B Shares

THE PROBLEM with a scandal that has a new development every day is that it's easy to get ho-hum about the most current events. The reaction to Morgan Stanley's recent $50 million settlement with the Securities and Exchange Commission tended to be a yawn, as if investors and commentators have seen it all before. But the Morgan Stanley settlement covered new ground, and for investors who use a broker or financial planner, the deal was new territory for concern. In fact, the charges Morgan faced have a much more tangible impact on shareholders than the deals that have been in the news for two months now. The vast majority of those problems, involving firms such as Putnam, Janus, Strong, Alliance and others, have revolved around trading situations in which managers or privileged customers were allowed to make rapid-fire trades that were supposed to be prohibited for all shareholders.

Robert B. Hill has earned a living and reputation by studying America's black families. Today, three decades after publishing the results of his first exhaustive examination, he is both optimistic and alarmed by what he sees. Hill is a social scientist and senior researcher for Westat, a large Rockville-based company that conducts research for government and businesses. He formerly was director of the Institute for Urban Research at what was then Morgan State College, as well as head of research for the National Urban League, the 93-year-old black-advocacy organization.

IF YOU'RE buying a mutual fund through a broker, it pays to know your ABCs. In this case, the alphabet designates the class of shares you're purchasing. You'll generally find different share classes in funds that carry loads, or sales charges. While a mutual fund's investments and money manager are the same no matter the class of shares, each class has its own expenses and sales charges that go toward compensating brokers or financial advisers for their guidance. It's the investment professional's duty to advise investors on the class of shares best suited for them, factoring in the amount being invested and how long the shares will be held.

MURRAY HILL, N.J. - Lucent Technologies Inc., the biggest U.S. maker of telephone equipment, set yesterday the distribution of shares in the spinoff of its remaining 58 percent stake in chip-maker Agere Systems Inc. Lucent said it will issue one share of Agere Class A common stock for every 92.768991 shares of Lucent common stock and one Agere Class B common stock for every 3.779818 shares of Lucent common stock. Lucent will distribute the shares June 1 to stockholders of record as of May 3. Both A and B shares of Agere will be distributed to Lucent shareholders as a tax-free dividend.

HAVE YOU heard of mutual fund "B" shares? Although not well-publicized, they are attractive for long-term mutual fund buyers. "B" shares have no front-end sales charge, or "load," but carry a fee if you redeem shares within a certain number of years," says Mutual Fund Education Alliance newsletter. "This `back-end load' declines every year until it disappears, usually after five years. `B' shares also carry a 12b-1 marketing fee typically higher than the 12b-1 fee of `A' [front-end load]

CHANCES ARE, you believe an "unsuitable investment" is something that's too risky, speculative, volatile or simply inappropriate for an investor's age and personal circumstances. But sometimes it's not the investment itself that's unsuitable; it's the plain brown wrapper it comes in. In the case of mutual funds, the wrapper is the share class, and a recent action taken by NASD Regulation Inc. against a St. Louis broker highlights a problem that most investors know nothing about: the wrong share class can be just as bad for you as risky, speculative garbage investments.

Crown Central Petroleum Corp. said yesterday that it is still exploring a possible deal with Rosemore Inc., the holding company controlled by Crown Chairman Henry A. Rosenberg Jr. and his family. In a brief statement, Crown also said it was "discussing its strategic alternatives" with Apex Oil Co. of St. Louis, which has been trying for more than a year to acquire the Baltimore-based refiner. Yesterday was Crown's latest deadline for Apex to make a tender offer of $10.50 a share for the Baltimore-based refiner.

The deadline by which Crown Central Petroleum Corp. said it wanted a tender offer from Apex Oil Co. in St. Louis, which has been trying for nearly a year to take over the Baltimore-based refiner, came and went yesterday with no word from either side. The independent directors at Crown, which include the entire board except Crown Chairman Henry A. Rosenberg Jr., asked Apex to make a fully financed, all-cash unconditional tender offer at $10.50 a share after shareholders rejected Crown's bid to merge with Rosemore Inc., a holding company owned by Rosenberg and his family.

Shareholders yesterday rejected a proposal to turn Crown Central Petroleum Corp. over to the family that has controlled it for 70 years. The deal had been assailed in recent weeks by a rival bidder, union members and an independent proxy advisory firm in a blur of federal filings, counterfilings and vitriolic news releases. The vote against merging Baltimore-based Crown with Rosemore Inc., a holding company owned by the same family that runs Crown, thwarted the plans of Henry A. Rosenberg Jr., chairman of both Crown and Rosemore.