August 28, 2008:
Hanly Conroy Files Actions on Behalf of Mutual Fund Investors

Suing on behalf of mutual fund investors, Hanly Conroy filed derivative and class action lawsuits against mutual fund managers and advisors who unlawfully invested and lost tens of millions of dollars in illegal offshore gambling entities. Until 2006, a number of foreign companies took bets over the Internet from gamblers in the United States, which the suits claim is a violation of federal and state law. The suits allege that the mutual fund managers knew or should have known of the illegality. For example, the prospectus of one of the gambling companies acknowledged that its 'activities are considered to be illegal by relevant authorities' in the US. The value of the shares of the gambling businesses tumbled when authorities in the US began a crackdown in 2006. The complaints also allege that, in addition to violating RICO, the managers were negligent, breached their fiduciary duties to the funds and their investors, and wasted fund assets. The actions are the first of their kind and are filed in federal court in New York.

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