Uncertainty Remains over Mutual Fund Derivative Litigation under Massachusetts Law
Securities litigation partner Robert Skinner and associate Daniel McCaughey authored an article for the winter issue of Institutional Investor’s The Journal of Index Investing. “Federal Court Decision Highlights Uncertainty Over Mutual Fund Derivative Litigation Under Massachusetts Law” analyzes recent developments in a common type of shareholder lawsuit under Massachusetts law, known as a “derivative” claim. The article outlines the risks that such claims pose to advisors and trustees of mutual funds, and approaches for defending against the claims.
The authors write, “Because many U.S. mutual funds are organized as Massachusetts business trusts, and shareholder derivative suits are governed by state law, a unique Massachusetts statute – enacted in 2004 and still largely open to interpretation by state and federal courts – raises important considerations for anyone working to minimize or respond to shareholder lawsuits in the mutual fund industry.”
Ropes & Gray has one of the largest and most experienced securities litigation practices in the country. The firm serves as general or special counsel to more than 100 public companies and advises more than 500 mutual funds or fund boards.