On September 29, 2010, in the Computer Associates International Derivative Litigation, Judge Thomas C. Platt of the U.S. District Court for the Eastern District of New York granted a motion to dismiss derivative claims asserted against Ernst & Young LLP ("E&Y") and KPMG LLP ("KMPG"), the former and current auditors of Computer Associates ("CA").
The United States Court of Appeals for the Second Circuit has ruled that the “insured vs. insured” exclusion in a Directors and Officers (“D&O”) liability policy is ambiguous in a case brought by the legacy entity’s directors and officers against representatives of a newly formed corporate entity.
A two-judge panel of the U.S. Court of Appeals for the Second Circuit (the “Court”) on February 16, 2010 vacated the dismissal of a putative class action securities fraud claim brought by shareholders of the Smith Barney family of funds (the “Funds”) under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and remanded the case to the district court.
On March 30, 2010, the Supreme Court unanimously reversed and remanded the Seventh Circuit's denial of an appeal of summary judgment by plaintiffs alleging that a mutual fund's investment adviser charged excessive advisory fees.
On April 8, 2009, in Gallus v. Ameriprise Financial, Inc., the U.S. Court of Appeals for the Eighth Circuit weighed in on the ongoing debate regarding the evaluation of advisory fees and the corresponding fiduciary duty set forth in Section 36(b) of the 1940 Act and, in doing so, added yet another wrinkle to a debate which has worked its way up to the U.S. Supreme Court.
The U.S. Court of Appeals for the Eighth Circuit is the latest court to establish a standard for evaluating excessive fee claims under Section 36(b) of the Investment Company Act of 1940, a standard that focuses on the adviser's conduct during the negotiation process and the end result.