It looks like a lucky asset manager will be spared further legal headaches.
] won dismissal of a suit brought by the Laborers Local 265 Pension Fund
and the Plumbers and Pipefitters Local No. 572 Pension Fund
, which alleged that the asset manager collected "grossly excessive" compensation from securities-lending returns to iShares, Bloomberg's
Andrew Zajac reports.
In Nashville, Tennessee, U.S. District Judge Aleta Traugner ruled that the law governing such lending doesn't authorize investors to sue, Zajac writes. The pension funds have until September 17 to file an amended complaint, Zajac adds.
Barrons' Brendan Conway reported on the argument brought by the pension funds in more detail, writing:
"The court didn't buy the interpretation of certain key parts of the Investment Company Act of 1940…The pair of pensions sued early this year by asserting BlackRock and its partners violated certain parts of the act by keeping 40 percent of revenues generated by keeping 40 percent of revenues generated by the securities-lending activities of iShares ETFs. BlackRock said at the time it was 35 percent."
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