Judge OKs investor settlements with Putnam, Janus, other funds
BALTIMORE – Class action lawyer Stephen Tillery of St. Louis probably won't admit it, but class action litigation against mutual funds has ended.
In May, U.S. Multi District Judge Frederick Motz of Baltimore granted preliminary approval to investor settlements with Putnam, Janus, and other funds.
Investors started suing in 2003, alleging the funds timed trades to create advantages for some investors at the expense of others.
Motz set the stage for settlement last year by holding funds accountable for "arranged market timing" but not for "non-arranged market timing."
Suits in state courts remain open, including two that Tillery filed in Madison County, but Motz barred plaintiffs from pursuing them on a preliminary basis.
Tillery already faced a big hurdle, for Fifth Circuit appeals judges in Mount Vernon ruled this year that federal securities law precluded one of his claims.
At the Fifth District's direction, Circuit Judge Barbara Crowder dismissed the case.
Putnam and Evergreen funds expected Crowder and Circuit Judge David Hylla to dismiss identical suits, but Tillery wouldn't give up.
He moved to modify Crowder's order and reopen the case.
He moved to amend all three complaints, crafting new allegations and deleting those that the Fifth District connected to federal law.
Putnam removed two cases to federal court in East St. Louis.
Chief Judge David Herndon kept one, and District Judge Patrick Murphy remanded the other to Crowder.
Hylla held a hearing on the motion to amend in April and set another for June 25.
Crowder held a hearing in May and took it under advisement.
On May 27, Crowder received notice that Motz enjoined her proceedings.
No such entry appeared on Hylla's docket, but he cancelled the June 25 hearing.
In federal court, on May 26, Putnam asked Herndon to stay proceedings pending transfer to Motz.