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Supreme Court Rules on When Mutual Fund Fees Are Too High

Doug Cornelius, Chief Compliance Officer The Supreme Court issued its opinion in Jones v. Harris Associates , addressing the standard for when mutual fund fees are too high. Background Under §36(b) of the Investment Company Act of 1940 the "the investment adviser of a registered...

Jones v. Harris Assocs. L. P., 2010 U.S. LEXIS 2926 (March 30, 2010)

LexisNexis Overview: For liability under 15 U.S.C.S. § 80a-35(b), an adviser's fee had to be so disproportionately large that it bore no reasonable relationship to the services rendered and could not have been the product of arm's length bargaining; thus, the Seventh Circuit's rejection...

U.S. Supreme Court Addresses Fiduciary Duty of Investment Advisors

In Jones v. Harris Associates, L.P. , the U.S. Supreme Court last week decided an issue involving the fiduciary duty of investment advisors. Many legal scholars have already started to comment on this decision, e.g. here , here , here and here , adding to the prolific analysis that preceded...

SOX Whistleblower Protections at Mutual Fund Companies

We know that Sarbanes-Oxley offers protections to employees at public companies, but does it also protect employees at mutual fund companies? Yes. At least according to Judge Woodcock of the Massachusetts U.S. District Court. The Employees The decision is for two cases that were combined...

Supreme Court Grants Cert in Another Securities Case

It was possible to overlook it amongst the flurry of high profile opinions the Supreme Court released on the final day of the 2009 court term, but on June 28, 2010 the Court granted yet another petition for writ of certiorari in a case arising under the securities laws. Although the case arises out of...

Oral Argument Heard In Securities Class Action Challenging Primary Liability Of Service Providers

WASHINGTON, D.C. - (Mealey's) The U.S. Supreme Court on Dec. 7 heard oral argument in a securities class action lawsuit challenging whether a service provider can be held liable in a private securities fraud action for helping or participating in another company's misrepresentations in a prospectus...

IRS Gone Rogue? Investigating Policy on RICs’ Commodity-Related Investments

Higher prices at the pump got you down? Recent news stories suggest that commodity speculation may be a significant factor. (See, e.g., "Pump Prices Climb to Record High Level," Los Angeles Times (February 7, 2012)). The Commodity Futures Trading Commission (CFTC) oversees the financial market...

Managing the Risks Posed to Mutual Fund Industry Participants by Increasing Litigation and Regulatory Enforcement Activity

Over the last ten years, the far-reaching examination of the trading practices of the mutual fund industry, numerous enforcement actions by the SEC against prominent broker-dealers and fund complexes, and scores of civil lawsuits resulted in very significant costs to the mutual fund industry. Additionally...

Managing Risks Posed to Mutual Fund Industry Participants by Increasing Litigation and Regulatory Enforcement Activity

Over the last ten years, the far-reaching examination of the trading practices of the mutual fund industry, numerous enforcement actions by the SEC against prominent broker-dealers and fund complexes, and scores of civil lawsuits resulted in very significant costs to the mutual fund industry. Additionally...

Managing the Risks Posed To Mutual Fund Industry Participants By Increasing Litigation And Regulatory Enforcement Activity

Over the last 10 years, the far-reaching examination of the trading practices of the mutual fund industry, numerous enforcement actions by the SEC against prominent broker-dealers and fund complexes, and scores of civil lawsuits resulted in very significant costs to the mutual fund industry. Additionally...

SEC Charges Fund Directors In Its Third Recent Valuation Action

The SEC filed its third asset valuation action in recent weeks. This time the proceeding named as Respondents eight mutual fund directors for failing to properly oversee the valuation of assets in the funds during the market crisis. In the Matter of J. Kenneth Alderman, CPA, Adm. Proc. File No. 3...