Jones May Be New Standard In Adviser Fee Rulings

Law360, New York (June 3, 2008, 12:00 AM EDT) -- For more than 25 years, the “Gartenberg factors” have served as the prevailing standard for a court to determine whether investment adviser fees are excessive under Section 36(b) of the Investment Company Act of 1940.

Taken from the Second Circuit decision in Gartenberg v. Merrill Lynch Asset Mgmt., 694 F.2d 923 (2d Cir. 1982), the multi-factor test has been routinely applied by courts across the country to determine the reasonableness of such fees.

On May 19, 2008, in a departure from Gartenberg, Chief Judge Easterbrook of...
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