Investment Management Litigation

annual report

The world’s leading money managers benefit from a potent combination at Ropes & Gray: an integrated investment management practice comprised of counsel well-versed in all facets of the industry and litigators with a track record for winning the biggest cases.

Contact

“They have a very good common-sense approach to applying the law in the context of a business relationship.” Chambers USA
“A great department with great lawyers.” Chambers USA
“This well-established firm houses a top-rated litigation group with a presence on the national stage and the capacity to handle the most complex of disputes.” Chambers USA

Overview

From the boardroom to the courtroom, Ropes & Gray’s leadership in the investment funds arena is well-established. We serve as regular counsel for more than 2,000 mutual funds or their independent directors or trustees, including many of the marquee names in the industry.

In addition, our seasoned litigators—many of whom have served as federal prosecutors or enforcement attorneys—have set the gold standard in defense of the investment management industry. In recent years alone, we have resolved disputes for some of the world’s largest fund complexes in securities class action matters and other complex commercial disputes – including a seminal U.S. Supreme Court case regarding advisor fees.

Comprehensive Capabilities

Armed with an unparalleled depth of knowledge about funds, their structures, investment practices, management and industry regulation, our litigators fashion innovative and aggressive responses to government enforcement efforts and civil litigation claims. We have extensive experience handling the most significant matters facing the fund industry, including subprime-related losses, excessive fee claims, prospectus liability, and activist shareholders. We also frequently advise investment managers in dealings with state and federal regulators.

Industry Recognition

Our success for our clients has won accolades for the firm. Chambers has cited the firm as having the preeminent U.S. investment funds practice twice in four years and U.S. News named Ropes & Gray “Firm of the Year” for investment funds in 2011 and 2012. In addition, two Ropes & Gray securities litigators were named in Mutual Fund Wire’s list of “Most Influential People in the Mutual Fund Industry.”

Industry Leadership

Ropes & Gray combines strengths across disciplines, industry knowledge and legal savvy litigating precedent-setting cases alleging investment mismanagement, breach of fiduciary duty, statutory violations, and other claims by private plaintiffs and government regulators.

Among our recent successes for fund and advisor clients, we handled matters dealing with: 

  • Excessive Fees. Successfully defended the fees of the Oakmark Funds in the U.S. Supreme Court case of Jones v. Harris Associates, which set the standard by which “excessive fee” claims under Section 36(b) of the Investment Company Act are measured, endorsed the primacy of independent fund directors in setting fees, and rebuffed attempts by plaintiffs’ lawyers to encourage increased judicial scrutiny of fees. Defeated similar claims against Ameriprise Financial in the 8th Circuit in the first appellate interpretation of Jones
  • Subprime Mortgage Investments. Defended State Street Global Advisors (SSgA) in multi-district litigation over subprime mortgage-related investments in fixed income funds. The multiple federal actions asserted by investors included breach of fiduciary duty claims by institutional investors, ERISA class actions by multiple plans, and securities class actions alleging misleading mutual fund prospectuses. We also represented SSgA in related investigations by the SEC and other federal and state regulators. 
  • Securities Class Actions. Won dismissal of securities class actions alleging prospectus violations against funds, board members, and investment advisors, including claims against ProShares, the market’s leading provider of leveraged and inverse ETFs.  
  • Closed-End Funds. Defeated attempts by shareholders to seize control of multiple closed-end mutual funds through litigation and proxy fights. 
  • Derivative Claims. Won dismissal of shareholder derivative suits against fund advisors, officers, and board members, and regularly advise independent directors in their handling of derivative demands.
  • Market Timing and Revenue Sharing. Led the industry in representing more funds, boards, and advisors than any firm in investigations by the SEC, NASD/FINRA, the N.Y. Attorney General, the Department of Labor, and other regulators regarding market timing, revenue sharing, and other mutual fund practices. In the related multi-district civil litigation, we argued on behalf of the industry and won dismissal of all derivative cases, thus removing every independent director and trustee from the cases as defendants. 
  • Foreign Corrupt Practices Act. Conducted multi-jurisdictional, FCPA-related internal investigations on behalf of clients, in connection with SEC and Department of Justice investigations. Developed FCPA compliance programs and conducted FCPA reviews for multinational clients.