DENVER, Sept. 22, 2008 (GLOBE NEWSWIRE) -- Dyer & Berens LLP today announced that it has filed a class action lawsuit in the United States District Court for the Northern District of Illinois on behalf of certain investors of mutual funds offered by First Trust Portfolios L.P., including shares of the: (1) First Trust Strategic High Income Fund (the "FHI Fund") (NYSE:FHI); (2) First Trust Strategic High Income Fund II (the "FHY Fund") (NYSE:FHY); and (3) First Trust Strategic High Income Fund III (the "FHO Fund") (NYSE:FHO) (collectively, the "Funds"), between July 26, 2005 and July 7, 2008, inclusive (the "Class Period"). The lawsuit also seeks to recover damages on behalf of certain investors who purchased or otherwise acquired shares of the Funds issued in connection with the Funds' initial public offerings ("IPOs"). The complaint charges the Funds, the Funds' registrants, the Funds' adviser (First Trust Advisors L.P.), the Funds' sub-advisers (Hilliard Lyons Asset Management and Valhalla Capital Partners, LLC), and certain of the Funds' officers and/or directors with violations of the federal securities laws.
If you are a purchaser of the Funds during the Class Period, you have the right to petition the Court to be appointed a "lead plaintiff." A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. Any such request must satisfy certain criteria and be made on or before November 12, 2008. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
If you are an investor of the Funds and would like to discuss a potential lead plaintiff appointment, or your rights and interests with respect to the lawsuit, you may contact Jeffrey A. Berens, Esq. at 1-888-300-3362, 303-861-1764, or via email jeff@dyerberens.com.
The class action complaint alleges that the defendants issued false and misleading statements concerning the Funds' portfolios and financial results. According to the complaint, defendants improperly failed to disclose: (i) the extent of the Funds' risk exposure to mortgage-backed assets; (ii) the Funds' failure to properly value the mortgage-backed assets and distressed securities, resulting in an overstatement of the Funds' reported asset valuations; (iii) the extent of the Funds' liquidity risk due to the illiquid nature of a large portion of the Funds' portfolios; (iv) the Funds lack of effective controls and hedges to minimize the risk of loss from mortgage delinquencies, which affected a large part of the Funds' portfolios; and (v) the Funds lack of effective internal controls to ensure that the Funds would remain in compliance with their restrictions and limitations related to their investment portfolio and strategies. Based on these alleged omissions, the Funds' shares traded at artificially inflated levels throughout the Class Period.
Beginning in August 2007 and continuing through July 2008, the Funds began to acknowledge the serious deterioration in the Funds' portfolios. As a result of these disclosures, the price of the Funds' shares collapsed. Prior to any negative disclosures, each of the Funds traded within a narrow trading band. For example, the FHI Fund traded within the $17 and $20 per share range from July 2005 through July 2007. In contrast, by August 2008, the FHI Fund was trading in the $8 and $9 per share range.
Plaintiff seeks to recover damages on behalf of certain purchasers of the Funds during the Class Period. The plaintiff is represented by Dyer & Berens LLP, which has expertise in prosecuting investor class actions involving financial fraud. The firm's extensive experience in securities litigation, particularly in cases brought under the Private Securities Litigation Reform Act, has contributed to the recovery of hundreds of millions of dollars for aggrieved investors. For more information about the firm, please go to www.DyerBerens.com.