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Supreme Court to decide investment adviser fees case

[JURIST] The US Supreme Court [official website; JURIST news archive] granted certiorari [order list, PDF] Monday in Jones v. Harris Associates [docket; cert. petition, PDF], in which the Court will consider whether a shareholder must show that the fund's investment adviser misled the fund's directors in order to have a cognizable claim of an excessive fee under section 36(b) of the Investment Company Act of 1940 [text]. The US Court of Appeals for the Seventh Circuit held [opinion, PDF] that the claim is not cognizable unless the shareholder can show that the adviser misled the fund's directors who approved the fee. The case was brought by several plaintiffs who own shares in funds advised by Harris Associates [corporate website]. The plaintiffs claim that the fees are too high and are in violation of section 36(b).

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