Chill v. Calamos Advisors LLC



In February 2015, two shareholders in the Calamos Growth Fund filed a lawsuit in U.S. District Court of the Southern District of New York against Calamos Advisors LLC and its affiliated distributor. The complaint alleges that Calamos has breached its fiduciary duties under Section 36(b) of the Investment Company Act by charging this captive Fund a higher investment advisory fee than it charges its third-party institutional clients.

 

By way of example, the plaintiff's complaint compares the investment advisory fee for the Calamos Growth Fund at 0.83% of assets under management with the average institutional advisory fee of 0.60-0.65% of assets under management. This difference results in millions of dollars of excess fees being charged for identical and substantially similar services being provided.

 

The plaintiffs also allege excessive 12b-1 distribution fees.

 

After pleadings were filed by both sides, the District Court denied a motion to dismiss by Calamos on March 28, 2016.  Discovery then commenced.  On April 10, 2017, the plaintiffs agreed to dismiss their 12b-1 claims against Calamos.  The advisory fee claims remain in the lawsuit.

In February 2015, two shareholders in the Calamos Growth Fund filed a lawsuit in U.S. District Court of the Southern District of New York against Calamos Advisors LLC and its affiliated distributor. The complaint alleges that Calamos has breached its fiduciary duties under Section 36(b) of the Investment Company Act by charging this captive Fund a higher investment advisory fee than it charges its third-party institutional clients.

 

By way of example, the plaintiff's complaint compares the investment advisory fee for the Calamos Growth Fund at 0.83% of assets under management with the average institutional advisory fee of 0.60-0.65% of assets under management. This difference results in millions of dollars of excess fees being charged for identical and substantially similar services being provided.

 

The plaintiffs also allege excessive 12b-1 distribution fees.

 

After pleadings were filed by both sides, the District Court denied a motion to dismiss by Calamos on March 28, 2016.  Discovery then commenced.  On April 10, 2017, the plaintiffs agreed to dismiss their 12b-1 claims against Calamos.  The advisory fee claims remain in the lawsuit.

Document Title: 
Plaintiffs Stipulation of Dismissal - 12b-1 Claims
Document Desc: 
On April 10, 2017, the plaintiffs voluntarily agreed to dismiss their claims of excessive 12b-1 distribution fees.
Document Title: 
Court Denies Calamos Motion to Dismiss
Document Desc: 
On March 28, 2016, the District Court denied the motion to dismiss filed by Calamos.
Document Title: 
Shareholders File Excessive Fee Complaint Against Calamos Advisors
Document Desc: 
On February 11, 2015, two shareholders of the Calamos Growth Fund filed a complaint against Calmos Advisors LLC. The complaint alleges that Calamos breached its fiduciary duties by charging higher investment advisory fees to this "captive" Fund than it charges its third-party institutional clients in "arm's length" transactions.