Two shareholders in several J.P. Morgan bond funds filed a lawsuit alleging excessive investment advisory fees by J.P. Morgan. The lawsuit was filed in U.S. District Court for the Southern District of Ohio.
The plaintiffs allege that the investment advisory fees charged to their bond funds are as much as 525% higher than the rates negotiated at arm's length by J.P. Morgan with other clients for the same or substantially similar investment advisory services.
The plaintiffs also claim that J.P. Morgan is not passing along any savings to shareholders as a result of the benefits of the funds' economies of scale.
The plaintiffs seek to recover for their bond funds any excessive fees in violation of the Investment Company Act, as well as any other damages caused by the payment of those fees by the bond funds.
On July 10, 2014, J.P. Morgan filed a motion to dismiss the case. The plaintiffs filed an opposition brief on August 28, 2014, and J.P. Morgan filed its reply brief on September 23, 2014.
On March 4, 2015, the District Court denied the defendants motion to dismiss, stating that the plaintiffs have pled sufficent facts to present a plausible claim that the fees in question are disproportionately large.
The Court consolidated this case with the Campbell Family Trust case on February 18, 2016.