Securities class action regarding mutual fund performance. Defense counsel for a major nationwide broker dealer retained Cornerstone Research and Professor Christopher M. James of the University of Florida to analyze factors that led to the decline in late 2007 and early 2008 of the net asset value (NAV) of a proprietary ultrashort bond mutual fund. Shareholders of the fund filed a securities class action under Sections 11 and 12 of the Securities Act of 1933, alleging that the defendants falsely portrayed the fund as a conservative investment with minimal risks. Among other allegations, shareholders claimed that the fund invested more than 25 percent of its assets in non-agency mortgage-backed securities (MBS), allegedly exceeding a policy limit on the concentration of assets in any one industry. The plaintiffs claimed that this overconcentration led to the NAV decline when credit and liquidity risks materialized during the financial crisis.

what were the key allegations made by shareholders against the major nationwide broker dealer under the Securities Act of 1933?