A federal court decision last week concerning mutual-fund fees could raise the stakes for investors and fund companies over standards of fairness. The Wall Street Journal reports a federal court ruling that backed investors in a lawsuit over mutual-fund fees may be a sign that the measure of how funds set such fees could be reassessed, after nearly 30 years of industry victories against investors.
Shareholders of 11 RiverSource funds sued parent Ameriprise, arguing it had breached its fiduciary duty by charging higher fees on mutual funds than for similar institutional accounts. The ruling by the Eighth U.S. Circuit Court of Appeals in the case of Gallus et al. v. Ameriprise Financial Inc. overturned a lower court’s judgment in favor of the fund firm.
The decision comes on the heels of a U.S. Supreme Court decision to hear a similar case.