Tech investors dealt further blow

A second victory for Merrill Lynch

A US judge has thrown out another case brought by tech investors who claimed they were misled about investment prospects.

The case was brought by investors who put their cash into Merrill Lynch's Global Technology Fund, but was rejected by US Federal Judge Milton Pollack.

The ruling comes a day after Judge Pollack had dismissed two class-action cases against Merrill Lynch.

On Tuesday, the judge had described the investors as "high-risk speculators", who had lost their money "fair and square" when the internet bubble burst.

Omissions

Merrill's Global Technology Fund soared by about 88% during 1999, but the bursting of the tech bubble saw its value tumble.

The lawsuit brought against the Merrill Lynch fund claimed the fund's prospectus did not include important facts.

But Judge Pollack said the defendants had "no duty" to disclose the allegedly omitted information.

The lawsuits dismissed on Tuesday related specifically to the investments lost in two dot.coms, Interliant and 24/7 Real media.

US securities laws are not meant to "underwrite, subsidize and encourage their [investors'] rash speculation in joining a freewheeling casino that lured thousands with the fantasy of Olympian riches," the judge wrote.

Paid-up

Even though investors have had their case overthrown, Merrill Lynch and other Wall Street giants have already paid a total of $1.4bn to settle charges of biased research brought by the US regulator.

The banks denied any wrongdoing but agreed to cut the link between their share research and investment banking activities which could create a conflict of interest.

Shares in Merrill Lynch ended 44 cents higher at $48.64 on Wednesday following news of the judge's decision.