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To: techanalyst1 who wrote (14253)	10/9/2002 6:46:36 PM
From: Lizzie Tudor	Read Replies (6) \| Respond to of 57684

application software had a great day today- finance.yahoo.com

To: techanalyst1 who wrote (14253)	10/9/2002 7:03:13 PM
From: stockman_scott	Respond to of 57684

Merrill Sued over Losses in Mutual Fund By Martha Graybow Wednesday October 9, 6:36 pm ET NEW YORK (Reuters) - An investor sued Merrill Lynch & Co. Inc. (NYSE:MER - News) on Wednesday over losses in its Focus Twenty mutual fund, claiming the fund invested too heavily in risky technology stocks and that its stock picks were linked to the firm's investment banking business. The lawsuit, filed in Broward County Circuit Court in Florida, seeks class-action status and asks for at least $1 billion in damages. The lawsuit contends investors were not adequately told that the fund focused on "highly speculative" stocks. "These are investors that went with the largest brokerage firm in the world," said Darren Blum, a securities lawyer representing the plaintiff. "They have lost 90 percent in about 2-1/2 years, which is inexcusable." The lawsuit names Merrill Lynch and the Merrill Lynch Focus Twenty Fund (Nasdaq:MAFOX - News) as defendants. Merrill Lynch spokesman Mark Herr said "the lawsuit is baseless and without merit." The fund's prospectus "clearly and adequately" identified the fund's risks, he said. Allegations that the fund's stock picks were influenced by the company's investment banking business also are groundless, Herr said. "The bottom line in all of this is the research was independent. It wasn't linked in any way to investment banking," he said. The company's research for its mutual fund offerings also is "independent of all other research that goes on in this firm," he said. Merrill Lynch has been under fire for the accuracy of its stock analysts' research and whether it tailored its reports to help it win investment banking business. Merrill recently agreed to a settlement with the New York State attorney general over e-mails in which the company's analysts trashed stocks they had lauded in public. The Focus Twenty fund debuted with a splash in early 2000 -- just before technology stocks crashed. It raised $1.05 billion in assets before it was even launched, amid excitement about its prospects. The fund's assets had dropped to about $189 million as of Sept. 27, according to Merrill Lynch data. The fund is designed to focus on about 20 stocks "believed to have strong earnings growth and capital appreciation potential," according to a Merrill press release in March 2000. But the fund was beaten up badly by the technology stock crash. The original manager of the fund, James McCall, parted ways with Merrill last year as performance tumbled. The Focus Twenty portfolio plummeted about 70 percent last year, according to research firm Morningstar Inc. Results have not improved much since then. The fund, now run by portfolio manager Mike Hahn, is down about 42 percent so far in 2002, putting it in the bottom 5 percent of all large-company growth stock funds during the period, according to Morningstar data.