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Advisory Contracts
Court Refuses to Dismiss Excessive Advisory Fee Case
December 21, 2012
A federal judge recently refused to dismiss a complaint against Hartford Investment Financial Services alleging excessive investment advisory fees under section 36(b) of the Investment Company Act. As Stradley Ronon's John Baker explains: “According to the complaint, the defendant fund adviser pays sub-advisers to… read more
SEC Staff on Combining Advisory and Administrative Agreements
November 20, 2012
The SEC Division of Investment Management staff recently issued guidance on combining separate advisory and administrative agreements into a single “management agreement.” The staff stated that a fund’s board of directors may merge these agreements without a shareholder vote when the nature and level… read more
Morgan Stanley Subadviser Settles SEC Enforcement Action
July 11, 2012
A Morgan Stanley subadviser has agreed to pay $1.6 million to settle SEC charges that it collected more than $1.8 million in fees for services it did not provide. The Malaysian subadviser, AMMB Consultant Sendirian Berhard (AMC), served as a subadviser to the Malaysia… read more
Gallus Fee Litigation Ruling Issued
April 03, 2012
On March 30, 2012, the Eighth Circuit Court of Appeals granted summary judgment in favor of Ameriprise Financial, ending the Gallus litigation. Plaintiffs had alleged in part that Ameriprise breached its fiduciary duty to shareholders because of a flawed fee negotiation, saying that Ameriprise provided… read more
SEC Reviewing Excessive Mutual Fund Fees
November 21, 2011
According to a recent Ignites article, the SEC is currently conducting a number of investigations regarding excessive mutual fund fees. Although the SEC issued a "Cease and Desist" order in a case regarding subadvisory fees on November 16th, it is likely that the SEC… read more