California AG Rebuked In Mutual Funds Suit

Law360, New York (June 2, 2006, 12:00 AM EDT) -- A judge dismissed a California lawsuit alleging that brokerage firm Edward D. Jones & Co. defrauded customers by withholding information from them, saying the matter is not one for the state to decide.

This is the second defeat for Attorney General Bill Lockyer, whose previous attempt to regulate mutual funds' sales practices was also blocked by the courts.

The suit was filed after the brokerage firm allegedly failed to disclose “shelf space” payments it received from mutual funds in return for recommending the funds to clients....
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