Partner Dom Pugliese was quoted on a shareholder’s suit of two Western Asset Management Co. (Wamco) closed-end funds for allegedly charging and collecting excessive fees. This suit is similar to nearly two dozen other suits filed in recent years that make claims under Section 36(b) of the Investment Company Act of 1940.
Previous suits, however, focused on open-end funds. Dom thinks this suit could be driven by the shareholder’s desire for the fund’s board to open-end the funds.
“This seems to be a shareholder who has been trying for a number of years to force the board to open-end the funds without success and has become frustrated,” he said. “[I]t appears that he’s trying to use 36(b) as a means to exert pressure on the board to open-end the funds.”
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