That sound of celebration you heard this afternoon just may have been coming from the legal team at Merrill Lynch. They have every reason to be smiling after three cases brought by shareholders of the Merrill Global Technology Fund
were dismissed today by a Federal Court judge.
The rulings should bolster the comfort that fund firms have in their protection from investor lawsuits in cases in which securities held in the fund lose significant value along with the market.
U.S. Federal Judge Milton Pollack dismissed two of the cases against Merrill yesterday afternoon and a third today. In the cases thrown out yesterday, investors in a Merrill Lynch advised Internet fund had claimed that Merrill failed to disclose underwriting relationships that it had with many of the companies whose stock was held in the fund.
The ruling in today's case came in the form of a 31-page decision that found Merrill had no duty to disclose information about the relationships between companies who issued stock owned by the fund and Merrill's underwriting division. The ruling today mirror's the judges thinking in the cases tossed out yesterday.
"She (the lead plaintiff) was suing on the same general theme of having bought some shares in a fund and that Merrill Lynch was responsible for the decline in the value of the funds," Pollack told Reuters. "I tossed her out."
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