Alliance Capital reached a settlement with New York State Attorney General Eliot Spitzer and the SEC in December, and a little less than two months later, Morningstar is pulling its "consider selling" label from the fund group.

Chicago-based Morningstar caused a stir when it initially told investors to consider selling funds from groups involved in the scandal. Alliance was one of the firms it denounced. Alliance’s deal with regulators included a reduction in fees and restitution to shareholders, bringing the total cost of the settlement to an estimated $600 million when all is said and done.

"We think AllianceBernstein has risen to that standard, although our decision to remove the company's funds from our ‘consider selling’ list should by no means be construed as an endorsement of those offerings," Morningstar wrote in a statement.

Morningstar said that while investors should be critical of the firm for its shady behavior, Alliance has worked to remedy the situation. At the time of the recommendation, Morningstar disapproved of the firm’s high expenses, coupled with its history of launching inappropriate funds and its aggressive sales culture. The settlement with Spitzer helped the change of heart a great deal. Additionally, the new leadership’s approach and the firm’s movement to change the way it sells funds, factored into the change.

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