A federal judge has dismissed a lawsuit against Merrill Lynch, labeling the investors who brought the action "high-risk speculators."

The lawsuit accused Merrill and former analyst Henry Blodget of producing tainted research on two technology companies, 24/7 Real Media and Interliant during the dot-com boom, leading to investor losses.

In a ruling that could have far-reaching impact, U.S. District Judge Milton Pollack threw the suit out, saying the investors were now trying to blame Merrill Lynch for encouraging them to join in the buying of stocks that sometimes doubled in value in hours, days and weeks.

Pollack said the two lawsuits were filed by investors who were no more than "high-risk speculators" who "now hope to twist the federal securities laws into a scheme of cost-free speculators' insurance," and who never would have sued had they made money and sold before the crash. Federal securities laws were not meant to "underwrite, subsidize and encourage their rash speculation in joining a freewheeling casino that lured thousands with the fantasy of Olympian riches," the judge wrote.

Experts say the case, and another made public yesterday, could put roadblocks in front of other investors seeking to recoup losses related to Wall Street brokerage companies that allegedly produced tainted analyst research.

Pollack said yesterday the plaintiffs failed to show that Merrill and Blodget directly caused their losses. His ruling noted the investors filing the suit were not direct customers of Merrill Lynch and did not claim to have read the research report produced by Blodget. Instead, the plaintiffs had relied "almost exclusively" on filings produced by investigators in New York Attorney General Eliot Spitzer's office.

Spitzer was among a group of federal and state regulators who negotiated a $1.4 billion settlement with 10 brokerages over analyst conflict-of-interest allegations.

Blodget was a high-profile analyst who publicly touted many Internet firms through research reports but disparaged their value in private e-mails, according to evidence released by Spitzer.

Spitzer has said that the best way for investors to win back money would be through the legal process rather than restitution.

"We're pleased with the judge's decision," said Mark Herr, spokesman for Merrill Lynch.

Pollack has 25 other class-action cases involving conflicts of interest at brokerage companies before him.

In another case made public yesterday, another federal judge threw out a class-action suit that claimed research analysts for Goldman Sachs, Credit Suisse First Boston and Morgan Stanley Dean Witter issued biased reports.

But that ruling, by U.S. District Judge Harold Baer in a case surrounding research reports on Covad Communications in 1999 and 2000, rested more on legal technicalities than broad merits.

Material from The Associated Press is used in this report.