The Dreyfus Corporation
and the New York Attorney General
's office have settled a case involving alleged misleading advertising of the Dreyfus Aggressive Growth Fund
, which had included returns largely based on IPOs during the fund's first year of operation, in 1995-96.
According to the attorney general, the fund's advertising of almost 80 percent returns in its first year did not include any notification that much of that performance was due to one-time participation in IPOs and riskier micro-cap companies. In addition, the inquiry included questions about the personal trading of the fund's former manager, Michael Schonberg
, while he was manager of the fund.
Dreyfus and Schonberg settled the inquiry without admitting to any wrong-doing. However, the firm will pay the SEC $950,000 and Schonberg has agreed to a nine-month suspension from association with any investment adviser and agreed to pay the SEC $50,000.
In addition, Dreyfus will reimburse the New York Attorney General's costs of
investigation, and contribute $1.6 million to the State University of New York
for the "enhancement of investor education and awareness."
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