Securities Law | Expert Legal Commentary
May 21, 2010
Jones v. Harris: Gartenberg Is the Proper Standard to Assess Whether Advisor Fees Are Excessive
Jones v. Harris Associates
By
Josh Lawler and Joel B. Ginsberg of Zuber & Taillieu LLP
The Supreme Court of the United States has embraced the Gartenberg standard for analyzing claims of excessive fund advisory fees under section 36(b) of the Investment Company Act of 1940. The Court’s unanimous opinion in Jones v. Harris Associates, ___ U.S. _____, 130 S.Ct. 1418 (2010), ended a dispute among Circuit Courts as to the correct standard and conclusively adopted a standard relied upon by courts and the investment industry for more than 25 years. The Court indicated a need to show high deference to the thoughtful and educated decisions of independent mutual fund boards and cautioned the courts against making “inapt comparisons” in assessing excessive fee claims.
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About the Authors
Josh Lawler is a Partner of Zuber & Taillieu LLP, focusing on corporate law and securities and finance law.
Joel B. Ginsberg is an Associate of Zuber & Taillieu LLP, focusing on corporate law, and securities and finance law.
Image Credit: ©iStockphoto.com/elusariot
View a PDF of the judicial opinion