U.S. judge says don't cap mutual fund fees-lawyer

NEW YORK, May 20 (Reuters) - A U.S. appeals court judge has ruled that mutual fund fees should not be capped, clearing the way for trustees and market competition to make these decisions, a lawyer who represented a defendant investment advisor said on Tuesday.

Judge Frank Easterbrook of the Seventh Circuit in Chicago said in his decision: "A fiduciary must make full disclosure and play no tricks but is not subject to a cap on compensation. The trustees (and in the end investors, who vote with their feet and dollars), rather than a judge or jury, determine how much advisory services are worth."