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Security Trust Company and Capital Management Investors Holdings, Inc. : Various Mutual Funds Summary: According to the latest docket dated December 12, 2007, discovery has been proceeding in the multi-district mutual funds litigation. Simultaneously, some of the defendants have been involved in settlement discussions with the plaintiffs. This settlement process has been impacted by parallel regulatory proceedings occurring at the Securities and Exchange Commission (“SEC”). Nevertheless, the court has been advised that several settlements have been agreed upon in principle. Additionally, numerous individuals and firms have been voluntarily dismissed by plaintiffs throughout 2005 and 2006. On June 11, 2007, the over-seeing judges issued a scheduling order calling for completion of discovery by March 28, 2008.
Additionally, oral arguments concerning numerous pending motions for dismissal were held on October 5, 2007. Those motions were ordered denied on October 19, 2007.
Numerous motions to dismiss various complaints were filed on February 25 and March 7, 2005.
In March 2004, by the Order from the Judicial Panel on Multidistrict Litigation, the case was transferred from the U.S. District Court for the Central District of California to the U.S. District Court for the District of Maryland. The case is now being handled under In re: Mutual Funds Litigation, case number 04-md-15862.
According to a press release dated December 22, 2003, the Complaint alleges that defendants 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, by perpetrating a wide-ranging securities fraud that, unbeknownst to mutual fund investors, enabled them to obtain millions of dollars in illicit profits by facilitating the improper market timing and late trading of at least 397 mutual funds on behalf of a group of related hedge funds. The improper trading was effected by defendants through Security Trust Company's electronic trading platform which was designed primarily for processing trades by third party administrators for retirement plans but was improperly used by Security Trust Company to secretly facilitate timed trades and late trades on behalf of hedge funds.
The complaint further alleges that although Security Trust Company attempted to conceal market timing and late trading from the Mutual Funds in some instances, in others, it conspired with certain of the Mutual Funds who sought to facilitate late trading and timed trading by its favored customers, including certain of the Hedge Funds.
On November 25, 2003 the SEC announced that it had brought civil charges against the Security Trust Company Defendants based on the allegations set forth above; the New York State Attorney General announced that it had charged the Security Trust Company Individual 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 Company to dissolve itself by March 31, 2004.
The mutual funds that are the subject of this lawsuit include but are not limited to the following:
American Funds EuroPacific Fund AEPGX Artisan International Fund ARTIX AXP International Y Fund IDIYX (American Express Family of Funds) Janus Worldwide Fund JAWWX Legg Mason Value Trust Fund LMVTX MFS Emerging Growth Fund MFEGX SEI Emerging Markets I Fund SIEMX SEI International Equity A Fund SEITX
INDUSTRY CLASSIFICATION:
SIC Code: 7200
Sector: Financial
Industry: Investment Services
| COMPANY/ISSUER NAME: | Security Trust Company and Capital Management Investors Holdings, Inc. |
| COMPANY/ISSUER TICKER: | PRIVATE |
| COMPANY WEBSITE: | http://www.securitytrustco.com |
| FIRST IDENTIFIED COMPLAINT IN THE DATABASE | |||||||||||||||||
| Tether III, et al. v. Security Trust Company, et al. | |||||||||||||||||
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| DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT | |||
| Class Action Complaint | |||
| Type: Complaint | Date on the document: 12/19/2003 | ||
| REFERENCE COMPLAINT | |||||||||||||||||
| In Re: Security Trust Company and Capital Management Investors Holdings, Inc. : Various Mutual Funds Securities Litigation | |||||||||||||||||
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| DOCUMENTS FOR THE REFERENCE COMPLAINT | |||
| U.S. District Court Civil Docket | |||
| Type: Docket | Date on the document: 12/12/2007 | ||
| OTHER DOCUMENTS | |||
| Class Action Complaint | |||
| Case Name and/or Number: Blum | |||
| Type: Complaint | Date on the document: 01/07/2004 | ||
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