CA: State Drops Long-Running Lawsuit Against Fund Group
Last Updated on Monday, 10 March 2008 12:12 Written by rslcpol Monday, 10 March 2008 12:12
Industry observers are cheering the news that the hugely popular American Funds group stood up to regulators — and won.California Attorney General Jerry Brown said last month that the state has dropped a long-running lawsuit against the nation’s biggest mutual fund group over an alleged failure to adequately disclose revenue-sharing and directed-brokerage agreements, also known as “shelf space” payments.
“John Wayne always wins. That’s exactly what [this case] is — it’s the good guys winning,” said Joseph Hardgrove, owner of Omega Securities Inc. in Fort Worth, Texas. He has nearly $500 million of client assets in American Funds products.