VA. JUDGE DISMISSES SECURITIES-FRAUD CHARGE AGAINST FIRST INVESTORS

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, January 19, 1993                   TAG: 9301190093
SECTION: BUSINESS                    PAGE: A5   EDITION: STATE  
SOURCE: 
DATELINE: RICHMOND                                LENGTH: Short
VA. JUDGE DISMISSES SECURITIES-FRAUD CHARGE AGAINST FIRST INVESTORS
A judge Monday dismissed a misdemeanor securities-fraud charge against First Investors Corp. after the prosecution had rested its case.
Richmond Circuit Judge James B. Wilkinson said he had "great reservations" about the prosecution's case. Wilkinson added that if the fraud did occur, the statute of limitations had expired.
Prosecutors argued the Wall Street company had trained its sales representatives to falsely tell clients their funds were as safe as a certificate of deposit. The charge revolved around two of the company's 42 mutual funds.
Prosecutors claimed that between 1985 and 1989 investors in the two junk bond mutual funds were given the false assurance of safety.
James C. Roberts, the company's attorney, last week told the jury that $10,000 invested in 1975 in the two funds would be worth $62,000 today if the investors had reinvested their dividends.
Prosecutors said the value of such an investment dropped from $49,446 to $37,611 in the late 1980s. It was then the alleged misrepresentations occurred and many investors had substantial losses, prosecutors said. - Associated Press

by Bhavesh Jinadra by CNB