A shareholder with more than $1 million invested in the BlackRock Global Allocation Fund filed a class action complaint against BlackRock in U.S. District Court in New Jersey. This lawsuit asserts that the advisory fee rate charged to the Fund by BlackRock is excessive for the value of the work performed.
The lawsuit also alleges that the subadvisory fees paid to sub-advisers affiliated with BlackRock are excessive in that the overall subadvisory fee is significantly higher than the fees negotiated at arm's length by BlackRock with other clients for the same or substantially similar investment management services.
The plaintiff also claims that the fee arrangements established by BlackRock do not adequately decrease as the Fund grows larger, and resultant cost savings through economies of scale are not being passed onto the Fund and its shareholders.
On May 22, 2014, this case was consolidated with the Clancy, Foote, and Fox subadviser cases into In re BlackRock Mutual Funds Advisory Fee Litigation.