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Money Management Executive

Smith Barney and Salomon Sued by Investors

June 22, 2004, 1:00 a.m. EDT 1 Min Read

A class-action lawsuit was filed last week against Smith Barney and Salomon Brothers for alleged misleading of mutual fund investors.

The suit, filed in New York by Stull, Stull & Brody, also names Citigroup as a defendant. It alleges that between March 22, 1999 and March 22, 2004, the funds violated the 1934 Securities Exchange Act because they "engaged in an unlawful and deceitful course of conduct designed to improperly financially advantage defendants to the detriment of plaintiff and the other members of the Class."

Specifically, Smith Barney is accused of offering handsome rewards to brokers who pushed and sold Smith Barney and Salomon Brothers funds, and paying "excessive commissions" with money that came directly from the funds. Investment advisers, it continues, wound up profiting at the expense of the investors. Investors were not told of the aggressive push toward selling the specific funds.

Obviously, the suit asks for recovery of damages for the investors. Investors have until July 27, 2004 to join in on the class action.

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