In Section 1(b) of the Investment Company Act, Congress expressly provides courts with a guide as to how its provisions should be interpreted. Congress lists a series of ways that investors participating in investment companies are adversely affected. It then expressly declares that interpreters of the Investment Company Act should construe its provisions to mitigate—and where possible, eliminate—these adverse effects. This Comment contends that Congress’ explicit statement in Section 1(b) of the Investment Company Act, detailing how the Act should be construed, ought to be a guide in interpreting its provisions, even under a textualist statutory interpretation.
Section 36(b) of the Investment Company Act provides investors with a private cause of action against investment advisers who charge exorbitant fees to investment companies, deeming such actions a breach of the adviser’s fiduciary duty. The Investment Company Act, however, does not expressly define the stringency of the duty a fiduciary owes to the investment company. As a result, recently, the Supreme Court analyzed Section 36(b) of the Act in Jones v. Harris Associates L.P., broadly shaping the role of the judiciary in evaluating the excessiveness of the fees charged by the investment adviser. The standard the Court adopted, however, contains vague, generic language that allows both sides to claim victory in the outcome. The lower courts, therefore, will be left to determine the impact of Jones v. Harris Associates L.P. in subsequent cases. This Comment, with Section 1(b) as its guide, analyzes the Court’s opinion in Jones v. Harris Associates L.P. and provides guidance to the lower courts in the interpretation and application of the Court’s opinion.
Oladotun O. Obadina,
Getting Back to the Purpose: Analyzing Jones v. Harris Associates L.P. in Light of Section 1(b) of the Investment Company Act,
94 Marq. L. Rev. 679
Available at: http://scholarship.law.marquette.edu/mulr/vol94/iss2/5