Brower Piven has commenced a class action lawsuit in the US District Court for the Central District of California on behalf of all persons or entities who purchased or otherwise acquired the common shares of certain mutual funds offered by Allianz Global Investors Fund Management.
The law firm commenced a class action lawsuit on certain mutual funds offered by Allianz Global Investors Fund Management, including the common shares of the PIMCO California Municipal Income Fund II (PCK), PIMCO Municipal Income Fund II (PML), PIMCO Municipal Income Fund III (PMX), PIMCO New York Municipal Income Fund III (PYN) and PIMCO California Municipal Income Fund III (PZC) (collectively, the funds) between May 22, 2007 and December 1, 2008 for the PCK and PML funds, inclusive (the PIMCO II class period) and between June 6, 2007 and December 1, 2008 for the PMX, PYN and PZC funds, inclusive (the PIMCO III class period).
The complaint accuses the defendants of violations of the Securities Exchange Act of 1934 on behalf of those who purchased PCK and/or PML during the PIMCO II class period and for those who purchased PMX, PYN, and/or PZC during the PIMCO III class period by virtue of the company’s failure to disclose during the two class periods that the funds lacked effective controls and hedges to minimise the risk of loss and risk of liquidity from a large exposure to auction rate securities (ARS).
The complaint also accuses that the funds lacked effective internal controls to ensure that the funds would remain in compliance with restrictions and limitations related to their investment portfolios and strategies; the extent of the funds’ liquidity risk and loss exposure from the illiquid nature of a large portion of the funds’ portfolios, including ARS, was omitted or misstated. According to the complaint, as the full extent of the funds’ liquidity risk and loss exposure from high risk instruments became known, the value of the funds’ shares declined significantly.
