A lawsuit that investors brought against Merrill Lynch financial advisers for promoting a number of mutual funds that paid them extra money to be promoted, including those from Dreyfus, Lord Abbett and BlackRock, has been dismissed.
The lawsuit charged that the funds paid Merrill an additional $16 for each client that purchased them, plus 25 basis points on the assets invested.
Although the investors charged that the payments were not properly disclosed, Judge Richard Owen of the United States District Court for the Southern District of New York ruled otherwise. "I conclude that the current law and SEC regulations impose no duty on the defendants that the funds' offering prospectuses disclose more than they did," part of the Judge's 11-page ruling said.
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