FIRST INVESTOR SETTLES WITH SECRETARY OF STATE
FIRST INVESTOR SETTLES WITH SECRETARY OF STATE RALEIGH, N.C., Nov. 18 /PRNewswire/ -- Secretary of State Rufus L.
Edmisten announced today that North Carolinians who invested funds in First Investors will have a chance to get their money back under an agreement between the New York securities firm and the Secretary of State's office.
First Investors will offer to return a total of $470,000 to approximately 2,000 North Carolinians, all of whom bought mutual funds offered by the company. The amount returned to each investor will depend on the total number who accept the offer. Edmisten said the agreement settles First Investors' dealings with North Carolina investigators. But the New York firm is still facing allegations in other states that its sales force misrepresented the risks involved in purchasing securities. "This is an excellent settlement by the state," Secretary Edmisten said. "This should resolve the matter to everyone's satisfaction in North Carolina. Other states are still negotiating for a return of their citizens' money." The Secretary of State's office will be sending a letter to North Carolina investors in the near future advising them of the offer. That will be followed by the actual offer in writing by First Investors. Edmisten noted the agreement leaves a maximum number of options for North Carolina investors. Those who wish to accept the settlement may do so, but investors who wish to do so may pursue full restitution through civil court actions. "The option rests with the investors," Edmisten said. "We've gotten them a guaranteed amount for refunds, but they are still free to do whatever they think is best." First Investors is also expected to do a better job of monitoring its sales force in the future, Edmisten said. "The allegations we heard were that First Investors sales people were touting high-yield' funds that were essentially junk bonds, and they weren't telling people enough about the risks involved," said Edmisten. "We felt we were seeing fairly sophisticated products being sold by unsophisticated sales people," Edmisten said. "First Investors will be expected to do a better job of supervising its sales force in the future." -0- 11/18/91 /CONTACT: Elliott Warnock, Department of the Secretary of State, 919-733-4161/ CO: State of North Carolina Department of the Secretary of State; First Investors ST: North Carolina IN: FIN SU: DF -- CH007 -- 4583 11/18/91 15:50 EST
|Printer friendly Cite/link Email Feedback|
|Date:||Nov 18, 1991|
|Previous Article:||CENTOCOR AND CORVAS SIGN ANTIBODY AGREEMENT|
|Next Article:||BAXTER DECLARES QUARTERLY DIVIDENDS|