Judge Rejects California Bid To Regulate Funds

Law360, New York (November 16, 2005, 12:00 AM EST) -- California’s government doesn’t have the right to regulate what mutual fund companies tell their shareholders, a state court judge ruled Tuesday in a crushing defeat for Attorney General Bill Lockyer's legal onslaught against the the $8-trillion industry over its disclosure practices.

In a tentative ruling, Los Angeles Superior Court Judge Carl J. West concluded that the state did not have jurisdiction to sue American Funds over its disclosure practices involving marketing deals with the brokerages that sell its funds.

The judge sided with American Funds, which...
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