American Funds Settles "Shelf Space" Suit: Report

Law360, New York (February 15, 2008, 12:00 AM EST) -- Mutual fund group American Funds reportedly has settled a long-running lawsuit with the California attorney general alleging that it had defrauded customers by not disclosing that some funds it recommended had paid for the praise.

Under the agreement, American Funds will reveal more in its public documents about its relationships with brokers, and its parent company will pay the attorney general's office $2.5 million in legal fees, the L.A. Times reported Friday.

The U.S. Securities and Exchange Commission has also ended a probe of the company,...
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