A judge yesterday rejected a class action lawsuit against Merrill Lynch, the largest US brokerage, saying there was no evidence that the firm's actions caused investors to lose money after the stock market collapsed.
His decision marked the fourth class-action lawsuit against Wall Street to be dismissed this week.
The investors claimed that Merrill was liable because it failed to disclose properly that its Global Technology mutual fund was riddled with undisclosed conflicts of interest.
They said the fund invested in companies that were also Merrill investment banking clients. The investors alleged that Merrill's research analysts touted shares of such companies to help the firm in its pursuit of their banking business.
But Judge Milton Pollack said the conflicts of interest on Wall Street were "a matter of public knowledge for years before the amazing boom of the market initially rewarded those who disregarded such caveats."
He also said Merrill was under no legal obligation to disclose its banking relationships with companies in the fund, and that the investors failed to prove that such conflicts caused their losses.
The ruling appeared to confirm a shift in the legal tides for Wall Street. Judge Pollack this week dismissed two other class-action lawsuits filed against Merrill, which claimed that its tainted stock research was to blame for losses suffered by investors in two internet companies that were also Merrill banking clients.
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)