BOSTON (Reuters) - The mutual fund industry heaved a collective sigh of relief on Tuesday after a ruling by the Supreme Court that reduces the ability of investors to sue over fees they think are unfair.
Experts claimed victory for the industry, but true to its somewhat guarded reputation, the public cheering was measured and the cheerleading done mainly by one man -- Paul Stevens.
Since 2004, Stevens, a lawyer who has argued before the Supreme Court, has been the mutual fund industry’s face in Washington as president of the lobbying group Investment Company Institute.
Tuesday’s ruling “not only reaffirms the body of jurisprudence for the companies, but it provides them some certainty going forward,” Stevens said in an interview after reading the 17-page ruling line by line.
Other industry executives declined to comment on the decision.
For years, the mutual fund industry has been instrumental in helping Americans save for retirement and college tuition, while collecting roughly $90 billion in annual fees.
As the case, Jones v. Harris Associates, made its way through the judicial system and ultimately to the Supreme Court, Stevens made it a focus of the ICI.
The group feared that a ruling in the plaintiffs' favor could open the door to more lawsuits against various member firms, including Legg Mason LM.N, T Rowe PriceTROW.O and American Funds parent Capital Group Cos.
Most importantly, Stevens said, the ruling removes the uncertainty that industry titans had faced if the case led to new rules.
After a nervous morning monitoring the Supreme Court’s website, Stevens said it was a dramatic moment when he realized the court had ruled 9-0 in his group’s favor.
“The fact there was absolute unanimity on the standards was significant,” Stevens said.
The Supreme Court heard arguments in the case on Nov 2, 2009. ICI filed a friend-of-the-court brief in support of Harris Associates in September 2009.
Reporting by Ross Kerber
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