You had to see this one coming. Today Coughlin Stoia Geller Rudman & Robbins LLP, a law firm, announced that a class action has been submitted in New York on behalf of people or entities that bought and held shares of certain funds offered by the Reserve Short-Term Investment Trust, including RYPQX.  You can be included in the class action suit if you held shares between July 27, 2007 and September 16, 2008.

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. -Source

Essentially, the argument is that representatives sold investors on the funds, and implied that the fund was secure, much like a money market fund.

Luckily, I was able to unload all my RYPQX holdings a few weeks before the fund was frozen in light of the Bear Stearns collapse.

I’m not sure I’ll participate in the class action suit.  Over the course of about 12 months, I held about 1000 units of RYPQX at any one time as a place to hold funds while waiting for opportunities.

Is it really worth my time to participate in a class action when I really didn’t have much skin in the game?  Probably not.

But if you do, go to the Coughlin Stoia website, or see the case information.

There is also a Yahoo! group dedicated to those who lost money RYPQX as a result of the fund “breaking the buck”.

There is also a discussion in the comments section of this post.

What a mess.

Tags: class action | RYPQX

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