Court hears appeal on American Funds suit
A California Court of Appeal panel on Wednesday heard oral arguments on the state’s attempt to sue the parent of the giant American Funds group over disclosure practices.
A suit filed by then-Atty. Gen. Bill Lockyer in March 2005 accused Los Angeles-based American Funds of failing to properly tell its investors how it paid brokerages to pitch its mutual funds. American Funds are part of Capital Group Cos.
A state Superior Court judge ruled against Lockyer in November 2005, saying that the state’s suit was impinging on federal securities regulation. Lockyer appealed that decision.
At a brief hearing Wednesday in Los Angeles, three justices heard the appeal. Most of the questions and comments were from Justice Miriam Vogel, who said she found nothing in federal law that would prohibit the state from proceeding with its case.
A formal ruling from the court is expected in the next few months.
-- Tom Petruno*
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