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News March 21, 2005 Issue

Update on Class Action Litigation

Nearly half of the 44 mutual fund class action cases filed in January have been dismissed by plaintiffs, without court intervention.

"I think a significant number of the other cases are currently in a posture where the defendants are investigating whether, in fact, they owned the securities that were named in the complaint and whether claims were made," said Dechert partner William "Ned" Dodds, whose firm represents several defendants. "That can take a little bit of doing, but I think they are doing that with a view towards getting similar dismissals, or potentially narrowing the case."

Dodds said that to date, he was not aware of anyone settling.

"The way the cases were initially filed was surprising and unfortunate," Dodds added, noting that information on the funds’ relevant portfolio holdings was publicly available to the plaintiffs had they checked the SEC’s EDGAR system. "That," he said, "wasn’t done." However, Dodds noted that since the cases were filed, plaintiffs’ counsel has "been willing to listen."