According to a press release dated August 25, 2009, the complaint charges DWS RREEF I and DWS RREEF II and certain of its officers and directors with violations of the Securities Exchange Act of 1934. DWS RREEF I and DWS RREEF II are closed-end, non-diversified, management investment companies.
The complaint alleges that during the Class Period, the Funds issued reports that misrepresented the Funds’ investments, leverage and exposure to the auction rate preferred securities (“ARPS”) market. Due to defendants’ false and misleading statements, investors purchased the common stock of the Funds during the Class Period at artificially inflated prices and were damaged thereby.
Subsequently, as a result of disclosures which caused investors to realize that distributions would cease, the Funds’ prices dropped. The price per share of DWS RREEF I dropped from $3.45 per share on November 14, 2008 to $2.65 on November 18, 2008, and the price per share of DWS RREEF II dropped from $1.90 per share on November 14, 2008 to $1.42 per share on November 18, 2008.
The Funds have never recovered and DWS RREEF I trades at less than $2 per share and DWS RREEF II trades at less than $0.60 per share.
On December 3, 2009, Judge John G. Koeltl granted the motion to appoint Pasquale A. La Pietra and Barry King as Lead Plaintiffs and approved their selection of the law firms of Horwitz, Horwitz & Paradis and Coughlin Stoia Geller Rudman & Robbins LLP as Co-Lead Counsel. On December 23, 2009, an Amended Complaint was filed. On February 8, 2010, the defendants filed a motion to dismiss the Amended Complaint. According to the Opinion and Order dated September 16, 2010, the defendants' motion to dismiss the amended complaint is granted. Judgment was entered on September 21, 2010, and the case was closed.