A class action lawsuit against Morgan Stanley disappeared Monday when a Tennessee federal judge dismissed it.
The suit claimed that the firm did not notify investors of Class B mutual fund share fees. In his decision, Judge Todd Campbell of the U.S. District Court in Nashville, wrote: "The prospectus at issue discloses information which would permit any investor to determine the best investment for him or her, under the circumstances."
Not surprisingly, a Morgan Stanley spokesperson, Andrea Slattery, told Reuters the firm was happy with the dismissal.
Class B shares are known for having no initial sales charge or load, but they do carry higher expenses as well as a back-end load. Those suing had said that they were fooled by Morgan Stanleys lack of fee disclosures.
Morgan Stanley has been under scrutiny for its mutual fund sales tactics, even to the point where the NASD has installed sanctions against it.