Supreme Court to Decide Whether Law Bars Excessive Mutual Fund Fees
The U.S. Supreme Court has agreed to decide whether a federal law bars mutual fund advisers from charging excessive fees if there was no attempt to mislead.
The suit by owners of Oakmark mutual funds claims investment advisers Harris Associates violated the federal Investment Company Act by charging excessive fees, the Associated Press reports.
The law authorizes shareholder actions for breach of fiduciary duty with respect to compensation for services, and says approval of a fee by a fund’s board of directors is not conclusive, according to the petition for certiorari (PDF posted by SCOTUSblog).
Lower courts in the case, Jones v. Harris Associates, have ruled the law requires proof that investment advisers misled fund directors who approved the fee.
The mutual fund industry is closely following the case, Reuters reports.
