Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-04518/USCOURTS-cand-3_05-cv-04518-25/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 28:1331 Fed. Question: Securities Violation

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

RONALD SIEMERS, individually and on

behalf of all others similarly situated,

Plaintiff,

 v.

WELLS FARGO & CO.; WELLS FARGO

FUNDS MANAGEMENT, LLC; WELLS

CAPITAL MANAGEMENT, INC.; H.D.

VEST INVESTMENT SERVICES; WELLS

FARGO INVESTMENTS, LLC; STEPHENS,

INC.; and WELLS FARGO FUNDS TRUST,

Defendants. /

No. C 05-04518 WHA

REQUEST FOR FURTHER

BRIEFING

With respect to the pending motion to file a third amended complaint and to further the

Court’s understanding of the matter for case management purposes, both sides are requested to

file supplemental memoranda limited to 12 pages, double spaced (no footnotes, 12-point font)

by JANUARY 16, 2007, at NOON, with six-page replies to be filed within 48 hours thereafter. All

defendants must file together as one side.

1. Given that a principal theme of the complaint is that Wells Fargo broker-dealers

steered plaintiffs into the subject investments via recommendations, advice, and guidance,

please identify and quote the precise sentences in the proposed pleading that specify such

recommendations, advice, and guidance. Please do so as to each plaintiff and proposed

Case 3:05-cv-04518-WHA Document 189 Filed 01/09/07 Page 1 of 3
United States District Court

For the Northern District of California

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plaintiff, including Mr. Siemers. Plaintiffs should state what further allegations they could

make in good faith on this subject.

2. Presumably some putative class members were not steered but invested as a

result of their own homework. To what extent will this vary from individual to individual and

then be an “individualized” issue for Rule 23 purposes?

3. If no recommendation or advice was given by the broker-dealers, then was the

alleged undisclosed conflict immaterial, i.e., the conflict mattered only if investment advice was

given by the broker-dealer and the advice was followed by the class member?

4. The complaint also alleges the prospectus was misleading for failure to disclose

that the fund was being wasted and diminished improperly through excessive fees. As to

mutual funds operated and advised by persons other than Wells Fargo (such as various

Oppenheimer funds), what allegations in the proposed complaint would support a strong

inference that the Wells Fargo broker-dealers were aware of the alleged improper and

undisclosed diversion from the fund? Put differently, the complaint alleges that the defendant

broker-dealers knew they themselves were receiving kickbacks. The source of the kickbacks,

however, might have been independent assets of investment advisers. What allegations in the

proposed complaint would support a conclusion that the broker-dealers knew the true (alleged)

source and that the disclosure in the prospectus about possible payments to the broker-dealer

was a half-truth. This question focuses on funds not controlled by Wells Fargo and inquires as

to how Wells Fargo broker-dealers would have known the inner workings of the independent

non-proprietary funds.

5. The proposed complaint challenges the sufficiency of the disclosures in

prospectuses for over 90 funds, most of which were independent funds (such as various

Oppenheimer funds). Although the complaint alleges that all prospectuses and SAIs were

“identical in substance,” only one prospectus is actually quoted (Paragraph 88) as to the

selection of broker-dealers, the placing of portfolio transactions, and payments to

broker-dealers. Have plaintiff’s counsel reviewed specifically each and every prospectus and

Case 3:05-cv-04518-WHA Document 189 Filed 01/09/07 Page 2 of 3
United States District Court

For the Northern District of California

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SAI for all 90-plus funds and made sure the language is identical in substance? Regardless, is

there a duty to plead each and every specific prospectus and SAI alleged to have been

misleading under Section 10(b)?

IT IS SO ORDERED.

Dated: January 9, 2007. WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

Case 3:05-cv-04518-WHA Document 189 Filed 01/09/07 Page 3 of 3