Revenue Sharing

In re American Mutual Funds Fee Litigation, 2005 WL 3989803 (C.D. Cal. 2005)
We represent Capital Research in a class and derivative action asserting claims under the 1940 Act, the Investment Advisers Act, and state law based on allegations that it made undisclosed and improper payments to unaffiliated broker-dealers to promote the sale of American mutual funds. We successfully argued a motion to dismiss all of plaintiffs’ claims. Plaintiffs then filed an amended complaint asserting claims under Section 36(b) of the 1940 Act and the Sherman Act based on essentially the same allegations. Plaintiffs voluntarily dismissed their claim under the Sherman Act, and our motion to dismiss the Section 36(b) claim is pending.

In re Dreyfus Mutual Funds Fee Litigation, 2006 WL 909434 (W.D. Pa. 2006)
We represented Dreyfus in a class and derivative action asserting claims under the 1940 Act, the Investment Advisers Act, and state law based on allegations that it entered into improper revenue sharing agreements with broker-dealers to promote the sale of its mutual funds. We obtained dismissal of all of plaintiffs’ claims on motions to dismiss and for judgment on the pleadings.

Gilliam v. Fidelity Management & Research Co., No. 04-11600 (D. Mass. 2006)
We represented Fidelity in an action asserting claims under the 1940 Act, the Investment Advisers Act, and state law based on allegations that it made undisclosed and improper payments to unaffiliated broker-dealers to promote the sale of Fidelity mutual funds.  After plaintiffs voluntarily dismissed their claims under the Investment Advisers Act and state law, the court granted our motion to dismiss the 1940 Act claims.  Plaintiffs, however, chose not to do so and dismissed the action with prejudice.

In re Salomon Smith Barney Mutual Fund Fees Litigation, 441 F. Supp. 2d 579
(S.D.N.Y. 2006)
We represent Citigroup Asset Management and related defendants in a class action involving claims under the 1933 Act, the 1934 Act, the 1940 Act, and state law based on an alleged scheme consisting of three components: (1) SSB offered undisclosed incentives to brokers and financial advisers to steer investors into SSB’s funds and other funds with which SSB had undisclosed kickback arrangements; (2) SSB extracted improper fees from investors in its proprietary funds; and (3) SSB caused its proprietary funds to invest in poorly performing companies because of their status as SSB investment banking clients. We successfully argued a motion to dismiss all of plaintiffs’ claims, although the court granted leave for plaintiffs to replead their claim under Section 36(b) of the 1940 Act as a derivative action.