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'Epic Failure': After Six Years of Litigation, 'Phantom' Lead Plaintiff Dismissed From Case

Bruce Carton | September 23, 2011

Six years ago, lawyers commenced a securities class action in the SDNY on behalf of all purchasers of shares of Smith Barney Capital Preservation Fund between September 11, 2000 and May 31, 2005. By virtue of allegedly having purchased over 75,000 shares of this security during the class period, a union pension fund named Operating Local 649 Annuity Trust Fund was selected by the court to be lead plaintiff.

The case was litigated vigorously. As summarized by the court in an order yesterday, the last six years have been filled with extensive motion practice, an appeal to the Second Circuit, a remand back to the trial court, more motion practice, and discovery. Yesterday, however, a very frustrated U.S. District Judge William H. Pauley III dismissed Local 649 from the case after lead counsel for the plaintiffs advised the court that the lead plaintiff never actually purchased any of the securities...

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