9/12/2023 0 Comments Donald j faehner paine webber![]() It also alleges that Paine Webber has received compensation for its distribution services and that it is a violation of the 1940 Act for the Fund to bear such distribution expenses. §§ 24, 378(a) ("Glass-Steagal Act"), for PIMC, as the wholly-owned subsidiary of a national bank, to provide advisory services to an open-end fund.įinally, Count IV realleges the receipt of excessive fees by Paine Webber in violation of Sections 1(b) (2), 15(b), 36(a) and 36(b) of the 1940 Act. The plaintiff alleges in Count III that it is unlawful under Sections 16 and 21 of the Banking Act of 1933, 12 U.S.C. § 78n(a) ("the Exchange Act"), Rule 14(a)-9 adopted thereunder, 17 C.F.R. §§ 80a-1(b) (2), 15(a), 15(b), 35(a) and 46.Ĭount II also alleges that, by failing to disclose in the Fund's June 13, 1979, proxy statement the alleged fact that PIMC was receiving investment advisory fees without performing services for the Fund, all of the defendants violated Section 14(a) of the Securities Exchange Act of 1934, 15 U.S.C. Ĭount II alleges that the annual approval and renewal of the Agreements by all the defendants constitutes a breach of fiduciary duty in violation of the common law and of Sections 1(b) (2), 15(a), 15(b), 36(a) and 47 of the 1940 Act, 15 U.S.C. Plaintiff alleges in Count I of the amended complaint that Paine Webber and PIMC have made excessive profits from the Agreements in violation of Section 36(b) of the Investment Company Act of 1940, 15 U.S.C. The principal claim is that the Fund has paid excessive compensation pursuant to its Administration, Advisory and Distribution Agreement ("Distribution Agreement") with defendant Paine Webber and pursuant to its Investment Advisory Contract ("Advisory Agreement") with defendant PIMC ("the Agreements"). Because it is this amended complaint which is attacked here, its allegations are set forth below in some detail. This court adopted the magistrate's ruling, but permitted the plaintiff to file an amended complaint, which she did on January 27, 1982. Without reaching any of the defendants' other arguments, Magistrate Smith ruled on October 16, 1981, that the complaint should be dismissed for failure of the plaintiff to make demand on the directors or to allege with particularity the reasons for not doing so. Common to each motion was the argument that this action should be dismissed under Rule 23.1 of the Federal Rules of Civil Procedure because plaintiff did not make the required demand on the directors *432 of the Fund before filing her suit. In late 1980, each of the defendants moved to dismiss the complaint on various grounds. Murray, who are also directors of the Fund but are not affiliated with Paine Webber ("the independent directors"). Marron and John Curley, Jr., directors of the Fund who are affiliated with Paine Webber ("the affiliated directors") and Provident Institutional Management Corporation ("PIMC"), which at one time served as the Fund's investment adviser ĭonald B. ("Paine Webber"), the organizer, sponsor, and underwriter of the Fund ("the Fund"), a no-load diversified, open-end investment company, commonly known as a money market fund Landy, a shareholder in the defendant money market fund, on May 20, 1980, against the following defendants: For the reasons stated below, the magistrate's ruling is reversed in part and adopted in part. Smith denied these motions, and his ruling is now before this court for review. The defendants have moved to dismiss the action. The plaintiff seeks damages and injunctive relief for this alleged misfeasance under a spectrum of federal statutes and common law. Meyer Eisenberg, Joseph Zuckerman, Marc Rowin, of Rosenman, Colin, Freund, Lewis & Cohen, New York City, for defendant Paine Webber Cashfund, Inc.Īt the heart of this shareholder derivative suit is an allegation that a money market fund paid excessive fees to its investment advisers. vom Eigen, Keith Vandivort, of Dechert Price & Rhoads, Washington, D.C., for defendants George W. Moore, of Ballard, Spahr, Andrews & Ingersoll, Philadelphia, Pa., for defendant Provident Institutional Management Corp. Miller, Jonathan Eisenberg, of Kirkpatrick, Lockhart, Hill, Christopher & Phillips, Washington, D.C., for defendants Paine, Webber, Jackson & Curtis, Inc., Donald B. Krasner, of Wolf Haldenstein Adler Freeman & Herz, New York City, for plaintiff. Stull, of Stull, Stull & Brody, and Daniel W. Provident Institutional Management Corporation Donald B. ![]() Fannie TARLOV, as Executrix of the Estate of Marjorie Landy, Plaintiff,
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