The Law firm of Miller & Milove announced that a class action has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers or entities who purchased or held the shares of certain mutual funds offered by the Reserve Short-Term Investment Trust, including the Reserve Yield Plus Fund
San Diego, California (PRWEB) November 28, 2008 -- The Law firm of Miller & Milove (http://www.cmofraud.com) today announced that a class action has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers or entities who purchased or held the shares of certain mutual funds offered by the Reserve Short-Term Investment Trust, including the Reserve Yield Plus Fund ("Reserve Yield Plus Fund" or the "Fund"); during the period from July 27, 2007 to September 16, 2008 (the "Class Period"), including purchasers and holders of the Reserve Yield Plus Fund in connection with the July 27, 2007 offering.
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Bradd Milove of Miller & Milove via e-mail at Milove@millerandmilove.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.cmofraud.com or http://www.millerandmilove.com/Reserve-Yield-Plus-Fund.pdf
Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges the Reserve Short-Term Investment Trust, its parent and affiliates, certain of its officers and trustees and TD Ameritrade Holding Corp. with violations of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940. The Reserve Short-Term Investment Trust is an open-end, diversified management investment company.
On July 27, 2007, the Reserve Short-Term Trust filed with the SEC a Registration Statement on Form N-1A, a Prospectus and Statement of Additional Information (collectively the "Prospectus"). The Prospectus emphasized the Fund's focus was to "seek as high a level of current income as is consistent with the preservation of capital and liquidity" and a "stable $1.00 share price." The Fund later issued reports characterizing the Fund as being an "enhanced cash fund" and emphasizing the Fund's focus on "safety of principal, liquidity and soundness of sleep."
The complaint alleges that many of the Fund's purchasers were sold their interests in the Fund by TD Ameritrade and its employees who consistently represented to investors that the Fund was just like a money market fund. Due to defendants' positive, but false, statements, investors purchased and/or continued to hold shares in the Fund.
On September 16, 2008, The Reserve Fund, an entity related to the Reserve Short-Term Trust, issued a release concerning the Primary Fund, one of its money market funds, stating that the value of the debt securities issued by Lehman Brothers Holdings, Inc. (face value $785 million) and held by the Primary Fund had been valued at zero and, as a result, the net asset value ("NAV") of the Primary Fund was $0.97 per share. This was major news, as this was only the second time in history that a money market fund had "broken the buck" - that is, reported a share's value was less than a dollar. In addition, on September 16, 2008, the NAV of the Reserve Yield Plus Fund also collapsed from $1.00 per share to close at $0.97 due to its investment in debt securities issued by Lehman. Thereafter, the Reserve Short-Term Trust suspended providing a daily NAV on the Reserve Yield Plus Fund.
According to the complaint, the true facts, which were omitted from the Prospectus and other statements made by defendants during the Class Period, were as follows: (a) the Fund was no longer adhering to the stated objectives of preserving capital, but in an effort to achieve greater yields was pursuing riskier instruments; (b) despite the fact that many observers believed Lehman would be the next Wall Street failure after Bear Stearns collapsed in March 2008, the Fund purchased a large amount of Lehman commercial paper in April 2008; (c) the Fund was not designed to protect the $1.00 NAV, as were traditional money market funds, and was thus significantly riskier than money market funds; (d) the Fund's internal controls were inadequate to prevent defendants from taking on excessive risk; and (e) the Fund failed to disclose the extent of its relationship with TD Ameritrade.
Plaintiff seeks to recover damages on behalf of all purchasers or holders of certain mutual funds offered by the Reserve Short-Term Investment Trust during the Class Period (the "Class"). The plaintiff is represented by Miller & Milove, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
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