Mutual funds in US try to block lawsuits
Publish date: 27 June 2005
Issue Number: 1364
Diary: Legalbrief Today
Category: General
A US District Court in Baltimore has heard arguments by attorneys for mutual fund companies who want numerous civil lawsuits alleging preferential treatment of wealthy clients at the expense of ordinary investors thrown out.
The Los Angeles Times reports the case pits investors nationwide against 18 fund families. More than 200 legal complaints have been filed. Plaintiffs contend that wealthy clients were allowed to book after-hours trades at prices already closed to most fund shareholders. The investors also claim fund managers allowed quick in-and-out investing known as market timing. Although market timing is not illegal, most funds prohibit it because it racks up expenses that hurt other shareholders. Full report in the Los Angeles Times
