Abstract
On 30 March 2010 the Supreme Court decided Jones v. Harris Associates L.P. It has unanimously remanded the case to the lower court with directions concerning mutual fund advisers’ fees. The Court rejected the lower court's holding that shareholders should do their due diligence. It held that the funds’ boards of directors should negotiate the advisory fees, pursuant to Section 36(b) of the Investment Company Act, and should collect the information necessary to do so, following a 30-year precedent of the Gartenberg case. The Supreme Court suggested a somewhat broader inquiry by the board of directors. The fees must be the result of negotiation between the board and adviser.
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