Securities Law | Expert Legal Commentary
July 16, 2008
Jones v. Harris Associates: The Market (Not the Courts) Should Set Fund Advisor Fees
Jerry N. Jones v. Harris Associates, L.P.
By
Joel B. Ginsberg
Jerry N. Jones v. Harris Associates, 527 F.3d 627 (7th Cir. 2008), was one of about a dozen cases brought in 2003 and early 2004 based on the “excessive fee” provisions of the Investment Company Act of 1940. In the case, a group of individual investors claimed that Harris Associates, manager of the Oakmark funds, charged excessive fees to individual investors in violation of the Act. The Seventh Circuit Court of Appeals affirmed the lower court’s judgment dismissing the claims against Harris Associates, holding that the market, not the judiciary, should determine manager fees. The mutual fund industry celebrates the decision, which will likely make it harder for investors to challenge funds’ investment-advisory fees as excessive.
To continue reading this article, subscribe now
It's FREE and only takes seconds
