Court decisions on who bears the risks inherent in a mutual fund’s operations have become paradoxical. Investment advisers have convinced some federal courts that they bear enormous risks in operating their mutual funds—so much so that they’re justified in charging hundreds of millions of...

Purpose To analyze the August 2016 court decision in Sivolella v. AXA Equitable Life Ins. Co. and its implications for cases concerning mutual fund advisory fees under Section 36(b) of the of the Investment Company Act of 1940. Design/methodology/approach Discusses Section 36(b), the...