Security Brokerage, Inc. ("SBI" or the Company) is an investment bank and a securities broker-dealer.

On December 23, 2003, the SEC announced that it had filed civil fraud charges against SBI and Calugar for their participation in the late trading and timing scheme and alleged that Calugar, trading through SBI, had reaped profits of approximately $175 million from improper late trading and market timing.

The Complaint describes that late trades are trades received after 4:00 p.m. EST that are filled based on that day’s net asset value, as opposed to being filled based on the next day’s net asset value, which is the proper procedure under SEC regulations. Late trading allows investors to make use of market-moving information that only becomes available after 4 P.M and has been compared to betting on a horse race that already has been run. Timing is excessive arbitrage trading undertaken to turn a quick profit and which ordinary investors are told that the funds police. Late trading and timing injure ordinary mutual fund investors -- who are not allowed to engage in such practices -- and are acknowledged as improper practices by the Funds.

According to a press release dated January 5, 2004, 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 SBI and Calugar to obtain millions of dollars in illicit profits through the improper market timing and late trading of AllianceBernstein and MFS mutual funds.

On May 24, 2004, this case was transferred to the U.S. District Court for the District of Maryland for coordinated or consolidated pretrial proceedings in MDL 1586.

On September 30, 2004, a Consolidated Amended Complaint was filed.

On January 15, 2010, the Class Plaintiffs entered into a Stipulation of Settlement with the Security Brokerage parties. The Court granted Final Judgment approving the Settlement on October 25, 2010.