The class action lawsuit was filed on behalf of all purchasers of Morgan Stanley Information Fund shares, of all four share classes (Symbols: IFOAX through IFODX) for violations of Sections 11, 12 and 15 of the Securities Act of 1933 and the Investment Company Act of 1940. This action arises as a result of the issuance by the defendants of shares in the Fund, and concerns material misstatements and omissions by defendants in the Prospectus and other incorporated documents, relating to defendants' conflicts of interest, which include but are not limited to the following: (1) defendants failed to disclose and omitted material information that Morgan Stanley had had investment banking relationships with, including having brought public, certain of the companies whose securities were part of the Fund's portfolio. Defendants disclosed neither this general fact nor the identities of the particular companies with which it had investment banking relationships; (2) defendants failed to disclose and omitted material information concerning that Morgan Stanley was continuing to seek investment banking relationships with many of the companies whose securities were part of the Fund's portfolio; and (3) defendants failed to disclose and omitted material information concerning that a material part of the total compensation paid to Morgan Stanley research analysts was based upon obtaining investment banking business for Morgan Stanley and not upon the accuracy of their research about a given company. Hence, Morgan Stanley and its affiliated companies including the Fund recommended investments in and/or invested in companies in order to enhance Morgan Stanley's opportunity to obtain investment banking business from those companies (without regard to whether they were good investments for the investors including plaintiffs and the Class).
On April 14, 2003, the Court entered the Order signed by U.S. District Judge Barbara S. Jones granting the motion for an order consolidating cases 02civ8579 as Lead Case, and 02civ8747 and 02civ9648 as Member Cases. Further, the Court granted the motion to appoint Michael J. McDermott, Stephen B. Dornak, Dietmar H. Kubb, Lisette Vaessen, Emil H. Vaessen and James M. Lindsay to serve as lead plaintiffs, and also granted the motion to approve the law firms of Wolf Haldenstein Adler Freeman & Herz, LLP and Schatz & Nobel, P.C. as Co-Lead Counsel. On June 20, 2003, an Amended Complaint was filed. On February 23, 2004, the Court entered the Order directing the Clerk of the Court to list this case as related to In Re Morgan Stanley Technology Fund Securities Litigation, 02-CV-6153.
On March 6, 2007, the plaintiffs filed a Second Consolidated Amended Complaint. On May 4, 2007, the defendants responded by filing a motion for an order to dismiss with prejudice all claims against the defendants in all counts of the Second Consolidated Amended Complaint. On February 3, 2009, Judge Barbara S. Jones signed the Opinion and Order granting the defendants’ motion to dismiss the complaint. Judgment was entered the next day. On February 27, 2009, the plaintiffs filed a notice of appeal.
On February 22, 2010, the Court entered the certified copy of the Mandate from the U.S. Court of Appeals for the Second Circuit. According to the Mandate, the judgment of the District Court is affirmed.