When a Fund is Sued: An Independent Director’s Guide to Fund Litigation - Part 1

July 01, 2010

Prior to the last decade, most litigation against funds (both open-and closed-end) and their advisers and directors 1 involved claims of excessive fees pursuant to § 36(b) under the Investment Company Act of 1940 (ICA) and non-disclosure lawsuits under the Securities Act of 1933 (Securities Act). 2 The collapse of the “dot com” bubble post-2001 left the mutual fund industry under stress, as assets under management for many managers had deflated materially. The aggressive quest for new assets to manage led some managers to adopt or expand marketing practices that became the focus of regulatory inquiries.

Read "When a Fund is Sued: An Independent Director’s Guide to Fund Litigation - Part 1"