Fidelity Management & Research Company Case 06/02/2008
JANUARY 2012 - According to the Notice:
IF YOU PURCHASED OR OTHERWISE ACQUIRED FIDELITY ULTRA-SHORT BOND FUND SHARES BETWEEN JUNE 6, 2005 AND JUNE 5, 2008, INCLUSIVE, YOUR RIGHTS MAY BE AFFECTED BY THIS CLASS ACTION AND YOU MAY BE ENTITLED TO A PAYMENT FROM THIS PROPOSED CLASS ACTION SETTLEMENT.
This Notice was authorized and approved by the Court. This is not a solicitation from a lawyer.
• The Settlement described herein will provide a gross settlement fund of Seven Million Five Hundred Thousand Dollars ($7,500,000), plus interest (the “Gross Settlement Fund”), for the benefit of investors who purchased or otherwise acquired Fidelity Ultra-Short Bond Fund shares between June 6, 2005 and
June 5, 2008, inclusive (the “Class Period”).
• The Settlement resolves the Litigation before the United States District Court for the District of Massachusetts (the “Court”) against the Defendants alleging, among other things, false and misleading public statements concerning the investment profile, objective, holdings, and value of the Fidelity Ultra-Short Bond Fund (the “Fund”).
• The Settlement also includes full and final releases of known and unknown claims that are or could have been asserted in the Litigation against the Defendants and others described herein (the “Released Parties,” as defined more specifically below).
• In order to become effective, the Settlement must be approved by the Court.
• Solely for the purpose of implementing the Settlement, the Court has granted preliminary approval of the Settlement, certified a class (the “Class”), and approved the form and method of disseminating this Notice to members of the Class. The Court will conduct a fairness hearing to consider whether to finally approve the Settlement on May 11, 2012. The Class is described below.
• If the Settlement is not approved by the Court and does not become effective for that reason or as otherwise provided under the Settlement, the certification of the Class by the Court will be set aside.
According to a press release dated June 5, 2008, a class action has been commenced on behalf of purchasers of the Fidelity Ultra-Short Bond Fund who purchased the Fund within three years of the filing of this lawsuit, seeking to pursue remedies under the Securities Act of 1933.
Specifically, the complaint charges Fidelity Management & Research Company (”FMR Co.”) and certain related entities, among others, with violations of the Securities Act. FMR Co. is the investment advisor to the entire group of mutual funds under the Fidelity name.
The complaint alleges that on or about August 23, 2002, defendants began offering shares of the Ultra-Short Bond Fund pursuant to an initial registration statement, filed with the SEC as a Form 485BPOS (the “Registration Statement”). The complaint alleges that defendants solicited investors to purchase shares of the Ultra-Short Bond Fund by making statements that described the Fund as a fund that: (i) “Seeks a high level of current income consistent with the preservation of capital”; (ii) “allocates its assets across different market sectors and maturities”; (iii) has a “similar overall interest rate risk to the Lehman Brothers® 6 Month Swap Index”; and (iv) is geared toward the “preservation of capital.” As alleged in the complaint, these statements were materially false and misleading because defendants did not adequately disclose the risks associated with investing in the Fund, including, for example, that the Fund was: (i) failing to compete with the Lehman Brothers® 6 Month Swap Index; and (ii) so heavily invested in high-risk mortgage-backed securities.
By June 11, 2007, defendants slowly began lowering the value of the share price for the Ultra-Short Bond Fund. Since then, the value of the Ultra-Short Bond Fund’s share price has been precipitously lowered. By November 15, 2007, the value of the per-share price was reduced below $9. The shares were trading as low as $8.25 as of the filing of the complaint.