WASHINGTON - The SEC will continue to pay attention to mutual fund advertising, but it is potential scrutiny of fund ads by plaintiffs' lawyers that is giving some industry participants pause.

The SEC's recent enforcement case against Van Kampen Investment Advisory Corp. of Oakbrook, Ill. provides an invitation to plaintiffs' lawyers to file class action lawsuits against mutual funds when performance drops, according to Richard D. Marshall, a lawyer in the New York office of Kirkpatrick & Lockhart LLP of Pittsburgh, Pa. Plaintiffs' lawyers, citing the Van Kampen case, will argue that fund advertisements are fraudulent because the ads describe past investment performance but omit allegedly significant facts that would show that the performance was unlikely to be repeated, Marshall said.

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