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.


Return to Archive



If the regulators are after you, and are trying to make a case against you, and you are going to contest their allegations against you, make sure you have the best securities industry defense lawyers, Eccleston Law Firm. My case was spun into a combination of penalties including fines, cash settlements, CE courses and suspension. They were the best I have seen in action. When all was said and done, they had done their magic, my situation was negotiated and settled with a simple "letter of caution" and a case closed without action. It is the most important legal business decision you will ever make, make it Eccleston Law.

Rick R.


August 16, 2022
SEC Warns Financial Advisory Firms Regarding Conflicts of Interest Tied to Compensation

The Securities and Exchange Commission (SEC) has sent a warning to financial advisory firms that they must go above and beyond solely disclosing conflicts of interest related to employee pay programs in order to avoid regulatory scrutiny. 

August 15, 2022
FINRA Proposal Would Permit Private Homes to Serve as Non-Branch Offices

The Financial Industry Regulatory Authority (FINRA) has filed proposed changes to FINRA Rule 3110 with the Securities and Exchange Commission (SEC).

August 12, 2022
SEC Charges J.P. Morgan, UBS, and TradeStation for Deficiencies Pertaining to the Prevention of Customer Identify Theft

The Securities and Exchange Commission (SEC) has charged J.P. Morgan Securities, UBS Financial Services, and TradeStation Securities over deficiencies in their programs designed to prevent client identify theft, which violates the SEC’s Identity Theft Red Flags Rule, or Regulation S-ID.