On October 16, 2015, a shareholder in the Metropolitan West Total Return Bond Fund filed a lawsuit in U.S. District Court for the Central District of California against Metropolitan West Asset Management for excessive advisory fees.
The complaint alleges that Metropolitan West charges a significantly higher advisory fee to this captive mutual fund than it charges for subadvisory services to unaffiliated mutual funds. As examples, the complaint cites three unaffiliated funds that were charged between $22 million and $80 million for subadvisory services during the same year the Total Return Bond Fund was charged $140 million in advisory fees.
On December 18, 2015, Metropolitan West filed a motion to dismiss the case. The plaintiff responded in February 2016. The Court issued a tentative order on April 25, 2016, denying the defendant's motion to dismiss. After supplemental filings, the Court confirmed its decision to deny the motion to dismiss on June 16, 2016.