On July 24, 2011, a shareholder of several Artisan Funds sued Artisan Partners to rescind certain investment advisory agreements, alleging that they were excessive compensation under Section 36(b) of the Investment Company Act. The Complaint in this case asserted that investment advisory fees for three (3) Artisan Funds were higher than comparable fees Artisan charged to its institutional clients. The plaintiffs also alleged that certain investment advisory fees were higher than the advisory fees charged by other mutual fund complexes.
The defendant responded on August 30, 2011, by filing a Motion to Dismiss the case. The defendant argued that the Complaint fails to state a plausible claim under Section 36(b) that Artisan Partners has breached its fiduciary duty to shareholders, regarding the receipt of compensation for investment advisory services.
On October 19, 2011, the plaintiff filed a brief in opposition to the Motion to Dismiss, arguing that the advisory agreements with Artisan do not carry the "earmarks of an arm's length bargain," the standard confirmed by the Supreme Court in its Jones decision. The plaintiff also argued that at least two other courts have denied motions to dismiss complaints after the Jones decision, with allegations similar to those in this case.
Artisan responded with a reply brief on October 28, 2011, arguing that some of the allegations against Artisan in the Complaint were copied from other complaints in unrelated mutual fund cases.
On August 13, 2012, the plaintiff and the defendant filed a stipulation with the District Court, agreeing that this case should be dimissed with prejudice. The case has now been dismissed.