36(b) Mutual Fund Excessive Fee Litigation


The judge granted the defendant’s motion for summary judgment.

Plaintiffs alleged that the advisory fees paid to the defendant were excessive. They claimed that because a majority of the advisor’s duties were delegated to sub-advisors, who received part of the fee paid by the funds, the portion retained by the advisor was excessive under Section 36(b) of the Investment Company Act of 1940.

Defense counsel retained Cornerstone Research and three experts: Russell Wermers of the University of Maryland, Christopher James of the University of Florida, and a mutual fund industry expert, Russell Peppet. Cornerstone Research supported the experts through multiple reports and depositions.

The judge granted the defendant’s motion for summary judgment.

For more information about this case, contact John Simon.

Case Experts

Russell R. Wermers

Bank of America Professor of Finance;
Director, Center for Financial Policy;
Robert H. Smith School of Business;
University of Maryland

Christopher M. James

William H. Dial/SunBank Eminent Scholar in Finance and Economics,
Warrington College of Business Administration,
University of Florida