Publication Details

Hoguet Newman Regal & Kenney, LLP Wins Dismissal On Behalf of Mutual Fund Directors

On March 9, 2012, Justice Charles Ramos granted Hoguet Newman Regal & Kenney’s motion to dismiss charges brought against two former independent directors of a mutual fund.  In 2006, upon news that the principals of the fund’s investment advisor had been indicted for securities fraud and other offenses, the firm’s clients presided over the transition of the fund to a new investment advisor, and its merger and reorganization into a new family of funds.  The court’s opinion, which granted the independent directors’ and the new fund’s respective motions to dismiss, and denied plaintiffs’ cross-motion for a default judgment, provides a useful overview of the legal relationships between the directors of a mutual fund, its financial advisor and the fund’s shareholders, as provided under the Investment Company Act of 1940 and the common law.  John Kenney, Julia Peck, Kathleen Lowden, and Jules Cattie worked on the matter.