An Important Reading Of High Court's Advisory Fee Opinion
Law360, New York (August 28, 2015, 10:56 AM EDT) -- In Jones v. Harris Associates LP, the U.S. Supreme Court adopted the Gartenberg standard for cases brought under Section 36(b) of the Investment Company Act of 1940: "[T]o face liability ... an investment adviser must charge a fee that is so disproportionately large that it bears no reasonable relationship to the services rendered and could not have been the product of arm's length bargaining." The court remanded the case to the Seventh Circuit to apply this standard in the context of an appeal challenging the grant of summary judgment for the defendant investment adviser, Harris Associates LP. (The Supreme Court's opinion was previously discussed here.) On Aug. 6, 2015, more than five years later, the Seventh Circuit affirmed the district court's grant of summary judgment.[1]...
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