Printer Friendly

FIRST INVESTORS RESOLVES LITIGATION

 NEW YORK, Oct. 13 /PRNewswire/ -- First Investors Corporation said today that it has reached agreements to settle state regulatory proceedings filed by securities regulators in New York, Massachusetts, Maine, Virginia and Washington, thereby concluding all remaining state actions.
 These proceedings involved the company's sales, primarily during the 1980s, of two high yield bond mutual funds -- the First Investors Fund for Income and the First Investors High Yield Fund. None of the company's other 43 mutual funds has been involved in any of these proceedings.
 In addition, the company announced that it has reached agreements to settle all class action and derivative litigation arising out of the sale of the two funds, subject to court approval.
 Michael S. Miller, chief executive officer at First Investors, noted that the company, which made no admission of liability or wrongdoing, agreed as part of the settlements to add $7.5 million to a $24.7 million settlement fund created in connection with a prior settlement of claims by the Securities and Exchange Commission in June 1992.
 "We are quite pleased to reach these settlements, which will finally put these matters behind us," said Miller. "Many of these states' complaints date back to the mid-1980s or before. First Investors has carefully reviewed and addressed the issues raised by these proceedings, and has made significant improvements and changes to its operating policies. We are now anxious to move forward, serving the best interests of our fund shareholders, the company, our sales representatives and employees. While these settlements put an end to what has been costly and disruptive litigation, we believe the company is well poised for the future."
 Since Miller arrived at First Investors in February of 1991, new marketing, training, legal, compliance and sales management have been hired, significantly strengthening all aspects of the company's operations.
 "Today, we believe our programs, policies and procedures are exemplary, and in many respects at the forefront of the securities industry," Miller noted.
 According to Miller, the two funds involved in the litigation have reported significant gains in recent years. Those investors who did not liquidate at the time of the lawsuits have seen their investments fully recover from the marketwide junk bond crisis of a few years ago and today have substantial market gains.
 "Investors should understand that mutual fund investment is, by and large, a long-term endeavor," said Miller.
 Last year, First Investors had resumed sales of its two high yield bond funds in most states. The company had voluntarily suspended sales of these funds shortly after the litigation commenced. As a result of the settlements reached today, the company will resume sales in these five additional states.
 First Investors is a 63-year-old company that manages and sells mutual funds and insurance products, and provides investment services to investors throughout the nation. First Investors, with $3.8 billion currently under management and more than 300,000 customer accounts, is headquartered on Wall Street.
 -0- 10/13/93
 /CONTACT: Jim Kerr of First Investors Corporation, 212-858-8016, or David Fridling of Ruder-Finn, Inc., 212-593-6321/


CO: First Investors Corporation ST: New York IN: FIN SU:

LG-TW -- NY094 -- 1821 10/13/93 15:53 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 13, 1993
Words:524
Previous Article:SENTROL LIFESAFETY COMPLETES EVALUATION OF ARITECH; EXPECTS OFFER TO CLOSE AS SCHEDULED
Next Article:FEDERAL COURT DISMISSES MAGELLAN COUNTERCLAIMS
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters