of Micron Technology stock, despite
the fact that the stock's price had recently fallen. Specifically,
Vinik stated that, as for technology stocks, he was "bullish" and,
the outlook for Micron in particular was "excellent."
27. At Vinik's direction, the MAGELLAN FUND steadily
increased its holdings of Micron in the ensuing months.
11
28. By March 31, 1995, the MAGELLAN FUND held over
6.5 million shares, or $490 million worth, of Micron Technology
stock.
29. As of September 30, 1995, the FIDELITY MAGELLAN FUND was
one of the largest shareholders of Micron Technology, Inc., owning
over 11 million shares, or $935 million worth, of its common stock,
which amounted to more than 5% of Micron's voting securities.7
30. Likewise, as of September 30, 1995, Micron Technology
constituted approximately 1.7% of the MAGELLAN FUND's total
investments, making it the FUND's third largest single holding.
Additionally, at that time, Micron Technology was the FUND's second
largest technology holding, behind only Hewlett Packard Co., which
constituted approximately 2% of MAGELLAN's total investments.
31. Despite the increasing pressure in the fourth quarter of
1995 to sell technology stocks in general, and shares of Micron
Technology in particular, Vinik's public stance in favor of both
remained firm. In fact, according to a December 11, 1995, article
in U.S. News & World Report, Vinik told the magazine in an
interview on November 6, 1995, that Micron Technology is a stock
whose:
[v]aluations are reasonable and the
fundamentals are still outstanding.
_____________________
7 Additionally, the parent company of MAGELLAN and FIDELITY
MANAGEMENT & RESEARCH COMPANY, FMR CORP., held a substantial number
of Micron Technology shares in the fall of 1995. In fact,
according to filings with the Securities & Exchange Commission,
FMR CORP. held 15.6 million shares of Micron Technology's stock as
of October 31, 1995. FMR CORP.'s holding of 15.6 million shares
amounted to approximately 9.9% of the computer chip manufacturer's
stock.
12
Vinik also told U.S. News & World Report on November 6, 1995 that:
[i]n October, when technology indices were
down 20 percent, rumors were rampant that
MAGELLAN was selling -- it didn't happen.
32. Similarly, on November 7, 1995, the Boston Globe's online
newspaper reported Vinik's comments on MAGELLAN's substantial
holdings of technology stock, stating:
There is nothing I'm hearing from companies
that would have me change my heavy exposure.
33. Interestingly, on November 7, 1995, the day after Vinik's
positive statements to U.S. News & World Report about Micron
Technology and the same day as his positive statements about the
technology sector in general to the Boston Globe, two influential
Wall Street analysts lowered their expectations for Micron
Technology's earnings.8 On that day, Micron Technology's stock
price fell more than $3 per share on 18 million shares traded.
34. Despite the prominent position that the FIDELITY MAGELLAN
FUND occupied in the nation's marketplace, Vinik had typically
avoided public interviews and comments on the investment activities
or strategies of the MAGELLAN FUND. The fact that the Micron
interviews took place at all, therefore, lent extra weight to
Vinik's comments.
35. Vinik only regularly made comments in the FIDELITY
MAGELLAN FUND's annual and semi-annual reports regarding his
activities and strategies. As a matter of course, these reports
_____________________
8 Robert McGough and Jeffrey Taylor, SEC Boosts Its
Scrutiny of Magellan Fund, WALL STREET JOURNAL, December 11, 1995 at
C1; and John Waggoner, Is Magellan Too Big to Manage?, USA TODAY,
December 12, 1995 at 1B.
13
were sent to millions of MAGELLAN shareholders and others and were
filed with the Securities and Exchange Commission, thus making the
reports readily available to anyone interested. These reports were
heavily scrutinized by stock analysts and the general investing
public for any signal as to what Vinik forecasted for the FUND or
the market. Some business publications went so far as to feature
regular columns devoted to the dissemination of information Vinik
released in the reports.
36. One such semiannual report for the FIDELITY MAGELLAN FUND
which caught the eye of securities analysts and the marketplace was
the semiannual report for the period ending September 30, 1995,
filed with the Securities and Exchange Commission on November 9,
1995, three days after Vinik's statements to U.S. News & World
Report.
37. In this semiannual report, Vinik answered various
questions regarding MAGELLAN's position on technology stocks. In
one question, Vinik was asked:
Q. THE FUND'S STAKE IN TECHNOLOGY HAS
DROPPED A BIT FROM 42.6% SIX MONTHS AGO TO
39.9% ON SEPTEMBER 30. DOES THAT MEAN YOU'VE
BEEN SELLING THESE STOCKS?
Vinik's answer was, in part, as follows:
A. This reduction does not represent a
change in my long-term view of the technology
sector. My outlook on technology spending in
the U.S. and around the world over the next
several years continues to be very
positive. . . . [A]s I build the fund on a
stock-by-stock basis, I continue to find that
a majority of stocks with excellent long-term
earnings prospects and attractive valuations
fall into the technology group.
14
38. Vinik was also asked:
Q. WHAT ARE SOME OF THE RISKS TIED TO
INVESTING NEARLY 40% OF THE FUND IN THIS
SECTOR?
Vinik answered, in pertinent part:
A. [I] anticipate that the fund will remain
overweighted in technology relative to the
broad market for the foreseeable future.9
39. Additionally, Vinik was asked the question:
Q. WHICH TECHNOLOGY NAMES HELPED THE FUND
MOST?
Vinik's answer was, in part:
A. As a group, the semiconductor companies
experienced the strongest earnings momentum
and stock price gains. The demand for
semiconductors -- for use in personal
computers as well as a wide array of other
consumer products -- continued to exceed the
available supply. In addition, the evalua-
tions of semiconductor stocks were quite
depressed entering the period. Micron
Technology is a good-example of these dynamics
at work. Its stock price more than doubled
during the period , yet earnings grew so
quickly that, in my view, the stock is still
relatively cheap. (Emphasis added.)
___________________
9 As a possible further indication of his resolve to
maintain MAGELLAN's large technology holdings and not engage in a
technology sell-off as analysts speculated, Vinik stated in the
semi-annual report that, "I acquire stock positions slowly, over a
period of time, and sell positions slowly, over a period of
time. . ." (Emphasis added.) These remarks mirror Vinik's
statements appearing in the MAGELLAN March 31, 1995 annual report,
filed with the Securities and Exchange Commission on May 8, 1995:
"I don't really focus on how the market behaves over a week's,
month's or even a year's time. . . . My strategy always has been
to build the fund stock by stock, searching out those companies
that show the best prospects for strong earnings growth over the
next several years. And right now I'm finding the vast majority of
these companies in the technology sector." (Emphasis added.)
15
40. As with Vinik's other statements about the FUND's
investment decisions, word of his comments about Micron Technology
assimilated quickly throughout the securities media and the market.
In fact, on November 9, 1995, on CNBC's news segment, "The Money
Wheel," Dan Dorfman reported:
Well, let's get to -- talk about Fidelity. I
hear it's been a big-time buyer today of
Micron -- Micron Technology. . . .
41. Similarly, the November 13, 1995 issue of Computer
Reseller News boasts of Vinik's resolve regarding the technology
sector despite the obvious risks of placing such a heavy emphasis
on one sector and the inevitable criticism which accompanies such
a strategy. Further, the article quoted securities industry
professionals who admired Vinik's fortitude:
Vinik has been widely criticized for this
heavy emphasis on one sector. Rumors of him
dumping issues to better balance the fund have
resulted in some one-day technology drops this
year initiated by smaller, nervous investors.
Other fund managers, however, admire his
stance, at least publicly.
'I think the position he took in technology
stocks shows some supreme courage for a broad-
based fund like Magellan,' says Chip Morris,
vice president of T. Rowe Price Associates,
Baltimore. 'If and when there is a broad-
based correction in technology stocks, it will
be because the fundamentals erode.'
42. Vinik was a sophisticated market trader. He knew that
when he decided to unload his massive holdings in technology
stocks, including Micron Technology, he would face problems and
difficulties. In an interview published in the June 26, 1995,
issue of Business Week, Vinik was asked:
16
Q. YOU HAVE ENORMOUS HOLDINGS IN MANY
COMPANIES, SOME WORTH OVER $1 BILLION. DO YOU
WORRY ABOUT YOUR ABILITY TO UNWIND LARGE
POSITIONS IN A BEAR MARKET?
Vinik's answer was, in part:
A. I worry about bull markets, bear markets,
corrections.
43. Because Vinik was aware that favorable comments about
Micron Technology would increase or maintain the stock's market
price while Vinik was in fact selling MAGELLAN's holdings, Vinik,
in the course and scope of his employment with MAGELLAN, and for
the benefit of Defendants, deliberately attempted to influence, and
did influence, the market price of Micron Technology, Inc. stock so
that MAGELLAN and FMR CORPORATION would be able to sell their
Micron shares to optimistic buyers.
44. Ironically, Vinik's publicly-affirmed resolve to stay
with technology stocks, despite all the supposed pressure on him
not to do so, were made while, unbeknownst to Plaintiff Class
members and the investing public, MAGELLAN and FMR were in fact -
contrary to their public statements -- dumping massive blocks of
technology stocks, including Micron Technology.
45. Unbeknownst to the Plaintiff and Class members, during
approximately the same periods when Vinik was making the mentioned
and other similar statements touting Micron Technology stock and
technology stocks in general, Vinik was secretly selling and
directing and was continuing to secretly direct the sale of a
17
substantial portion of MAGELLAN's Micron stock.10 Regulatory
filings show that MAGELLAN began dumping its Micron Technology
stock in, October, 1995, selling approximately 1.3 million shares or
about 11% of its position in the stock in that month. After
dumping 1.3 million shares in October, 1995, Vinik caused MAGELLAN
to secretly sell approximately 4.4 million shares of the FUND's
holding during the first week of November, 1995 11 and approximately
3.5 million shares in the second and third weeks of November, 1995.
Thus, now published reports indicate that the MAGELLAN FUND sold
approximately 9.2 million shares of Micron Technology or 78% of its
Micron Technology, Inc. holding between October 1, 1995 and
November 30, 1995, with the bulk of the shares sold in November,
1995. This massive sell-off was concealed by false assurances to
the contrary by Defendants and was generally unknown to the
Plaintiff, Class members and the investing public until December,
1995, after Defendants' deceit had been accomplished.
_____________________
10 Further, MAGELLAN and FMR COMPANY's parent, FMR CORP.,
had been selling its holdings of Micron Technology since early
October, 1995. According to FIDELITY's Securities & Exchange
Commission filings, FMR CORP. sold approximately 2.7 million shares
of Micron Technology in October, 1995 in addition to the approxi-
mate 1.3 million shares MAGELLAN unloaded in that same month.
FMR CORP., like MAGELLAN, also continued unloading Micron
Technology stock in November, 1995. By the end of November, 1995,
FMR CORP. owned less than 1.2 million shares or less than 1% of
Micron Technology, down from the 15.6 million shares and nearly
10% holding it had only a month earlier. Vinik's statements were
the cover for this concentrated selling.
11 The flurry of FIDELITY's trading in the first week of
November, 1995 resulted in the MAGELLAN FUND and other FIDELITY
funds constituting approximately 12% of all trading volume during
that week. Brett Fromson, Fidelity Magellan's Chief Quietly Sells
Tech Shares: Big Mutual Fund's Manager Has Been Publicly Bullish
On Technology Holdings, WASHINGTON POST, December 1, 1995 at D1.
18
46. Vinik's public statements and actions temporarily and
artificially inflated or sustained the market price of Micron
Technology stock during the Class period, thereby allowing FIDELITY
MAGELLAN FUND and FMR CORPORATION to sell the shares at a higher
price than they otherwise would have gotten during the Class period
by, in effect, selling the inflated stock to the Plaintiff Class.
On November 9, 1995 (the day of MAGELLAN's false SEC filing
containing Vinik's positive remarks about Micron) alone, Micron's
share price rose $3 per share over the previous day's price, the
result intended by Defendants so as to effectuate the dumping of
the volume of shares MAGELLAN was unloading during the same period.
47. On October 4, 1995, the share price of Micron Technology
closed at 71 1/8. The share price of Micron Technology on November 6,
1995, the day Vinik made the comments to U.S. News & World Report,
closed at 64 1/2. On November 9, 1995, the day the FIDELITY MAGELLAN
FUND's annual report for the period ending September 30, 1995 was
filed with the Securities and Exchange Commission, Micron closed at
65. From November 6, 1995 to December 1, 1995, Micron's closing
prices fluctuated from a high of 65 to a low of 47 3/4.
48. On December 1, 1995, The Washington Post reported that,
according to confidential MAGELLAN trading information (it somehow
unexpectedly obtained), Vinik in fact had been selling MAGELLAN's
Micron Technology stock during October and November, 1995. U.S
News & World Report reported substantially the same in its
December 11, 1995 issue.
19
49. The representative Plaintiff, WILDLIFE-IN-NEED, INC., in
reliance upon the price of Micron Technology, Inc., as set by an
impersonal and unmanipulated securities market, and in reliance on
one or more of the mentioned statements touting Micron Technology
stock, and technology stocks in general, bought three hundred (300)
shares of Micron Technology, Inc., on November 15, 1995, at $56.50
per share. (These shares were probably bought indirectly from the
Defendants, who were saying one thing and doing another.)
50. As expected, once the marketplace learned that Vinik had
been selling MAGELLAN's holdings of Micron Technology stock on
December 1, 1995, Micron's stock price dropped like a stone. By
January 3, 1996, Micron's share price was below 40, and has since
essentially descended.
51. On May 29, 1996, the representative Plaintiff, WILDLIFE-
IN-NEED, INC., sold its shares of Micron Technology, Inc., at
$30.375 per share, for a loss of $7,837.50. Micron's share price
closed on Monday, July 15, 1996, at 19.
52. Plaintiff and other members of the Class would not have
purchased Micron Technology stock at the market prices they paid,
or at all, if they had been aware that the market prices had been
temporarily, artificially and falsely inflated or sustained by the
mentioned false and misleading statements as to the desirability of
Micron Technology stock or that the aforementioned statements were,
in fact, false, or both.
Likewise, Plaintiff and other Class members would not
have purchased Micron stock if they had been informed that, despite
20
continuous praise by Vinik and other Fidelity fund managers,
MAGELLAN and FMR CORP., were, in actuality, dumping Micron stock.
53. Because of the Defendants' actions, at the time of the
purchase of Micron Technology common stock by Plaintiff and the
other members of the Class, the true fair market value of the stock
was substantially less than the prices actually paid by Plaintiff
and the other Class members.
V. CLASS ACTION ALLEGATIONS
54. This action is brought as a class action under Rules
23(a) and 23(b)(3) of the Federal Rules of Civil Procedure on
behalf of a class (the "Class") consisting of:
All persons who purchased the common stock of Micron
Technology, Inc. during the period October 4, 1995
through November 30, 1995, inclusive (the "Class
Period").
Excluded from the Class are the Defendants named herein,
members of the immediate family of the individual Defendants, any
entity in which any Defendant has a controlling interest, and the
legal affiliates, representatives, heirs, controlling persons,
successors, employees, and predecessors in interest or assigns of
any such excluded party.
55. The Class in this matter is composed of, at a minimum,
persons in numerous and various locations throughout the United
States where shares of Micron Technology were traded.
56. Because over 200 million shares of Micron Technology's
common stock were outstanding during the Class Period and because
Micron Technology's common stock was actively traded on the New
York Stock Exchange during the Class Period, the number of Class
21
members is so large that joinder of all members is impracticable.
While the exact number of Class members can only be determined by
appropriate discovery, Plaintiff believes that Class members number
at least in the thousands and that they are geographically well-
disbursed throughout the United States.
57. Plaintiff's claims are typical of the claims of the
members of the Class because Plaintiff and all of the Class members
sustained damages arising out of the Defendants' wrongful conduct
complained of herein.
58. Plaintiff is an adequate representative of the Class.
59. Plaintiff will fairly and adequately protect the
interests of the Class members and has retained counsel who are
experienced and competent in class and securities litigation and
intend to prosecute this action vigorously. Plaintiff has no
interest which is contrary to or in conflict with those members of
the Class Plaintiff seeks to represent.
60. A class action is superior to all other available methods
for the fair and efficient adjudication of this controversy
because, among other things, joinder of all members of the Class is
impracticable. Furthermore, as the damages suffered by individual
members of the Class may be relatively small, the expense and
burden of individual litigation make it impossible for the members
of the Class individually to redress the wrongs done to them.
Plaintiff knows of no difficulty that will be encountered in the
management of this litigation that would preclude its maintenance
as a class action.
22
61. There exist numerous common questions of law and fact in
this matter within the meaning of Rule 23(a)(2) of the Federal
Rules of Civil Procedure. These numerous common questions of law
and fact common to the members of the Class predominate over any
questions which may affect only individual members within the
meaning of Rule 23(b)(3) and Defendants have committed a series of
uniform or general wrongs applicable to the Class.
62. Among the questions of law and fact common to the Class
are:
(a) Whether the federal securities laws were violated by
Defendants' acts as alleged herein;
(b) Whether Defendants participated in and pursued the
common course of conduct complained of herein;
(c) Whether Defendants acted fraudulently, willfully or
recklessly in omitting and/or misrepresenting material facts;
(d) Whether the market price of Micron Technology, Inc.
common stock during the Class Period was artificially sustained,
inflated or otherwise manipulated due to the misrepresentations and
omissions complained of herein;
(e) Whether Defendants violated Section 10(b) of the
1934 Act and Rule 10b-5 by employing devices, schemes or artifices
to defraud; by omitting to state material facts necessary to make
the statements made, in light of the circumstances under which they
were made, not misleading; and/or by engaging in transactions,
practices or courses of business which operated as frauds or
deceits, in connection with the sale of securities;
23
(f) Whether those Defendants who were controlling
persons are liable as controlling persons for violations of Section
10(b) of the 1934 Act and Rule 10b-5;
(g) Whether Defendants violated Section 517.301 of the
Florida Statutes by employing devices, schemes or artifices to
defraud; by obtaining money or property by means of omissions to
state material facts; and/or by engaging in transactions, practices
or courses of business which operated as frauds or deceits;
(h) Whether there existed among the Defendants a common
scheme to defraud; and
(i) whether the members of the Class have sustained
damages and, if so, what is the appropriate measure of damages.
COUNT I
VIOLATIONS OF ¡ì 10(b) OF THE SECURITIES EXCHANGE
ACT OF 1934 AND RULE 10b-5 PROMULGATED THEREUNDER
AGAINST ALL DEFENDANTS
63. Plaintiff realleges paragraphs 1 through 53 and
incorporates said paragraphs herein by reference.
64. All Defendants violated ¡ì 10(b) of the 1934 Act and Rule
10b-5 thereunder, 17 C.F.R. ¡ì 240.10(b)-5, by directly or
indirectly, through the use of various means of interstate
commerce or of the mails, or of various facilities of national
securities exchanges:
(1) employing a scheme to defraud the Plaintiff and
Class members by artificially inflating or manipulating the value
of Micron Technology, Inc. common stock, as described in paragraphs
9 through 53 of this Complaint;
24
(2) making untrue statements of material fact and
omitting to state material facts necessary in order to make the
statements made, in the light of the circumstances under which they
were made, not misleading, in order to inflate, sustain or
otherwise manipulate the price of Micron Technology, Inc. common
stock, as described in paragraphs 9 through 53 of this Complaint;
and
(3) engaging in acts, practices and courses of business
which operated as frauds on the Plaintiff and Class members in
connection with the sale of Micron Technology, Inc. common stock,
all as alleged in this Complaint in paragraphs 9 through 53.
Materially Misleading Statements and Omissions
65. The materially misleading statements and omissions made
by Defendants, FMR CORPORATION, FIDELITY MANAGEMENT & RESEARCH
COMPANY, and FIDELITY MAGELLAN FUND, include the following:
(a) The above-referenced Defendants, through FIDELITY
MAGELLAN FUND portfolio manager, Jeffrey Vinik, promoted and touted
Micron Technology, Inc. stock and technology stocks in general
during and surrounding the Class period of October 4, 1995 to
November 30, 1996 by making the following misleading statements:
(i) In the October 4, 1995 issue of USA Today
Vinik was quoted as saying:
[t]he stocks are up, but so are the
fundamentals. It's very unlikely I'd
wake up one morning and decide to
dump technology.
Further, Vinik stated that the MAGELLAN FUND
would continue buying into the technology sector:
25
Could the fund's technology position
go down 5% to 10% over the next year?
Sure. But we're very bullish on the
sector.
(ii) On November 6, 1995, during a magazine
interview, Vinik told U.S. News & World Report that Micron
Technology is a stock whose:
[v]aluations are reasonable and the
fundamentals are still outstanding.
Vinik also told U.S. News & World Report on
November 6, 1995 that:
[i]n October, when technology indices
were down 20 percent, rumors were
rampant that MAGELLAN was selling --
it didn't happen.
(iii) Similarly, on November 7, 1995, the Boston
Globe's online newspaper reported Vinik's comments on
MAGELLAN's substantial holdings of technology stock, stating:
There is nothing I'm hearing from
companies that would have me change
my heavy exposure.
(iv) In the FIDELITY MAGELLAN FUND semiannual
report for the period ending September 30, 1995, filed with
the Securities and Exchange Commission and otherwise generally
available to the market on November 9, 1995, Vinik was asked
various questions regarding MAGELLAN's position on technology
stocks. In one question, Vinik was asked:
Q. THE FUND'S STAKE IN TECHNOLOGY
HAS DROPPED A BIT FROM 42.6% SIX
MONTHS AGO TO 39.9% ON SEPTEMBER 30.
DOES THAT MEAN YOU'VE BEEN SELLING
THESE STOCKS?
26
Vinik's answer was, in part, as follows:
A. This reduction does not
represent a change in my long-term
view of the technology sector. My
outlook on technology spending in the
U.S. and around the world over the
next several years continues to be
very positive. . . . [A]s I build the
fund on a stock-by-stock basis, I
continue to find that a majority of
stocks with excellent long-term
earnings prospects and attractive
valuations fall into the technology
group.
(v) Vinik was also asked in the report released
November 9, 1995:
Q. WHAT ARE SOME OF THE RISKS TIED
TO INVESTING NEARLY 40% OF THE FUND
IN THIS SECTOR?
Vinik answered, in pertinent part:
A. [I] anticipate that the fund
will remain overweighted in
technology relative to the broad
market for the foreseeable future.
(vi) Additionally, in the report released
November 9, 1995, Vinik was asked the question:
Q. WHICH TECHNOLOGY NAMES HELPED
THE FUND MOST?
Vinik's answer was, in part:
A. As a group, the semiconductor
companies experienced the strongest
earnings momentum and stock price
gains. The demand for semiconductors
-- for use in personal computers as
well as a wide array of other
consumer products -- continued to
exceed the available supply. In
addition, the evaluations of semi-
conductor stocks were quite depressed
entering the period. Micron
Technology is a good example of these
27
dynamics at work. Its stock price
more than doubled during the period,
yet earnings grew so quickly that, in
my view, the stock is still
relatively cheap. (Emphasis added)
(vii) Vinik also stated in the November 9, 1995,
semiannual report that, "I acquire stock positions slowly,
over a period of time, and sell positions slowly, over a
period of time. . . ." (Emphasis added.)
(b) Defendants failed meaningfully, or at all, to
disclose that, during and surrounding the time at which the above-
referenced statements were made, Defendants were engaging in a
massive sell-off of technology stock holdings and holdings of
Micron Technology, Inc., in particular.
Scienter
66. Defendants acted with scienter with regard to the overall
scheme and the mentioned specific misrepresentations and omissions
implementing the scheme to inflate, sustain or otherwise manipulate
the market price of Micron Technology stock so as to profit from
selling or continuing to sell shares of Micron Technology stock at
price(s) higher than what would have prevailed absent Defendants'
misrepresentations and omissions.
67. The demonstration of Defendants' scienter with respect to
the overall scheme and the specific misrepresentations and
omissions is in paragraphs 9 through 53, and also specifically,
below.
68. Defendants had a motive and opportunity to inflate,
sustain or otherwise manipulate the market price of Micron
28
Technology stock and to make the aforementioned misleading
statements and omissions.
69. Defendants had a motive to engage in the aforementioned
scheme and make the aforementioned misrepresentations and omissions
because doing so would enable the Defendants to sell the MAGELLAN
FUND's (and other funds') shares of Micron Technology at a price
higher than they otherwise could have, which would increase the
sale price on these shares and decrease or eliminate the loss the
FUND would absorb selling the shares at the lower, true market
price. This, in turn, increased the profitability or decreased or
eliminated the loss the FUND would experience on this particular
stock and overall, which would generate more administrative,
management or other fees charged by Defendants either directly or
indirectly by, among other things, attracting more investors or
shareholders into the MAGELLAN FUND or other FIDELITY funds also
under the management and/or control of FMR CORP. and/or
FMR COMPANY.
70. The opportunity to mislead Plaintiff and Class members
existed because the true trading activities of Defendants would not
normally be publicly disclosed immediately prior to, during or
after the Defendants' actual trading. Defendants had the
opportunity to tell the Class one thing while doing another,
without anyone being the wiser until after the fact. Further, the
opportunity to mislead Plaintiff, Class members and the market in
general existed because of the far-reaching attention and following
29
the MAGELLAN FUND and its manager, Vinik, had developed. As the
president of one brokerage and research firm put it:
Everyone [on Wall Street) is obsessed because
they know that if they are on the wrong side
of Fidelity, they are going to get hurt. If
they are on the right side, they are going to
get helped.12
71. Securities analysts and commentators in general were
forecasting a downturn in the technology sector, which would have
had a substantial adverse effect on the MAGELLAN FUND. The
numerous securities industry publications referenced above and
Vinik's own comments and statements, especially those at paragraphs
22, 23 and 31, establish additional scienter.
72. Scienter is further established regarding Micron
Technology by, among other things, the extreme proximity of Vinik's
November 6, 1995 statements to U.S. News & World Report and the
November 7, 1995 Boston Globe article reporting Vinik's touting of
technology stocks; but two influential Wall Street analysts lowered
their expectations for Micron Technology's earnings on November 7,
1995.13 This is especially salient given the relatively
significant holdings that the MAGELLAN FUND and FMR CORP., alone
and combined, had in Micron Technology at that time and in the
preceding months.
73. Scienter is established as to the market following and
influence of Vinik and the Defendants as they knew the effect of
_____________________
12 Brett Fromson, Fidelity Magellan's Chief Quietly Sells
Tech Shares: Big Mutual Fund's Manager Has Been Publicly Bullish
On Technology Holdings, WASHINGTON POST, December 1, 1995 at D1.
13 See paragraph 33.
30
their comments on the market price and the effect of making
positive statements about a given stock while selling it, is
evidenced by the fact that MAGELLAN and Vinik had previously
engaged in, been criticized for and are believed to have been
investigated for similar, or virtually the same, actions. Vinik,
also while the portfolio manager of the MAGELLAN FUND, was
interviewed by Barron's shortly before its September 19, 1994 issue
was published. One of the subjects discussed in the interview was
Goodyear Tire & Rubber, which was one of MAGELLAN's major stock
holdings. Goodyear stock accounted for about 1% of MAGELLAN's
assets at the end of March, 1994. Vinik, under selling pressure
with regard to Goodyear, told Barron's that he had already sold
about half his position in Goodyear. Vinik also told Barron's,
however, that he was planning to keep the FUND's remaining shares
because the company's cost-cutting was excellent, and the company
was doing well in foreign markets and in maintaining its margins.
According to MAGELLAN's later-released semiannual report, however,
by September 30, 1994, the FUND had sold all of its Goodyear
stock.14
74. Scienter with respect to the material omissions made by
Defendants is evidenced by the statements Vinik made not merely
touting Micron Technology's stock, but touting it at a time while
he was directing the MAGELLAN FUND's selling of same. Also
evidencing scienter in this regard are Vinik's statements
______________________
14 See Robert McGough, A Top Fidelity Portfolio Manager
Touted Another Stock in the News as He Unloaded It, WALL ST. J. EUR.,
Dec. 18, 1995 at 26.
31
specifically denying that he was changing his position on
technology stock and Micron Technology in particular while, in
fact, he had already done so.
Justifiable Reliance
75. Plaintiff and each Class member justifiably relied upon
the Defendants' misrepresentations and omissions in connection with
the purchase of Micron Technology stock.
76. Given the public presence, following, and high regard
commanded by Vinik and FIDELITY/MAGELLAN (especially in the area of
technology stocks, and even more so in regard to a stock such as
Micron Technology, of which the MAGELLAN FUND and FMR CORP. held a
significant percentage), and the Plaintiffs' lack of access to
MAGELLAN or FMR CORP.'s true trading strategies, activities and
motives at the time, the Plaintiff and Class members were justified
in relying upon Defendants' misrepresentations and omissions.
Causation
77. As a proximate result of the Defendants' actions,
Plaintiff and each Class member suffered damages, losses or
injuries to property.
78. Defendants induced Plaintiff and Class members into
purchasing Micron Technology stock by making, disseminating,
publishing, uttering or allowing false and misleading statements
which inflated, sustained or otherwise manipulated the price of
Micron Technology stock during the time when Defendants were
selling same and when Plaintiffs purchased same. Were it not for
the Defendants' statements and failure to disclose their true
32
motives and intentions, the Plaintiff and Class members would not
have purchased Micron stock during the Class period or would have
been able to purchase same at a price which had not been inflated,
sustained or manipulated as a result of the Defendants' statements
and/or omissions.
79. Accordingly, Defendants are liable to Plaintiff and each
Class member under Section 10(b) of the Securities Exchange Act of
1934, 15 U.S.C. ¡ì 78j(b) and Rule 10b-5, 17 C.F.R. ¡ì 240.10b-5.
WHEREFORE, the Plaintiff and Class members demand judgment for
damages against each Defendant, jointly and severally. The
Plaintiff and Class members also request that the Court grant such
other and further relief as it deems appropriate.
COUNT II
VIOLATIONS OF THE FLORIDA SECURITIES AND
INVESTOR PROTECTION ACT (¡ì 517.301, FLORIDA STATUTES)
AND OTHER STATES' STATUTES AGAINST ALL DEFENDANTS
80. Plaintiff realleges paragraphs 1 through 53 and
paragraphs 65 through 78, and incorporates said paragraphs herein
by reference.
81. In connection with the sale of securities to or the
purchase of securities by the Plaintiff and the Class members, the
Defendants violated Fla. Stat. ¡ì 517.301 by directly or indirectly:
(1) employing devices, schemes or artifices to defraud;
(2) making untrue statements of material facts and
omitting to state material facts necessary in order to make the
statements made, in the light of the circumstances under which they
were made, not misleading; and
33
(3) engaging in acts, practices and courses of business
which operated as frauds upon the Plaintiff and Class members in
connection with the sale of the above-described securities, all as
alleged in paragraphs 9 through 53 and paragraphs 65 through 78 of
this Complaint.
82. In addition, Defendants violated the equivalent anti-
fraud provisions of the securities laws of each and every state
where shares of Micron Technology, Inc. common stock were sold
during the Class period and at the artificially high prices which
resulted from the Defendants' material omissions and misstatements
as alleged in paragraphs 9 through 53 of this Complaint.15
83. Accordingly, Plaintiff and each Class member is entitled
to recover damages from those Defendants pursuant to Section
____________________
15 The securities fraud statutes of every other state in
which the Defendants did business are similar if not identical to
Florida's. See Ala. Code ¡ì 8-6-16(a); Alaska Stat. ¡ì 45.55.010;
Ariz. Rev. Stat. Ann. ¡ì 44-1991; Ark. Stat. Ann. ¡ì 23-42-507; Cal.
Corp. Code ¡ì 25400(d); Colo. Rev. Stat. Ann. ¡ì 11-51-501(1); Conn.
Gen. Stat. Ann. ¡ì 36b-4; Del. Code Ann. tit. 6, ¡ì 7303; D.C. Code
Ann. ¡ì 2-2602; Ga. Code Ann. ¡ì 10-5-12; Haw. Rev. Stat. ¡ì 485-
25(a); Idaho Code ¡ì 30-1403; Ill. Rev. Stat. ch. 815, para. 5/12;
Ind. Code. ¡ì 23-2-1-12; Iowa Code Ann. 502.401; Kansas Stat. Ann.
¡ì 17-1253(a); Ky. Rev. Stat. Ann. ¡ì 292.320; La. Rev. Stat. Ann.
¡ì 51:712; Me. Rev. Stat. Ann. tit. 32, ¡ì 10201; Md. Corps. & Ass'ns
Code Ann. ¡ì 11-301; Mass. Gen. Laws Ann. ch. 110A, ¡ì 101; Mich.
Comp. Laws Ann. ¡ì 451.501; Minn. Stat. Ann. ¡ì 80A.01; Miss. Code
Ann. ¡ì 75-71-501; Mo. Rev. Stat. 409.101; Mont. Code Ann. ¡ì 30-10-
301(1); Neb. Rev. Stat. ¡ì 8-1102; Nev. Rev. Stat. Ann. ¡ì 90.570;
N.H. Rev. Stat. Ann. 421-B:3; N.J. Stat. Ann. ¡ì 49:3-52; N.M. Stat.
Ann. ¡ì 58-13B-30; N.Y. Gen. Bus. Law ¡ì 352-c; N.C. Gen. Stat.
¡ì 78A-8; N.D. Cent. Code ¡ì 10-04-15; Ohio Rev. Code Ann.
¡ì 1707.44(B); Okla. Stat. tit. 71, ¡ì 101; Or. Rev. Stat. ¡ì 59.135;
70 Pa. Cons. Stat. Ann. ¡ì 1-401; R.I. Gen. Laws ¡ì 7-11-501; S.C.
Code Ann. ¡ì 35-1-1210; S.D. Codified Laws Ann. ¡ì 47-31A-101(a);
Tenn. Code Ann. ¡ì 48-2-121(a); Tex. Rev. Civ. Stat. Ann. ¡ì art.
581-33; Utah Code Ann. ¡ì 61-1-1; Vt. Stat. Ann. tit. 9, ¡ì 4224a(a);
Va. Code Ann. ¡ì 13.1-502; Wash. Rev. Code Ann. ¡ì 21.20.010; W. Va.
Code ¡ì 32-1-101; Wis. Stat. Ann. ¡ì 551.41; Wyo. Stat. ¡ì 17-4-101.
34
517.211 of the Florida Statutes or the relevant state statute.
Such damages include rescission, plus interest, for each Class
member who still holds any securities purchased; damages, plus
interest, for Plaintiff and each Class member who has sold the
securities; plus, a reasonable attorneys' fee and the costs of this
action.
WHEREFORE, the Plaintiff and Class members demand judgment for
damages against each Defendant, jointly and severally, pursuant to
Section 517.211 of the Florida Statutes or the relevant provision
of each applicable state statute, plus a reasonable attorneys' fee
and the costs of this action. The Plaintiff and Class members also
request that the Court grant such other and further relief as it
deems appropriate.
COUNT III
VIOLATION OF ¡ì 20 OF THE SECURITIES EXCHANGE ACT
OF 1934 AND RULE 10b-5 PROMULGATED THEREUNDER:
CONTROLLING PERSON LIABILITY AGAINST FMR COMPANY
84. Plaintiff realleges paragraphs 1 through 53, and
paragraphs 65 through 78, and incorporates said paragraphs herein
by reference.
85. Defendant, FMR COMPANY, manages the MAGELLAN FUND,
including the choosing of the FUND's investments, the handling of
its business affairs and the controlling of the FUND's operations.
86. Defendant, FMR COMPANY, at all material times mentioned
herein, was a "controlling person" of the FIDELITY MAGELLAN FUND
within the meaning of Section 20 of the 1934 Act and, therefore, is
35
liable as a controlling person under Section 20 for the MAGELLAN
FUND's Section 10(b) violations.
87. Defendant, FMR COMPANY, participated in, induced or
allowed the Defendant, FIDELITY MAGELLAN FUND, and its portfolio
manager, Jeffrey Vinik, to engage in the above-described fraudulent
scheme carried out through the material misrepresentations and
omissions as outlined in paragraphs 1 through 53 and paragraphs 65
through 78 of this Complaint.
WHEREFORE, the Plaintiff and Class members demand judgment for
damages against the Defendants pursuant to Sections 10(b) and 20 of
the Securities Exchange Act of 1934 and Rule 10b.5. Plaintiff and
Class members also request that the Court grant other and further
relief as it deems appropriate.
COUNT IV
VIOLATION OF ¡ì 20 OF THE SECURITIES EXCHANGE ACT
OF 1934 AND RULE 10b-5 PROMULGATED THEREUNDER:
CONTROLLING PERSON LIABILITY AGAINST FMR CORPORATION
88. Plaintiff realleges paragraphs 1 through 53, and
paragraphs 65 through 78, and incorporates said paragraphs herein
by reference.
89. Defendant, FMR COMPANY, manages the MAGELLAN FUND,
including the choosing of the FUND's investments, the handling of
its business affairs and the controlling of its operations.
90. Defendant, FMR CORPORATION, is the parent and controlling
corporation of FMR COMPANY and, as such, was vested with control
over FMR COMPANY, and, ultimately, the FIDELITY MAGELLAN FUND.
36
91. Defendant, FMR CORPORATION, at all material times
mentioned herein, was a "controlling person" of FMR COMPANY and, in
turn, the FIDELITY MAGELLAN FUND within the meaning of Section 20
of the 1934 Act and, therefore, is liable as a controlling person
under Section 20 for FMR COMPANY and MAGELLAN's Section 10(b)
violations.
92. Defendant, FMR CORPORATION, participated in, induced or
allowed the Defendants, FIDELITY MAGELLAN FUND and FMR COMPANY, and
the FUND's portfolio manager, Jeffrey Vinik, to engage in the
above-described fraudulent scheme carried out through the material
misrepresentations and omissions as outlined in paragraphs 9
through 53 and paragraphs 65 through 78 of this Complaint.
WHEREFORE, the Plaintiff and Class members demand judgment for
damages against the Defendants pursuant to Sections 10(b) and 20 of
the Securities Exchange Act of 1934 and Rule 10b-5. The Plaintiff
and Class members also request that the Court grant such other and
further relief as it deems appropriate.
COUNT V
NEGLIGENT MISREPRESENTATION - ALL DEFENDANTS
93. Plaintiff realleges paragraphs 1 through 53, and
paragraphs 65 through 78, and incorporates said paragraphs herein
by reference.
94. The Defendants had a duty to use due care in the conduct
of their business operations and had a duty to avoid
misrepresentations and omissions.
37
95. Defendants made, participated in the making of or allowed
to be made misrepresentations or material omissions of fact to
Plaintiff and other members of the Class as set forth in paragraphs
9 through 53 and 65 through 78 of this Complaint.
96. The above-described material misrepresentations and
omissions were the result of negligence and carelessness on the
part of the Defendants.
97. At the time of making or allowing the aforementioned
statements or omissions, it was reasonably foreseeable to
Defendants that the Plaintiff and the Class members would rely upon
the material misrepresentations or omissions in purchasing shares
of Micron Technology stock.
98. In addition, it was reasonably foreseeable that the
Defendants' negligence would result in damages to the Plaintiff and
members of the Class.
99. Plaintiff and other members of the Class relied upon such
material misrepresentations and omissions and, in ignorance of the
true facts, were induced to, and did, purchase Micron Technology
Common stock. Had Plaintiff and other members of the Class known
the true facts, they would not have purchased Micron Technology
stock or would not have purchased it at the artificially inflated
or sustained price, and have therefore sustained damages due to the
Defendants' actions.
WHEREFORE, the Plaintiff and Class members demand judgment for
damages against each Defendant, jointly and severally. Plaintiff
38
and Class members also request that the Court grant such other and
further relief as it deems appropriate.
PLAINTIFF'S CERTIFICATION
100. Plaintiff has executed a certification meeting the
requirements of Sections 21D(a)(2) of the Securities Exchange Act
of 1934, as amended by the Private Securities Litigation Reform Act
of 1995, Pub. L. No. 104-67. A copy of the executed certification
has been filed with the Court simultaneously with this Complaint.
DEMAND FOR JURY TRIAL
Plaintiff and Class members demand a trial by jury on all
issues so triable.
DEMAND FOR ATTORNEYS' FEES
Plaintiff and Class members hereby demand that attorneys' fees
be awarded to Class counsel if, as and when a fund is created, in
accordance with the law and rules governing class actions under
Rule 23 of the Federal Rules of Civil Procedure and the relevant
statutory provisions cited in Count II herein.
ALPERT, BARKER & CALCUTT, P.A.
By: /s/
_______________________________
JONATHAN L. ALPERT, ESQUIRE
Florida Bar No. 121970
CHRIS A. BARKER, ESQUIRE
Florida Bar No. 885568
DAVID D. FERRENTINO, ESQUIRE
Florida Bar No. 908754
Post Office Box 3270
Tampa, Florida 33601-3270
(813) 223-4131 (TEL)
(813) 228-9612 (FAX)
Attorneys for Plaintiff
WILDLIFE-IN-NEED, INC.
39
3 Aug 1997