Appeals court backs two Great-West entities in excessive-fees lawsuit pionline.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from pionline.com Daily Mail and Mail on Sunday newspapers.
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Great-West Life & Annuity Insurance Co. and Great-West Capital Management, LLC (together, “Great-West”) have won a judgment that they did not violate their fiduciary duty by receiving excessive investment advisory and administrative fees from Great-West-sponsored funds.
The U.S. District Court in Colorado concluded, after a trial, that fund shareholder plaintiffs failed to prove, under Section 36(b) of the Investment Company Act, that:
the fees were so disproportionately large that they bore no reasonable relationship to the services rendered and could not have been the product of arm’s length bargaining; and
Seventh Circuit Vacates and Remands Class Certification in Securities Fraud Action
Carpenters Pension Tr. Fund for N. Cal. v. Allstate Co., No. 19-1830 (7th Cir. July 16, 2020)
In a securities fraud case against Allstate Corporation, the Seventh Circuit vacated certification of a plaintiff class for legal error and remanded the case for further consideration.
In early 2013, Allstate announced it would be “softening” underwriting standards for its auto insurance business in an effort to attract new customers and increase profitability, but it acknowledged the softer standards held the risk of increasing auto claims frequency. The company’s CEO said the company would monitor claims frequency and adjust business practices as necessary. Two years later, Allstate announced that the growth strategy had indeed increased claims frequency and that it would be retightening underwriting standards. Its stock immediately dropped by more than 10 percent.