From the Editor...

April 15, 2016

By Hillary Jackson

From the Editor...

 

There has been no shortage of news coming out of the courts recently, with two separate rulings clearing the path for excessive fees suits against Calamos Advisors and Hartford Investment Financial Services to proceed. These are just a couple of the roughly two dozen cases alleging violations under Rule 36(b) of the Investment Company Act of 1940 making their way through the legal system.

 

Because there are so many cases in litigation—with each at a different stage in the process—it can get a tad difficult to keep track of what's going on with each and why or when it's necessary to really pay attention. But, mutual fund directors are vulnerable to being deposed in these cases (even while they're not normally named as defendants) and testifying if the case goes to trial. So, there's a lot to be learned from how the current cases are being treated by the courts and playing out in general. In Kasilag v. Hartford Inv. Fin. Serv., LLC, for instance, the judge denied Hartford's request for summary judgment but fiercely defended the board's independence. This is good for boards in general, but not so good for the defendant, of course. We continue to watch legal developments in this space. 

 

In the fund industry, much of the talk of late is about the Department of Labor's final fiduciary rule. While this is not a regulatory initiative that touches fund boards directly, there could be unintended consequences of the new regime that affect how directors do their jobs. There will be plenty of analysis on all aspects of the DoL rule, for sure, and the Investment Company Institute is planning a forum to discuss it on May 10. 

 

Also from FBV in the past two weeks: News of a new independent director on the board of the beleaguered Sequoia Fund, 10 Things...to consider in the 15(c) process, and an Added Perspective on board 'refreshment' penned by a group from Dorsey & Whitney LLP. Catch up on whatever you missed by clicking the headlines below, and let us know if we've missed anything or if there's a topic you'd like us to explore in future stories or lists of 10 Things.

 

For now,

 

Hillary Jackson, founding editor, Fund Board Views