Brokers, broker-dealer executives and fundsters on the broker-sold side of the business can breath a little easier this week. InvestmentNews' Jessica Toonkel reports that on Monday a federal judge in the Southern District of New York tossed Bradley C. Smith v. OppenheimerFunds Distributor, in which the plaintiffs (guided by class action giant Milberg) claimed 12b-1 fees are "special compensation" under the '40 Act, and that the fund firm thus committed a fiduciary breach when paying those fees to brokers (and broker-dealers) who aren't investment advisor representatives (and registered investment advisors).

Dechert's William Dodds served as OppenheimerFunds' [see profile] lead attorney on the case.

Yet the victory is by no means final. The judge, like in Milberg's two similar cases against Eaton Vance and Franklin Templeton (both of which Milberg appealed), tossed the suit over mere standing issues, not over the case's merits. Watch for an appeal, and watch for Milberg to address the standing issues before pleading the case again. 

Edited by: Neil Anderson, Managing Editor


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