A judge in Minnesota has junked a fee suit brought against Ameriprise subsidiary RiverSource Investments
In the case of Gallus v. American Express Financial Corporation
, Judge Donovan Frank of the United States District Court for the District of Minnesota, applied a precedent from the 1982 case. In the Gartenberg v. Merrill Lynch Asset Management
case, the court upheld that in order to violate Section 36(b) of the Investment Company Act, an "advisor-manager must charge a fee that is so disproportionately large that it bear no relationship to the services rendered and could not have been the product of arm's-length bargaining."
In his decision on the RiverSource suit on July 6, Donovan wrote that the plaintiffs "have not established a genuine issue of material fact" regarding whether the 12b-1 fee was disproportionate to the services provided.
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