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The Future of Gartenberg: A New Approach in Evaluating Investment Adviser Fees

June 02, 2008

By Grace Carter and Katharine Chao

For more than 25 years, the Gartenberg factors have served as the prevailing standard for a court to determine whether investment adviser fees are excessive under Section 36(b) of the Investment Company Act of 1940. On May 19, 2008, in a departure from Gartenberg, Chief Judge Easterbrook of the Seventh Circuit, joined by Judges Kanne and Evans, decided Jones v. Harris Associates L.P.