A shareholder in the Principal Funds initiated a lawsuit against the Funds’ adviser (Principal Management Corporation) and distributor (Principal Funds Distributor). The Complaint seeks to rescind the investment advisory agreements and distribution plans and recover fees charges by the defendants. The Complaint alleges that the defendants breached their fiduciary duty to the shareholders of the Funds by using multiple layers of advisory fees that the plaintiff believes are excessive. The Complaint also alleges that Rule 12b-1 fees for sales and distribution activities are also excessive.
This case was filed in U.S. District Court for the Southern District of Iowa. On June 8, 2010, the Court granted in part and denied in part the defendants’ Motion to Dismiss. The case may proceed on the counts of excessive advisory fees and excessive distribution fees. On October 28, 2011, the plaintiff filed a new complaint with the Court. Motions for Summary Judgment were filed by both parties in February and March of 2013.
In June 2013, the case was settled and a stipulation of dismissal was filed with the Court by the parties. The terms of settlement were not disclosed.