Fund Directions - Judge Blasts American Funds Directors

Judge Blasts American Funds Directors

A federal district court judge has found in favor of Capital Research and Management Company in an excessive fees lawsuit brought by investors in eight of the 30 American Funds, which CRMC advises. In his preliminary decision, the aptly named Federal District Court Judge Gary Feess specifically called out the board involved in the case, but ultimately said the "legitimate concerns" raised by the plaintiffs' side did not rise to the high level of proof required by the Gartenberg Standard. What to do with that standard, used to adjudicate almost all fund fee cases, is a subject the Supreme Court is weighing right now in the case of Jones v. Harris Associates.

The lawsuit in this case alleged that the 12b-1 fees, advisory fees and distributions fees were all excessive. Feess, in his statement of intended ...

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Judge Blasts American Funds Directors