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Case Status:    DISMISSED    
On or around 10/20/2011 (Stipulation and order of dismissal (voluntary dismissal))

Filing Date: May 28, 2004

The original Complaint alleges that defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933; Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder; Sections 34(b), 36(b) and 48(a) of the Investment Company Act of 1940; Section 206 of the Investment Advisers Act of 1940; and the common law. The Complaint charges that defendants engaged in an unlawful and deceitful course of conduct designed to improperly financially advantage defendants to the detriment of plaintiff and the other members of the Class. The complaint alleges that defendants, in clear contravention of their disclosure obligations and fiduciary responsibilities, failed to properly disclose that SSB had been aggressively pushing its sales personnel to sell Smith Barney and Salomon Brothers funds by creating various undisclosed incentives for brokers to sell the proprietary funds. In addition, according to the complaint, unbeknownst to investors, the investment advisers to the Funds (Citigroup Asset Management, SSB, Salomon Brothers Asset Management, Inc. and Smith Barney Fund Management LLC) paid excessive commissions, directly or indirectly, to SSB, the broker dealer, which came directly out of the Funds' assets, as payments to SSB for its steering clients towards the proprietary funds. The investment advisers profited from this scheme by earning increased management fees, while Citigroup Global Markets benefited from increased commissions and Citigroup profited as the ultimate parent of Citigroup Global Markets and the investment advisers. The clear losers were plaintiff and the other members of the Class, whose assets were diverted to line defendants' pockets without any benefit to them whatsoever.

The Funds, and the symbols for the respective Funds named below, are as follows:

Salomon Brothers All Cap Value Fund (Sym: SUBAX, SUBBX, SUBZX)
Salomon Brothers Balanced Fund (Sym: STRAX, STRBX, STRCX)
Salomon Brothers California Tax Free Bond Fund (Sym: CCAIX, SCUBX, SCULX)
Salomon Brothers Capital Fund (Sym: SCCAX, SPABX, SACPX, SCCCX)
Salomon Brothers High Yield Bond (Sym: SAHYX, SBHYX, SHYOX, SHYCX)
Salomon Brothers International Equity Fund (Sym: SAIEX, SAIBX, SAICX)
Salomon Brothers Investors Value Fund (Sym: SINAX, SBINX, SAIFX, SINOX)
Salomon Brothers Large Cap Growth Fund (Sym: SLCAX, SALBX, SALCX)
Salomon Brothers Mid Cap Fund (Sym: SMDAX, SMDBX, SMDZX)
Salomon Brothers National Tax Free Bond Fund (Sym: CFNIX, SNABX, SNALX)
Salomon Brothers New York Tax Free Bond Fund (Sym: CFTNX, SNFBX, SNFLX)
Salomon Brothers SB Adjustable Rate Income Fund (Sym: SJRAX, SJRBX, SJRZX)
Salomon Brothers SB Capital and Income Fund (Sym: SOLAX, SOLBX, SOLZX)
Salomon Brothers SB Convertible Fund (Sym: SVEAX, SVEBX, SCEZX)
Salomon Brothers SB Growth & Income Fund (Sym: SSWAX, SSWBX, SSWZX)
Salomon Brothers Short/Intermediate U.S. Government Fund (Sym: SUSAX, SUSBX, SUSCX)
Salomon Brothers Small Cap Growth (Sym: SASMX, SBSMX, SCSMX)
Salomon Brothers Strategic Bond Fund (Sym: SSTAX, SBSBX, SSTCX)
Smith Barney Aggressive Growth Fund (Sym: SHRAX, SAGBX, SAGCX)
Smith Barney All Cap Growth and Value Fund (Sym: SPAAX, SPBBX, SPBLX)
Smith Barney Appreciation Fund (Sym: SHAPX, SAPBX, SAPCX, SAPYX)
Smith Barney Arizona Municipals Fund (Sym: SLAZX, SAZBX, SAZLX)
Smith Barney Balanced Portfolio (Sym: SBBAX, SCBBX, SCBCX)
Smith Barney California Municipals Fund (Sym: SHRCX, SCABX, SCACX)
Smith Barney Classic Values Fund (Sym: SCLAX, SCLBX, SCLLX)
Smith Barney Conservative Portfolio (Sym: SBCPX, SBCBX, SBCLX)
Smith Barney Diversified Large Cap Growth Fund (Sym: CFLGX, CLCBX, SMDLX)
Smith Barney Diversified Strategic Income Fund (Sym: SDSAX, SLDSX, SDSIX)
Smith Barney Dividend and Income Fund (Sym: SUTAX, SLSUX, SBBLX)
Smith Barney Financial Services Fund (Sym: SBFAX, SBFBX, SFSLX)
Smith Barney Florida Portfolio (Sym: SBFLX, FLABX, SFLLX)
Smith Barney Fundamental Value Fund (Sym: SHFVX, SFVBX, SFVCX)
Smith Barney Georgia Portfolio (Sym: SBGAX, SBRBX, SGALX)
Smith Barney Global All Cap Growth and Value Fund (Sym: SPGAX, SPGGX, SPGLX)
Smith Barney Global Government Bond Portfolio (Sym: SBGLX, SBGBX, SGGLX)
Smith Barney Global Portfolio (Sym: CAGAX, CAGBX, SGPLX)
Smith Barney Government Securities Fund (Sym: SGVAX, HGVSX, SGSLX)
Smith Barney Group Spectrum Fund (Sym: SGSAX, SGSBX, SFTLX)
Smith Barney Growth Portfolio (Sym: SCGRX, SGRBX, SCGCX)
Smith Barney Hansberger Global Value Fund (Sym: SGLAX, SGLBX, SGLCX)
Smith Barney Health Sciences Fund (Sym: SBIAX, SBHBX, SBHLX)
Smith Barney High Growth Portfolio (Sym: SCHAX, SCHBX, SCHCX)
Smith Barney High Income Fund (Sym: SHIAX, SHIBX, SHICX)
Smith Barney Income Portfolio (Sym: SCAAX, SCIAX, SCILX)
Smith Barney Intermediate Maturity CA Municipals Fund (Sym: ITCAX, STDBX, SIMLX)
Smith Barney Intermediate Maturity NY Municipals Fund (Sym: IMNYX, SNMBX, SINLX)
Smith Barney International All Cap Growth Portfolio (Sym: SBIEX, SBIBX, SBICX)
Smith Barney International Large Cap Fund (Sym: CFIPX, SILCX, SILLX)
Smith Barney Investment Grade Bond Fund (Sym: SIGAX, HBDIX, SBILX)
Smith Barney Large Cap Core Fund (Sym: GROAX, GROBX, SCPLX)
Smith Barney Large Cap Growth and Value Fund (Sym: SPSAX, SPSBX, SPSLX)
Smith Barney Large Cap Value Fund (Sym: SBCIX, SBCCX, SBGCX)
Smith Barney Large Capitalization Growth Fund (Sym: SBLGX, SBLBX, SLCCX, SBLYX)
Smith Barney Limited Term Portfolio (Sym: SBLTX, STMBX, SMLLX)
Smith Barney Managed Governments Fund (Sym: SHMGX, MGVBX, SMGLX)
Smith Barney Managed Municipals Fund (Sym: SHMMX, SMMBX, SMMCX)
Smith Barney Massachusetts Municipals Fund (Sym: SLMMX, SMABX, SMALX)
Smith Barney Mid Cap Core Fund (Sym: SBMAX, SBMDX, SBMLX, SMBYX)
Smith Barney Municipal High Income Fund (Sym: STXAX, SXMT, SMHLX)
Smith Barney National Portfolio (Sym: SBBNX, SBNBX, SBNLX)
Smith Barney New Jersey Municipals Fund (Sym: SHNJX, SNJBX, SNJLX)
Smith Barney New York Portfolio (Sym: SBNYX, SMNBX, SBYLX)
Smith Barney Oregon Municipals Fund (Sym: SHORX, SORBX, SORLX)
Smith Barney Pennsylvania Portfolio (Sym: SBPAX, SBPBX, SPALX)
Smith Barney S & P 500 Index Fund (Sym: SBSPX)
Smith Barney SB Adjustable Rate Income Fund (Sym: ARMZX, ARMBX, ARMGX)
Smith Barney SB Capital and Income Fund (Sym: SOPAX, SOPTX, SBPLX)
Smith Barney SB Convertible Fund (Sym: SCRAX, SCVSX, SMCLX, SCVYX)
Smith Barney SB Growth & Income Fund (Sym: GRIAX, GRIBX, SGAIX)
Smith Barney Short Duration Municipal Income Fund (Sym: SHDAX, SHDBX, SHDLX)
Smith Barney Short-Term Investment Grade Bond Fund (Sym: SBSTX, SHBBX, SSTLX)
Smith Barney Small Cap Core Fund (Sym: SBDSX, SBDBX, SBDLX)
Smith Barney Small Cap Growth Fund (Sym: SBSGX, SBYBX, SBSLX)
Smith Barney Small Cap Growth Opportunities Fund (Sym: CFSGX, SMOBX, SGOLX)
Smith Barney Small Cap Value Fund (Sym: SBVAX, SBVBX, SBVLX)
Smith Barney Social Awareness Fund (Sym: SSIAX, SESIX, SESLX)
Smith Barney Technology Fund (Sym: SBTAX, SBTBX, SBQLX)
Smith Barney Total Return Bond Fund (Sym: TRBAX, TRBBX, SBTLX)
Smith Barney U.S. Government Securities Fund (Sym: SBCGX, SBUBX, SBULX)

The defendants named in the complaint are: Salomon Brothers Asset Management, Inc., Smith Barney Fund Management LLC, Citigroup Asset Management, Citigroup Global Markets, Inc. (f/k/a Salomon Smith Barney Inc.) ('SSB'), Citigroup Global Markets Holdings Inc., Citigroup, Inc. and certain individuals.

On August 13, 2004, Judge Naomi Reice Buchwald granted the motion to consolidate several actions and appointed W. Grand Lodge of F. & A. Masons of Pennsylvania as lead plaintiff and approved law firm of Grant & Eisenhofer P.A. as lead counsel. On December 16, 2004, the lead plaintiff filed a Consolidated Amended Class Action Complaint, and the defendants responded by filing a motion to dismiss the Consolidated Amended Complaint on May 27, 2005. Before any ruling, the lead plaintiff filed another Consolidated Amended Complaint on June 1, 2005.

According to a press release dated August 14, 2006, after hearing more than three hours of oral arguments, Southern District of New York Judge Paul A. Crotty, In re Salomon Smith Barney Mutual Fund Fees Litigation, 04-civ-4055, held that the plaintiffs could not proceed in their assertion of wrongdoing. Crotty dismissed all of plaintiffs' claims with prejudice, except for their argument under one section of the Investment Company Act, granting them a "limited" right to replead that claim. He held that investors had standing to sue on behalf of only those funds whose shares they owned. As a result, the court dismissed all claims relating to the funds in which plaintiffs owned no shares. He ruled that the plaintiffs' claims for primary violations of the Securities and Exchange Acts could not proceed because the plaintiffs had failed to plead loss causation. "Plaintiffs have not only not alleged why they lost money on their purchase of mutual fund stock, they have not alleged even that they in fact lost money on their purchase of the mutual fund stock," Crotty said. "Because plaintiffs failed to please loss causation, the federal securities claims ... must be dismissed." The judge also dismissed plaintiffs' direct claim under ยง36(b) of the Investment Company Act, saying claims under that section must be brought derivatively on behalf of the funds rather than directly by fund shareholders.

On October 16, 2006, the plaintiffs filed a Second Consolidated Amended Complaint. The named defendants moved for an order dismissing the Second Consolidated Amended Complaint on March 30, 2007. On December 3, 2007, Judge Paul A. Crotty issued the Decision and Order granting the Defendants' motion to dismiss with prejudice. Judgment was entered and the case was closed. On November 2, 2008, the plaintiffs filed a Notice of Appeal from the order and judgment dismissing the case. The appeal was pending in the Second Circuit Court of Appeals.

On July 8, 2011, the court entered the certified copy of the Mandate of the U.S. Court of Appeals, affirming in part, vacating in part, and remanding the case back to the Court for further proceedings.

According to the Stipulation of Voluntary Dismissal dated October 20, 2011, it is hereby stipulated and agreed by and between the parties and/or their respective counsel(s) that the above-captioned action is voluntarily dismissed with prejudice against the defendant(s).


Sector: Financial
Industry: Money Center Banks
Headquarters: United States


Ticker Symbol: SUBAX
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data

"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 04-CV-4055
JUDGE: Hon. Naomi Reice Buchwald
DATE FILED: 05/28/2004
CLASS PERIOD END: 03/22/2004
  1. Law Offices of Charles J. Piven, P.A.
  2. Milberg Weiss Bershad & Schulman LLP (New York)
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 04-CV-4055
JUDGE: Hon. Naomi Reice Buchwald
DATE FILED: 10/16/2006
CLASS PERIOD END: 03/22/2004
  1. Grant & Eisenhofer (New York)
  2. Milberg Weiss Bershad & Schulman LLP (New York)
No Document Title Filing Date
No Document Title Filing Date