News & Analysis as of

Mutual Funds Excessive Fees

Proskauer - Employee Benefits & Executive...

California District Court Denies Motion to Dismiss 401(k) Excessive Fee and Underperformance Claims

A California district court recently denied a motion to dismiss claims that the fiduciaries of a 401(k) plan breached their ERISA fiduciary duties of prudence and loyalty by selecting underperforming, high-cost investments...more

Holland & Knight LLP

Low-Cost Index Funds in the Crosshairs of New 401(k) Lawsuits

Holland & Knight LLP on

Since late July, at least 10 lawsuits have been filed against large 401(k) plan sponsors that offer certain BlackRock Inc. target-date funds (TDF) among their investment options. In an unexpected pivot away from the 401(k)...more

Proskauer - Employee Benefits & Executive...

Ninth Circuit Revives Second Excessive Fee 401(k) Plan Litigation

On Friday, for the second week in a row, the Ninth Circuit reversed dismissal of a 401(k) plan excessive fee litigation challenging the offering of retail share classes of mutual funds instead of cheaper institutional share...more

Proskauer - Employee Benefits & Executive...

District Court Declines to Dismiss 401(k) Fee Litigation Case in First Decision Post-Hughes

In the first decision since the Supreme Court’s ruling in Hughes v. Northwestern Univ., No. 19-1401, 595 U.S. ___ (U.S. Jan. 24, 2022), a Georgia federal district court held in favor of plaintiffs and declined to dismiss...more

Goodwin

Financial Services Weekly Roundup: SEC Proposes Modified Disclosure Framework For Funds

Goodwin on

In the News. The Securities and Exchange Commission (SEC) proposed modifying the disclosure framework for mutual funds and exchange-traded funds (funds), which would create a new layered disclosure regime that attempts to...more

Ary Rosenbaum - The Rosenbaum Law Firm P.C.

JP Morgan ponies up $9 million

A settlement has been in a lawsuit accusing fiduciaries of the JPMorgan Chase 401(k) Savings Plan of self-dealing. Records show that a settlement of $9 million will be made to “fully, finally and forever resolve, discharge...more

Bass, Berry & Sims PLC

Chris Lazarini Outlines Factors to Determine Whether Adviser's Fees Violate Investment Company Act

Bass, Berry & Sims PLC on

Bass, Berry & Sims attorney Chris Lazarini outlined the factors courts must consider in determining whether the fees an adviser charges a mutual fund are excessive and in violation of the Investment Company Act. All the...more

Goodwin

In First Published Appellate Decision Addressing Gartenberg Factors Since Jones v. Harris, U.S. Court of Appeals Rejects...

Goodwin on

On March 30, 2020, 10 years to the day after the Supreme Court issued its decision in Jones v. Harris, 559 U.S. 335 (2010), the U.S. Court of Appeals for the Sixth Circuit issued the first published federal appellate decision...more

Dechert LLP

Sixth Circuit Issues Section 36(b) Ruling Affirming Grant of Summary Judgment To Mutual Fund Investment Adviser

Dechert LLP on

Key Takeaways - Sixth Circuit Court of Appeals reaffirms that comparison of advisory fees to subadvisory fees is “inapt” under Jones v. Harris Assocs., relying on undisputed evidence of differences in services and risks. ...more

Vedder Price

Court Dismisses Plaintiffs’ Excessive Fee Claim against Mutual Fund Adviser following Trial

Vedder Price on

On September 27, 2019, following a two-week bench trial, the U.S. District Court for the Southern District of New York dismissed an action brought by mutual fund shareholders under Section 36(b) of the Investment Company Act...more

Dechert LLP

Recent Section 36(b) Post-Trial Ruling Awards Complete Victory to Mutual Fund Investment Adviser

Dechert LLP on

The U.S. District Court for the Southern District of New York issued a comprehensive post-trial ruling on September 30, 2019 in Chill v. Calamos Advisors LLC, holding that Plaintiffs failed to meet their burden to show that...more

Skadden, Arps, Slate, Meagher & Flom LLP

Investment Management Update - September 2019

In this issue, we summarize regulatory, litigation and industry developments from May to September 2019 impacting the investment management sector, including SEC action on standards of conduct for broker-dealers and...more

Vedder Price

Investment Services Regulatory Update - August 2019

Vedder Price on

Litigation and Enforcement Actions and Initiatives – SECTION 36(b) LITIGATION – Court Finds for Defendant Investment Adviser in Section 36(b) - Excessive-Fee Case – On August 5, 2019, the U.S. District Court for the...more

Skadden, Arps, Slate, Meagher & Flom LLP

SDNY Rules in Favor of Mutual Fund Adviser, Dismisses Excessive Fee Claim

In an opinion unsealed on July 3, 2019, Judge Laura Taylor Swain of the U.S. District Court for the Southern District of New York granted summary judgment to a mutual fund adviser and dismissed an excessive fee claim brought...more

Goodwin

Another Court Grants Summary Judgment to Adviser In Section 36(B) Mutual Fund Excessive Fee Lawsuit Brought Under Subadvisory Fee...

Goodwin on

In a newly unsealed decision, the federal district court in Manhattan granted summary judgment in favor of a mutual fund’s investment adviser in a lawsuit filed pursuant to Section 36(b) of the Investment Company Act of 1940....more

K&L Gates LLP

Court Grants Summary Judgment to Defendant Investment Adviser in Section 36(b) Excessive Fee Lawsuit

K&L Gates LLP on

In a strong opinion, a federal court in the Southern District of New York recently dismissed a suit alleging that the defendant charged “excessive” fees to a mutual fund....more

Skadden, Arps, Slate, Meagher & Flom LLP

Investment Management Update - June 2019

In the inaugural issue of Investment Management Update, we summarize regulatory, litigation and industry developments from February 2019 to May 2019 impacting the investment management sector....more

Faegre Drinker Biddle & Reath LLP

Best Practices for Plan Sponsors #9

Best Practices: Lessons Learned from Litigation (#2)—the Vanderbilt Case - I am writing two series of articles that together are called “The Bests.” One is about Best Practices for Plan Sponsors, while the other is about...more

Faegre Drinker Biddle & Reath LLP

Best Practices for Plan Sponsors #8

Best Practices: Lessons Learned from Litigation—the Anthem Case - I am writing two series of articles that together are called “The Bests.” One is about Best Practices for Plan Sponsors, while the other is about the Best...more

Vedder Price

Investment Services Regulatory Update - March 2019

Vedder Price on

New Rules, Proposed Rules, Guidance and Alerts - NEW RULES - SEC Adopts Interim Final Rule Amending Timing Requirements for Filing Reports on Form N-PORT - On February 27, 2019, the SEC adopted an interim final rule...more

Goodwin

Second Circuit Affirms Pre-Discovery Dismissal of Section 36(b) Subadvisory Fee Comparison Complaint

Goodwin on

On March 18, 2019, the U.S. Court of Appeals for the Second Circuit affirmed the dismissal prior to discovery of a complaint filed under Section 36(b) of the Investment Company Act of 1940. The Second Circuit’s decision is...more

Ary Rosenbaum - The Rosenbaum Law Firm P.C.

DOL probing Fidelity

According to an article in the Wall Street Journal, the Department of Labor (DOL), is looking at an obscure and confidential “infrastructure” fee that Fidelity charges the mutual fund companies for putting their funds on its...more

Skadden, Arps, Slate, Meagher & Flom LLP

Court Rules in BlackRock’s Favor in Excessive Fee Trial, One of Largest Mutual Fund Cases Ever

Following an eight-day bench trial, Judge Freda L. Wolfson of the U.S. District Court for the District of New Jersey ruled in favor of certain subsidiaries of BlackRock, Inc. on $1.55 billion in claims brought under Section...more

Dechert LLP

SEC Proposes Changes to Regulatory Framework of Fund of Funds Arrangements and Requests Comments on Potential Changes to AFFE...

Dechert LLP on

The Securities and Exchange Commission voted on December 19, 2018 to propose Rule 12d1-4 (proposed rule) and related amendments to the regulatory framework governing funds that invest in other funds (“fund of funds”...more

Vedder Price

Investment Services Regulatory Update - December 2018

Vedder Price on

New Rules, Proposed Rules, Guidance and Alerts – NEW RULES – SEC Adopts New Rules Permitting Covered Investment Fund Research Reports – On November 30, 2018, the SEC adopted Rule 139b under the Securities Act of...more

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