Federal Court Rejects Claim of Excessive Fees Under Section 36(b) as Supreme Court Examination of Standard for Liability Looms

October 07, 2009
A rare trial involving a claim of excessive advisory fees ended with a defense victory in the matter of In re American Funds Fee Litigation. The case may represent the last substantive decision applying Section 36(b) of the Investment Company Act of 1940 prior to a ruling by the U.S. Supreme Court in Jones v. Harris Associates, which is expected to resolve varying interpretations of the fiduciary duty standard imposed by Section 36(b) on investment company advisers in connection with the receipt of compensation.