JP Morgan Investment Management Accused of Charging Excessive Mutual Fund Fees

Posted on June 18th, 2014 at 11:21 AM

From the Desk of Jim Eccleston at Eccleston Law Offices:

Fund shareholders claim JP Morgan Investment Management charged excessive fees in its JP Morgan Core Bond Fund, JP Morgan High Yield Fund and the JP Morgan Short Duration Bond Fund. They allege that the fees were as much as 525% higher than the rates negotiated at arm's length by J.P. Morgan with other clients for the same or substantially similar investment advisory services.

By charging higher fees in those funds, JP Morgan received as much as $108 million more in fees from the firm’s own management company. Moreover, higher fees were charged not withstanding the fact that JP Morgan was able to achieve significant economies of scale resulting from the increase in assets under management (AUM) annually. In addition to being charged higher fees, shareholders claim that they did not receive any tangible increase in services. Instead, those fees were used solely to serve as another profit center for JP Morgan Investment.

According to the suit, the advisory fees all were approved annually by the JP Morgan Investment Management’s board of trustees. However, the board allegedly did not devote the time and attention necessary to independently asses the investment advisory fees, did not solicit competitive bidding, and did not seek a "most favored nation" provision, which would have promoted fee parity among the different funds managed and sub-advised by JP Morgan.

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

Tags:

Return to Archive

TESTIMONIALS

Previous
Next

I am so glad I found you! Wow! I appreciate your help, concern and guidance.

RB

LATEST NEWS AND ARTICLES

March 21, 2025
SEC Updates Marketing Rule Guidance to Clarify Extracted Performance and Portfolio Metrics

The Securities and Exchange Commission (SEC) has issued updated guidance on its marketing rule, addressing industry concerns regarding net performance requirements, extracted performance, and portfolio characteristics.

March 20, 2025
Stifel Loses Raiding Case, Ordered to Pay Over $7 Million in Legal Fees

Stifel Financial has lost its raiding and breach-of-contract claim against a group of advisors who left its Indianapolis office to establish their own firm.

March 19, 2025
FINRA Enforcement Actions in 2024: Fines Drop But Cases Increase

The Financial Industry Regulatory Authority (FINRA) imposed $59 million in fines in 2024, reflecting a 35 percent decrease from the previous year, according to an analysis by Eversheds Sutherland.