Kennis v. Metropolitan West Asset Management



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. 

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. 

Document Title: 
District Court Denies Motion to Dismiss
Document Desc: 
On June 16, 2016, the District Court denied Metropolitan West's motion to dismiss the case.
Document Title: 
Metropolitan West Files Reply Brief
Document Desc: 
Metwest states in its reply brief, filed on March 1, 2016, that "law and logic ... conspire to confirm that the complaint does not state a cognizable claim."
Document Title: 
Plaintiff Files Opposition Brief
Document Desc: 
On February 16, 2016, the plaintiff responded with an opposition brief stating that the defendant is clearly charging advisory fees to the fund that are outside the range of what could be negotiated at arm's length.
Document Title: 
Metropolitan West Files Motion to Dismiss
Document Desc: 
Metropolitan West filed a motion to dismiss the case on December 18, 2015. The adviser alleges that the complaint is "devoid of facts showing that MetWest's advisory fee is outside the range of what could have been bargained at arm's length."
Document Title: 
Shareholder Files Excessive Advisory Fee Complaint Against Metropolitan West Asset Management
Document Desc: 
On October 16, 2015, a shareholder in the Metropolitan West Total Return Bond Fund filed a lawsuit in federal court against Metropolitan West Asset Management for excessive advisory fees.