CURRAN V. PRINCIPAL MANAGEMENT CORPORATION

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A shareholder in the Principal Funds initiated a lawsuit against the Funds’ adviser (Principal Management Corporation) and distributor (Principal Funds Distributor). The Complaint seeks to rescind the investment advisory agreements and distribution plans and recover fees charges by the defendants. The Complaint alleges that the defendants breached their fiduciary duty to the shareholders of the Funds by using multiple layers of advisory fees that the plaintiff believes are excessive. The Complaint also alleges that Rule 12b-1 fees for sales and distribution activities are also excessive.

 

This case was filed in U.S. District Court for the Southern District of Iowa. On June 8, 2010, the Court granted in part and denied in part the defendants’ Motion to Dismiss. The case may proceed on the counts of excessive advisory fees and excessive distribution fees. On October 28, 2011, the plaintiff filed a new complaint with the Court. 

 

  • Plaintiff Files Second Anniversary Complaint
    On October 28, 2011, the plaintiffs filed a new complaint on the two year anniversary of the filing of the original case.
    application/pdf iconCurran v Principal Mgmt Corp Second Anniversary Complaint 10-28-2011.pdf
  • Court Decides to Grant In Part and Deny In Part the Motion to Dismiss
    On June 8, 2010, the Court granted the defendants’ Motion to Dismiss in part. In its decision, the Court dismissed the plaintiff’s allegation regarding the existence of excess profits from economies of scale, but permitted the case to continue regarding the allegations of excessive layers of advisory fees and the charging of excessive distribution fees. The Court stated that the plaintiffs’ allegations all support a reasonable inference that the investment adviser collected excessive fees for advising the Principal Funds. The Court also stated that the plaintiffs have met their burden by alleging that fees collected by the distributor for its distribution services surpassed the value of those services, and the manner in which those fees were assessed did not correspond to the type of services performed but, rather, resemble fees collected for advisory services.
    application/pdf iconCurranvPrincipalMgmtCorpCourtOrderonMotiontoDismiss6-8-2010.pdf
  • Defendants File Motion to Dismiss the Case
    On January 29, 2010, the defendants filed a Motion to Dismiss the Amended Complaint. In their Motion, the defendants argued that the fees charged met the Gartenberg standard of not being “so disproportionately large that it bears no relationship to the services rendered and could not have been the product of arm’s length bargaining.”
    application/pdf iconCurranvPrincipalMgmtCorpDefendantsMotiontoDismiss1-29-2010.pdf
  • Shareholders File Amended Complaint on Behalf of the Principal Funds
    On January 15, 2010, two shareholders filed an Amended Complaint on behalf of the Principal Funds and against the Funds’ investment adviser and distributor.
    application/pdf iconCurranvPrincipalMgmtCorpAmendedComplaint1-15-2010.pdf
  • Shareholder Files Complaint on Behalf of the Principal Funds
    On October 28, 2009, a shareholder in the Principal Funds filed a Complaint against the Funds’ investment adviser and distributor. The Complaint sought to recover excessive advisory and distribution fees charged to the Funds by its investment adviser and distributor.
    application/pdf iconCurranvPrincipalMgmtCorpComplaint10-28-2009.pdf
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A shareholder in the Principal Funds initiated a lawsuit against the Funds’ adviser (Principal Management Corporation) and distributor (Principal Funds Distributor). The Complaint seeks to rescind the investment advisory agreements and distribution plans and recover fees charges by the defendants. The Complaint alleges that the defendants breached their fiduciary duty to the shareholders of the Funds by using multiple layers of advisory fees that the plaintiff believes are excessive. The Complaint also alleges that Rule 12b-1 fees for sales and distribution activities are also excessive.

 

This case was filed in U.S. District Court for the Southern District of Iowa. On June 8, 2010, the Court granted in part and denied in part the defendants’ Motion to Dismiss. The case may proceed on the counts of excessive advisory fees and excessive distribution fees. On October 28, 2011, the plaintiff filed a new complaint with the Court. 

 

Document Title: 
Plaintiff Files Second Anniversary Complaint
Document Desc: 
On October 28, 2011, the plaintiffs filed a new complaint on the two year anniversary of the filing of the original case.
Upload Document: 
application/pdf iconCurran v Principal Mgmt Corp Second Anniversary Complaint 10-28-2011.pdf
Document Title: 
Court Decides to Grant In Part and Deny In Part the Motion to Dismiss
Document Desc: 
On June 8, 2010, the Court granted the defendants’ Motion to Dismiss in part. In its decision, the Court dismissed the plaintiff’s allegation regarding the existence of excess profits from economies of scale, but permitted the case to continue regarding the allegations of excessive layers of advisory fees and the charging of excessive distribution fees. The Court stated that the plaintiffs’ allegations all support a reasonable inference that the investment adviser collected excessive fees for advising the Principal Funds. The Court also stated that the plaintiffs have met their burden by alleging that fees collected by the distributor for its distribution services surpassed the value of those services, and the manner in which those fees were assessed did not correspond to the type of services performed but, rather, resemble fees collected for advisory services.
Upload Document: 
application/pdf iconCurranvPrincipalMgmtCorpCourtOrderonMotiontoDismiss6-8-2010.pdf
Document Title: 
Defendants File Motion to Dismiss the Case
Document Desc: 
On January 29, 2010, the defendants filed a Motion to Dismiss the Amended Complaint. In their Motion, the defendants argued that the fees charged met the Gartenberg standard of not being “so disproportionately large that it bears no relationship to the services rendered and could not have been the product of arm’s length bargaining.”
Upload Document: 
application/pdf iconCurranvPrincipalMgmtCorpDefendantsMotiontoDismiss1-29-2010.pdf
Document Title: 
Shareholders File Amended Complaint on Behalf of the Principal Funds
Document Desc: 
On January 15, 2010, two shareholders filed an Amended Complaint on behalf of the Principal Funds and against the Funds’ investment adviser and distributor.
Upload Document: 
application/pdf iconCurranvPrincipalMgmtCorpAmendedComplaint1-15-2010.pdf
Document Title: 
Shareholder Files Complaint on Behalf of the Principal Funds
Document Desc: 
On October 28, 2009, a shareholder in the Principal Funds filed a Complaint against the Funds’ investment adviser and distributor. The Complaint sought to recover excessive advisory and distribution fees charged to the Funds by its investment adviser and distributor.
Upload Document: 
application/pdf iconCurranvPrincipalMgmtCorpComplaint10-28-2009.pdf
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Curran v. Principal Management Corporation