Several shareholders filed a federal lawsuit on October 30, 2015, alleging that Prudential Investments is charging excessive advisory fees for six of its captive mutual funds. The lawsuit was filed in U.S. District Court in Maryland.
The complaint states that, in the past year, Prudential has charged its shareholders more than $201 million in fees for advisory services to these six mutual funds. Prudential then delegated investment advisory services to several sub-advisers, paying them about 50% ($98.7 million) of what it is charging for nearly identical services to these funds.
Prudential filed a motion to dismiss the case on January 27, 2016. The plaintiffs filed a response on April 20. The District Court denied the motion to dismiss on August 23, 2016.