Strike Three: Dismissal of the Third Section 47(b) Lawsuit Brought Against Mutual Fund Trustees and Distributor for the Alleged Failure of Broker-Dealers That Receive Rule 12b-1 Fees to Register as Investment Advisers

June 14, 2011
A federal district court recently dismissed two complaints brought derivatively on behalf of two OppenheimerFunds mutual funds seeking rescission, pursuant to Section 47(b) of the Investment Company Act of 1940, of the funds’ distribution agreements pursuant to which Rule 12b-1 fees are paid. This update examines the decision, which thwarted yet another attempt by the plaintiffs’ bar to alter the mutual fund distribution landscape by holding that plaintiff was not entitled to rescind the funds’ distribution agreements.