NEW YORK-Fund companies can anticipate fewer lawsuits from shareholders over what they claim are excessive fees, according to panelists at the Practising Law Institute's "Investment Management Institute 2007" here.

A recent case cemented the shift that started in 2002 that has turned the courts from the patron saints of shareholders to strict adherents to the letter of the law. Although the "excessive fee" provisions of the Securities Act of 1934 does not address shareholders' rights, the courts had, traditionally, considered their right to bring "excessive fee" charges implicit. Scores of shareholders sued fund companies, citing differences in share classes, among competitors and between retail and institutional customers.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.