Judge Paul A. Crotty of the
In so doing, he dismissed a lawsuit against the investment advisors and distributors to the funds.
“Plaintiffs allege that the ‘performance of these funds was not up to par with other similar funds in the industry,’” the judge ruled. “According to plaintiffs, this failure belies defendants’ argument that their superior quality and performance justifies their high fees. Performance is only one measure, however, and plaintiffs fail to allege anything about the array of services offered to fund customers, such as telephone or Web assistance or the ease with which transactions are effected,” the judge continued. “Instead, they ask the court to extrapolate deficient services from allegedly substandard investment returns.”
The lawsuit, originally filed in 2004, said that the fees charged by the funds’ distributors were disproportionate, given that they had not been negotiated at arm’s length but granted to a transfer agent subsidiary of the then-parent company.
In May 2005,