A class action suit against Dreyfus Corporation of New York will go forward in U.S. District Court in New York. The court dismissed five of eight claims against Dreyfus on Jan. 5. But, the judge allowed three claims to go forward. The remaining claims allege portfolio manager misconduct.
The case will now move into pre-trial fact finding, said Jeffrey L. Kodroff, an attorney with Spector, Roseman & Kodroff of Philadelphia, one of three firms representing the plaintiff. The others are Shalov Stoen & Bonner, and Stull, Stull & Brody, both of New York.
In the three motions remaining, the suit alleges that Michael L. Schonberg, former manager of the Dreyfus Premier Aggressive Growth Fund and the Dreyfus Aggressive Growth Fund, engaged in "front-running," or personally buying securities that he later purchased for the fund, Kodroff said.
The suit also claims that Dreyfus failed to disclose the true nature and volatility of the funds and failed to research and supervise the funds' investments, Kodroff said.