The State Of Section 36(b) Litigation

Law360, New York (June 1, 2009, 12:00 AM EDT) -- In its long-awaited decision in Gallus v. Ameriprise Financial Inc.,[1] the U.S. Court of Appeals for the Eighth Circuit adhered to the established standard for claims for breach of fiduciary duty under Section 36(b) of the Investment Company Act of 1940 set in Gartenberg v. Merrill Lynch Asset Mgmt. Inc.,[2] but with important departures that could encourage more investor litigation pursuant to that often-tried but never successful cause of action.

Whether it does encourage more Section 36(b) litigation, however, is likely to turn on the outcome...
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