New York, July 03: A federal judge handed Merrill Lynch its second court victory in as many days on Wednesday, dismissing a case by investors who claimed they were duped by biased research into investing in a technology fund.
In a 31-page decision, Judge Milton Pollack, 96, threw out the case in which plaintiffs claimed the prospectus for Merrill Lynch & Co.'s Global Technology Fund had not disclosed material facts and analysts issued misleading research on companies held in the fund's portfolio.


"She (the lead plaintiff) was suing on the same general theme of having bought some shares in a fund and that Merrill Lynch was responsible for the decline in the value of the funds," Pollack told Reuters. "I tossed her out."



In his decision, Judge Pollack said the defendants had "no duty" to disclose the allegedly omitted information.

"This is a good day for the industry, not just for Merrill," said a securities lawyer in Washington, DC, who wished to remain anonymous. "A very highly respected judge has decided that the losses the investors suffered were not the intent of any intentional wrongful conduct by the brokerage firms."


On Tuesday, Judge Pollack dismissed two class-action cases brought by investors against Merrill Lynch. The investors had claimed they lost money in two Internet stocks because of biased research analysis by Merrill.



Investors in the Global Technology fund alleged they were duped in part because the fund invested in the stock of companies that Merrill Lynch investment bankers were doing business with. The fund's top holdings currently are Microsoft Corp., Dell Computer Corp. and Cisco Systems Inc., according to the most recent Morningstar data.

The technology fund jumped about 88 percent in 1999, but tumbled during the three-year bear market and has lost 37.8 per cent on average for each of the past three years, according to research firm Morningstar Inc. But it has rebounded this year as technology stocks rallied, gaining about 28 per cent.


Merrill hired a new manager for the fund, which has about $569 million in assets, in October 2002. David Poiesz, was hired from outside of the firm and is the fund's third captain since late 2001. The fund's original manager was Paul Meeks, who left in late 2001.


Merrill Lynch shares closed up 44 cents, or nearly one percent, at 48.64 on the New York Stock Exchange.
Bureau Report