A lawsuit that investors brought against Merrill Lynch financial advisers for promoting a number of mutual funds that paid them extra money to be promoted, has been dismissed, Reuters reports.
The lawsuit charged that the funds paid Merrill an additional $16 for each client that purchased one of the funds in addition to 25 basis points on the assets invested.
Although the investors charged that the payments were not properly disclosed, Judge Richard Owen of the United States District Court for the Southern District of New York ruled that the fees were disclosed to investors.
"I conclude that the current law and SEC regulations impose no duty on the defendants that the funds' offering prospectuses disclose more than they did," part of the Judge's 11-page ruling said. "The fees charged to shareholders, which were disclosed, do not constitute a 'loss,' and plaintiffs have not tied the investment performance to any fund to the alleged misrepresentations and omissions."