Should a fund closed to new investors be allowed to continue charging distribution fees? One New York investor doesn't think so. Eduard Korsinksy
, attorney for the unnamed investor, filed a suit claiming that Bjurman, Barry & Associates
charged unreasonable marketing and distribution fees on shares in the Micro-Cap Growth Fund
after it was closed to new investors.
Here's another case that hinges on the ever-elusive definition of "reasonable." According to a report in the Wall Street Journal
, the defendant's lawyer claims that the fees were reasonable because they were just a quarter of the maximum one percent mandated by the SEC. The plaintiff counters that distribution fees went up
after the fund was closed.
Judge Denise Cote
denied a motion to dismiss the case last week. She told the Wall Street Journal
that the plaintiff will have to prove that the fees were "so disproportionately large that they bore no reasonable relationship to the services actually provided and could not have been the product of an arm's length negotiation."
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