Regulatory agencies are created to act in the public interest but often end up acting in the interests of those regulated. This is known as regulatory capture. The mutual fund industry is the custodian of massive levels of wealth of the investing public and is regulated by the Securities...

Mutual funds are structurally different from other corporations. The corporation or trust is controlled by an external entity, an investment management firm that profits from fees charged to manage the fund's portfolio. Recognizing this fundamental conflict of interest, in 1970 Congress made...

In the 1960s, the Securities and Exchange Commission (SEC) attempted to correct an oversight in the Investment Company Act of 1940 (ICA) that allowed investment management firms to overcharge investors, namely, the absence of enforceable protections over excessive fees. Congress, in the 1970...

Households in the U.S. invest a large proportion of wealth in mutual funds. At the end of 2014, open-end mutual fund assets were $16 trillion and annual fees exceeded $100 billion. Mutual funds have a unique corporate structure that involves a conflict of interest with the investment management...

The paper surveys three important mutual fund advisory fee cases that defined the 36(b)-litigation landscape between Gartenberg v. Merrill Lynch and Jones v. Harris. It also provides a simple and clear example of economies of scale in the mutual fund advisory function and discusses how an...