INVESTORS SUE DEAN WITTER OVER LIMITED PARTNERSHIPS.
A group of investors sued Dean Witter Reynolds Inc. for $300 million Monday, saying it duped them into placing risky bets on commodities and currency futures.
The investors claim they lost millions of dollars in the early 1990s by buying $1.2 billion in Dean Witter limited partnerships that invested in the volatile financial securities.
The suit was filed in Los Angeles Superior Court on behalf of plaintiffs who bought investments from a Dean Witter broker in Santa Monica, said Melvin Weiss, a lead lawyer on the case with the New York-based law firm of Milberg Weiss.
Timothy Lee, a Dean Witter spokesman, said the firm does not comment on lawsuits as a matter of policy.
The suit is the latest twist in the legal fight arising from the sale of billions of dollars in limited partnerships in the 1980s and early 1990s.
Dean Witter and other well-known brokerages, including Merrill Lynch & Co. and Lehman Brothers Inc., have been separately named in suits that accuse them of conning customers into purchasing risky investments in real estate, energy and airlines in the 1980s and early 1990s.
The Dean Witter lawsuit, which seeks class-action status for tens of thousands of investors, is the first major suit to allege wrongdoing involving commodities and currency futures. The suit also targets other defendants, including managers of the Dean Witter investments who helped shape the language of the sales material.
The suit alleges that Dean Witter portrayed the investments as safe and as yielding high returns without adequately disclosing the risks. The defendants allegedly said the funds reduced their risk and volatility.
In addition, the suit charges that investors were not given prospectuses, which contain warnings about risk, until after purchasing their fund shares.
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|Publication:||Daily News (Los Angeles, CA)|
|Date:||Sep 10, 1996|
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