From the Editor...

The plaintiffs' bar has been very busy in recent years filing lawsuits against mutual fund advisers, lawsuits that many times call into question the fund board's business judgement and decision-making process. Two such cases have moved a little further through the legal system in the past couple of weeks, and one is very near it's end (or not, depending on the next ruling). 

Sivolella v. AXA Equitable Life Insurance Co. is the first excessive fees case alleging violation of Rule 36(b) of the '40 Act to make it to trial, and it's been under way in a Trenton, N.J., courtroom since early January. Testimony ended last week, with the lead independent trustee of AXA's EQ Advisors Trust testifying for the defense. Under direct, Gary Schpero maintained the fees charged by AXA are "fair" and "reasonable." Under cross, he frequently was asked to defend the board's independence and its decisions not to hire consultants to assist with various aspects of its decision making. There was some fascinating testimony during Schpero's two days of testimony, and even more interesting will be U.S. District Court Judge Peter Sheridan's ruling when it comes down—possibly not for as long as 60 days. 

Elsewhere, Northstar Financial Advisors Inc. v. Schwab Investments is headed back to the Ninth Circuit Court of Appeals after U.S. District Court Judge Lucy Koh dismissed the case after finding that the plaintiff's claims were precluded by federal law. Unless the Ninth Circuit reverses that decision (which it is has done before), the case will be over—after eight years. 

Of course, fund boards are working on regular business while watching the goings-on in the legal arena. At Goldman Sachs Asset Management, which has five fund boards overseeing specific product lines, director recruitment efforts are in full swing. The board overseeing GSAM's multi-manager funds has nominated two new independents to grow the board to eight members in total. 

Another area of constant attention in the boardroom is the directors' relationships with compliance personnel. In our latest Viewpoints, Goodwin Procter partner Marco Adelfio spells out ways to ensure those relationships are managed effectively. Please let us know if there's a topic you'd like to read about in Viewpoints, which includes articles written exclusively for FBV by industry professionals, or if you've got a subject you're dying to write about yourself. 

Be sure to also check out our In The Margins and Added Perspective sections, which include, respectively, aggregated news about the fund industry and governance and content on issues that may be of interest to fund directors.

In a little more than a week, we'll begin our coverage from Orlando of the Investment Company Institute's 2016 Mutual Funds and Investment Management Conference. Be sure to check the website (www.fundboardviews.com) and our Twitter feed (@FundBoardViews) for the latest news, and if you're down there, we'd love to say hello face to face. Publisher Dan Lalor and I will be on site throughout the event, and we're looking forward to catching up.

For now,

Hillary Jackson, founding editor, Fund Board Views