Obeslo, et al. v. Great-West Capital Management, et al.
Analysis Group was retained on behalf of the mutual fund advisor Great-West Capital Management, the defendant in a class action lawsuit brought by shareholders of its funds. The plaintiffs, who acquired Great-West shares via employer-sponsored retirement plans, alleged that both the advisory and the administrative fees charged by Great-West were excessive and could not have been the product of arm’s-length bargaining, in violation of Section 36(b) of the Investment Company Act of 1940 (ICA).
An Analysis Group team led by Managing Principals Michael Beauregard and D. Lee Heavner – including Vice Presidents Hristina Bojadzieva Bartlett, Rebeccah Filsoof, Eileen Lu, and Eric Nguyen – supported three affiliates: R. Glenn Hubbard and Arthur Laby, both of whom filed expert reports and testified at deposition and trial, and Steven Gissiner, who filed an expert report and testified at deposition. Professor Hubbard opined on the reasonableness of the at-issue mutual fund fees relative to the value of the services provided. Professor Laby opined on the reasonableness of the process that the funds’ directors utilized in approving the agreements between the funds and Great-West Capital Management. Mr. Gissiner opined on industry practices of using revenue sharing to pay for retirement plan recordkeeping services.
Judge Christine Arguello of the US District Court for the District of Colorado ruled in favor of our client, Great-West Capital Management, on all counts, holding that the plaintiffs had failed to demonstrate that Great-West had breached its fiduciary duties under Section 36(b). The judge noted that Dr. Hubbard “credibly testified” and quoted Professor Laby extensively in the ruling. The ruling was affirmed on appeal.