The latest excessive fee case has ended with a win for the fund company and a loss for plaintiffs.

Key Takeaways

Among the key takeaways from the court’s decision are the following:

  • The court rejected the plaintiffs’ assertion that it was constrained to review only the services provided by AXA Equitable Life Insurance Company (AXA) pursuant to the explicit terms of the contracts between AXA and the funds. Instead it found that it was more appropriate to review the totality of the advisory and administrative services actually provided by AXA. The court concluded “the duties performed by FMG are far more extensive than plaintiffs’ contention that FMG delegated all of its work” to sub-advisers.
  • The court rejected the plaintiffs’ contention that treating the fees paid to sub-advisers and sub-administrators as expenses to the adviser for purposes of calculating the adviser’s profitability in managing the funds was improper.

We will provide further analysis of the district court’s ruling in a separate news release.


After listening to 25 days of testimony earlier this year in an excessive fee case against AXA, a federal judge in New Jersey dismissed the case whole cloth. The U.S. District Judge Peter Sheridan found plaintiffs’ attorneys failed at every aspect in proving a breach of Section 36(b), which prohibits excessive investment advisory fees.