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To: Imran who wrote (4880)	5/31/1998 4:24:00 PM
From: Oska	Respond to of 164685

Imran, I used to have some of the suspicions on Jeffrey Vinik regarding manipulation of MU while at Magellan on which you wrote the following: <Although I never had Vinik manage my money I remember when he controlled Fidelity's Magellan fund and was manipulating Micron. With Magellan he caused Micron to run up to an all-time high of 95, and then came on CNBS to recommend Micron as a buy. It later came out that at the time he was selling Micron. A lot of people sued Fidelity for his false remarks.> However, the following article from the May 25 Fortune made me reassess the issue; it is off the AMZN beaten path, but I think some readers would enjoy reading it, especially as it raises the PR concerns of firms like Magellan. All my best, Osman. * * * * * * * * * * * * * * * * * * * He's Innocent! Records prove Magellan's Vinik wasn't manipulating anything. Joseph Nocera A few weeks ago a reporter for the trade newsletter Mutual Fund Market News went to the federal courthouse in New York City to see whether there were any new filings in a long-standing class-action suit against Fidelity Investments. The suit revolved around the infamous 1995 allegation that Jeffrey Vinik, while running the Magellan fund, had touted Micron Technologies even as he was quietly selling the stock. After the story broke, some Micron holders sued, claiming that Vinik's actions had caused them to buy the stock at "artificially inflated prices." Although Fidelity got most of the case thrown out of court, one count remained. Rather than face trial, Fidelity settled for $10 million. The settlement was agreed to last October, but the judge has not yet approved it. (He was expected to do so at the end of April.)The reporter, Mike Garrity, was looking for briefs that both sides had to submit supporting the settlement. What he found, in fact, was strong evidence in Fidelity's favor. According to Fidelity's filing, during the two key dates, Nov. 9 and 10, 1995, Vinik not only had not been a seller of Micron but had been a huge buyer, purchasing 1.8 million shares. As the brief puts it: "These substantial purchases of Micron stock... completely contradict plaintiffs' claim." The lead plaintiffs' attorney, Glen DeValerio, claims that the record also shows that Vinik soon began selling--information he had left out of his brief because "there was no need to get in a pissing contest with Fidelity. The case had been settled." But Stuart Savett, another lawyer involved in the case, conceded to Garrity that Vinik's heavy buying gave the company "a pretty good defense." Which raises an obvious question: If Fidelity had the facts on its side, why did it pay $10 million? Though the sum is negligible for Fidelity, it still means that money is going to plaintiffs who don't have a case. Fidelity's brief offers the usual defenses: settling "avoids the distraction" of litigation and allows investors to focus on "positive developments in Magellan...." Well, maybe. Savett says Fidelity settled because of the "horrible PR" that resulted from the allegations. Actually, you'd think being vindicated in court would give the company a nice PR boost. One question that certainly gets answered is why lawyers file baseless lawsuits. In this case, they're due to get around $3.3 million. That's one sweet payday for a fishing expedition that caught no fish.