The mutual fund industry should expect to see fewer lawsuits based on excessive fees and more based on issues of disclosure, legal experts said Tuesday during a panel discussion at the Investment Company Institutes Mutual Funds and Investment Management Conference in Palm Desert, Calif.
The reason for the shift has to do with the fact that plaintiffs attorneys havent had much luck bringing excessive fee cases, experts said.
It is unclear, however, if they will have any better luck with cases that center on disclosure.
For example, there has been a spate of lawsuits brought in the wake of the credit crisis alleging that certain fixed-income funds didnt adequately disclose the risk of certain investments, said Charles Etherington, general counsel for Kansas City, Mo.-based American Century Investments.
Although skeptical that the lawsuits would succeed, he nevertheless said they are something the fund industry should keep an eye on.
The ICI is based in Washington.
David Hoffman is a reporter at InvestmentNews, a sister publication of Pensions & Investments.