The Dreyfus Corporation of New York has tentatively agreed to pay $20.5 million to settle a federal class action lawsuit and a state lawsuit which were brought against the fund company in the summer of 1998 by investors in two Dreyfus mutual funds.

A joint hearing to approve the settlement, proposed Jan. 30, is scheduled before a federal and state court judge on May 30 in State Supreme Court in New York. The judges will have to decide if the settlement is fair, reasonable and adequate, and in the best interest of the plaintiffs, according to a notice of settlement document filed on behalf of all parties.

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