December 7, 2007 (PLANSPONSOR.COM) - A federal judge
in New York has shot down claims by Investors in nine Salomon
Smith Barney mutual funds that the funds' fees were too
high.
U.S. District Judge Paul A. Crotty of the U.S.
District Court for the Southern District of New York
dismissed with prejudice investors’ suits that
claimed excessive fees charged by the funds’ advisers
and distributors ended up costing the funds millions of
dollars in losses.
Crotty asserted in his ruling that even though the
plaintiffs’ case had been “reconfigure(d)”
after an earlier version was also thrown out, it still
did not contain enough substance to sustain a charge of
violating Section 36(b) of the Investment Company Act,
the court contended.
The plaintiffs – five individual investors–held
shares in the funds between May 2003 and March 2004. They
accused Salomon Smith Barney of the Section 36(b)
violations as a fund distributor, as well as four
corporate affiliates that operated, managed, and advised
the funds.
Four Types
The suit charged defendants committed the 36(b)
violations in relation to four types of fees:
investment advisory fees,
Rule 12b-1 fees,
transfer agency fees, paid either to an
affiliate or an independent third party to handle
sales and redemptions of fund shares,; and
administrative fees.
Among the plaintiffs’ allegations: that the
funds underperformed as compared with their peers which
meant that the fees “did not translate into superior
investment advice.”
“Excessive” Criteria
Crotty said that in deciding whether a fee is so
excessive as to represent a fiduciary breach, a judge had
to keep in mind six factors laid out in a 1982 case from
the 2
nd
U.S. Circuit Court of Appeals involving
Merrill Lynch Asset Management:
the nature and quality of the services provided by
the advisers to the shareholders;
the profitability of the mutual fund to the
adviser-manager;
“fall-out” benefits;
the economies of scale achieved by the mutual fund
and whether such savings are passed on to the
shareholders;
comparative fee structures with other similar
funds; and
the independence and conscientiousness of the
mutual fund’s outside directors.
IThe ruling in n re Salomon Smith Barney Mutual
Fund Fees Litigation,S.D.N.Y., No. 04 Civ. 4055 (PAC), 12/3/07 is
here
.
This week, I asked readers if they would have one (or
more) at their workplace – and if they intended to
attend.
The vast majority of this week’s respondents said
there would be a workplace-related holiday party this year.
In fact, more than two-thirds (68.3%) of this week’s
respondents said there would be one, and 16.5% indicated
there would be more than one.
Interestingly enough, about two-thirds of those office
parties will not take place in the office –
though one-in-five will, and the rest said they would take
place both in – and out – of the office (presumably the
more-than-one party group, though for all I know, some will
start one place and finish somewhere else.
As for “being there”, while more than half
(58.9%) said they would attend – and roughly one in eight
said they “wouldn’t miss it,” roughly one in 10 said they
hadn’t yet decided, a comparable number said they would not
be attending, and nearly 6% said “not if I can help it.”
Or, as one reader noted, “Do I really have to go to all
4… and counting??”
For the very most part, this week’s verbatims were
rather “Scroogely” – that is to say, for many the office
holiday party seems to be either a bore, an unseemly
expenditure of company funds, an event scheduled at an
inconvenient time/place, an obligation (one respondent
termed it “a CLM (Career Limiting Move)”).
Not that that was a universal sentiment.
As one respondent noted,
“Alcohol is not allowed at our parties, so the
conversation is fun and focused on “catching up”
on latest events, our families, pets, holiday plans etc.
It’s a great time for the team to relax and converse
freely without having to drag along our spouses, maintain
facades and regret the “post-party” stories.”
But another noted,
“The main holiday party is after work hours. I work in a
great company and with wonderful colleagues that I like
associating with during business hours. When I am required
and compensated to give up my private time to go to a work
function, I will go to the holiday party.”
Then there was the reader who noted
“Being an office of one, everyday is a party!”
Editor’s Choice runners-ups go to the readers who
submitted somewhat similar responses:
“Yes, there will be a party but I have designated myself
as the driver for the evening to avoid the Phyllis Diller
prophesy…”,
said one alluding to this week’s Wednesday Wisdom.
The other offered a Monday Musing;
“Why does a workplace serve free and unlimited alcohol
at a festive function and then require employees to return
to work later that same day?”
But this week’s
Editor’s Choice
is drawn from the recountings of several “intriguing”
holiday party stories;
“We learned the hard way that
off-site office parties can cost the company less. During
our last party held at the office, several employees, after
several drinks, had gone into the copy room to scan and
email pictures of their “rear-ends” to their
co-workers… creating the game of “guess
whose?”. The glass on the copy machine, not being
designed to hold the weight of a human, shattered as the
fourth person took her turn to be scanned. Of course
everyone ran and denied all but the following year
management decided to hold the annual function in a public
restaurant… and give out tickets that the employee could
exchange for a drink (thus limiting the alcohol intake). By
the by, (1) no embarrassing trip to the emergency room was
necessary for the employee, and (2) Xerox does not cover
“rump scanning” under the service agreement.”
Thanks to
everyone who participated in our survey!
Our office party is
only partially subsidized. Why would I want to pay
to be with people that I see at work everyday
anyway?
Debating do I want
to celebrate & then have to stay later to get
the work done?? The parties usually aren't that
good...
pretty much
obligated to go because of my position
The main one for our
entire department will be on-site. Our Performance
Group will have our own little party at a very nice
restaurant.
Attendance is
mandatory
One of my
subordinates is in charge so I really have to
go.
I have about 6
inches of snow waiting for me to shovel. I could go
home and shovel or go to a party with co-workers.
Not too tough of a decision.
No choice!
I made some lame
excuse that I would be out of town. I don't
think anyone bought it.
The parties are
always at trendy restaurants in Philadelphia. Open
bar at lunch and you get the rest of the day
off.
The party is during
working hours. If you don't attend, you have to
stay in the office and work or take vacation
time.
Why would I want to
go to a party with all of the people I work with??
I get enough of them during the week!! Besides, I
have tickets to a basketball game!!
The main holiday
party is after work hours. I work in a great
company and with wonderful colleagues that I like
associating with during business hours. When I am
required and compensated to give up my private time
to go to a work function, I will go to the holiday
party.
Probably will be
"mandated" that I go.
I will only be there
if I value my job and the income it
provides.
I'm new, so
I'm stuck with helping organize it. However,
I'm a hero because I found a decent place on a
paltry budget.
Already went
Fortunately, I have
class, so I cannot attend the company party.
Unfortunately, I'll have to attend the
department party.
Conflict with date
or I would attend.
Depends on the day
and time it is to take place whether I will be free
to attend
This year I have a
great excuse - an out-of-town wedding.
And miss the free,
long lunch?
Spouses
included...
I will manage to
miss both of them.
Our department one
is on a Friday from 3:00 to 5:30. I have class on
Friday's and leave at 3:30. The other is a
company party. They have buffets scheduled at a
local hotel and people have to choose from one
hour timeslots as to when they'll go. We have
to go as a department and I'll be on vacation
that day. Hmmm. What a shame.
Do I really have to
go to all 4... and counting??
It's one more
time suck when 1) work loads have doubled because
of the end of year rush; and 2) personal
obligations have doubled because of the end of year
rush.
I like the fact that
we have a Christmas Party.
I go because of the
nice raffle prizes (must be present to win), which
only perpetuates the spending on an event when I
would rather have the cash equivalent.
Can't say
I've ever really had "fun" at one but
I do enjoy planning the party and am happy when it
goes well and the employees enjoy it
I hate office
parties? It is not fun to get drunk and eat bad
food with people you are only pretending to
like.
I won't miss the
one this year, because it will probably be the last
at this company.
This is our first
off-site party in six years. Previous president
didn't want the responsibility (with travel,
alcohol, etc) or the expense. Current president is
willing to give it a try.
Being an office of
one, everyday is a party!
It's one more
time suck when 1) work loads have doubled because
of the end of year rush; and 2) personal
obligations have doubled because of the end of year
rush.
I like the fact that
we have a Christmas Party.
I go because of the
nice raffle prizes (must be present to win), which
only perpetuates the spending on an event when I
would rather have the cash equivalent.
Can't say
I've ever really had "fun" at one but
I do enjoy planning the party and am happy when it
goes well and the employees enjoy it
I hate office
parties? It is not fun to get drunk and eat bad
food with people you are only pretending to
like.
We always have too
many complaints about the decorations being too
Christmassy. I am waiting to see what happens this
year after we put a jew and muslim in charge of
decorations.
I won't miss the
one this year, because it will probably be the last
at this company.
This is our first
off-site party in six years. Previous president
didn't want the responsibility (with travel,
alcohol, etc) or the expense. Current president is
willing to give it a try.
Being an office of
one, everyday is a party!
This year's
shebang sounds nice but often I think the party
only adds stress rather than rel1eving it. The
pressure for a new dress, hose without ladders,
shoes that don't pinch, jewelry?, and only
alluding to the expensive undergarmets that go with
it all on a woman's salary means who can afford
it? Rats! I forgot the hair & facial.
Not attending is
what I call a CLM (Career Limiting Move).
Our home office
allots so much per employee. The employees
don't get a say in how it's spent. This
year the Managers have decided to have the meat
catered, and the employees get to bring the side
dishes and desserts in. Needless to say, the women
in the office do the cooking and cleaning up, the
men sit on their fat behinds, eat, and get fatter.
Do I like office parties? No! Do I go? Don't
have a choice!
Onsite, catered,
during the workday, no booze and raffles make for
an appreciated day.
Our holiday parties
are typically held from 7-10 on the weekend at some
place downtown. I think the time and the format
helps keep the behavior more subdued. Those that
want to continue the party go some place else
afterward.
Alcohol is not
allowed at our parties, so the coversation is fun
and focused on "catching up" on latest
events, our families, pets, holiday plans etc.
It's a great time for the team to relax and
converse freely without having to drag along our
spouses, maintain facades and regret the
"post-party" stories.
If alcohol is served
some partiers should really refrain from taking in
too many drinks. They often tend to behave in a
manner that sheds a new light on their
professionalism or the lack thereof!
(Monday Musing:) Why
does a workplace serve free and unlimited alcohol
at a festive function and then require employees to
return to work later that same day?
I actually said to
my wife yesterday that I was wondering when I got
to the point where I am not jumping at the chance
to go to a party with an open bar.
Our office party is
during work hours - basically a long lunch, so I
guess we don't have much of a choice about
attending.
I work for a state
plan. We get a paycheck and some decent benefits,
but it stops there. The employees will bring in
food for a potluck on our lunch hour next week.
That's as close to a Christmas party as
we'll get. And, if a business contact should
send a token gift to the office we will send it
back. State employees are not allowed to receive
"so much as a pen, a pencil or a coffee
mug"; however, different rules apply to
elected officials. We once sent a 50 cent box of
Red Hot candies back to a London manager pitching a
new fund at a $7.00 cost to us! The fruit baskets
are also pretty ripe by the time they get them
back. I wonder if we will be asking charities to
return money that fund managers have donated in our
name? We did get a bonus this year; in leu of a pay
raise. That way the State won't be obligated to
the pay again next year. Merry Christmas
Holiday parties, in
general- not just ours, have lost the Holiday
Spirit. It is now all about the party- what do we
"get", how much money can be spent and
can booze be served on work premises?, etc. etc.
Twenty years ago, our party was focused on our Toys
for Tots campaign and things like that.
Our office parties
are done on company time so there really isn't
any excuse for people not attending. It looks bad
for someone who has been at work in the morning to
miss the party in the afternoon. I think it is a
good opportunity for people to mix away from the
office. On the other hand, I have had to deal with
harassment complaints on one or two occasions. What
happened to holiday good will?
Boring!!!
I suggested that, in
the "Festivus" tradition, we hold an
annual airing of grievances -- but this idea was
frowned upon. Free food mitigates grievances, after
all.
Most feel compelled
to go and the company has an extremely unrealistic
budget. So we have crappy parties that people
really don't want to attend. We be better off,
morale wise, just not having them or using the per
head amount toward a gift.
Our company is in a
fourth-quarter budget crunch, yet we're having
a very elaborate Holiday Party, complete with a
dance performance. We're on budget crunches,
and people are being let-go, yet we can have an
elaborate party? hmm...
Your quote by
Phyllis Diller totally described my last place of
employment. We would have an employee that would
develop a seemingly irreversable pattern of bad
work, but our partners would always wait until
after the Christmas party to fire them. I suppose
they didn't want to put a damper on
anyone's holiday spirit!
My company is way
too cheap to have a holiday party.
Last year they could
not get their act together to plan a party (no loss
there), so having 4 parties this year makes up for
last year's lack of one? And while we are at
it... for those of you who think a recycled gift is
appropriate for the Yankee Swap that is costing
everyone else at least $25, think again. If you are
that cheap, don't participate.
I've heard
stories, but never personally witnessed any of the
excitement.
Of course I'm
going. It's always fun seeing one of your
"soon to be formor" coworkers make an ass
of themselves! Some of us even have a pool trying
to guess who will do it this year.
This year my
husbands company is paying for hotel rooms for
after the December 20th (Thursday night) holiday
party. I think this is really outstanding so that
the employees have a great time and the companies
liabilities are reduced! SO I am taking the next
day off but the employees will be expected to be at
work on Friday.
"Anonymous"? On the Internet? Surely, you
must be kidding...
We tend to have
great parties because we chose interesting venues
-- this year's party will be held at the
Exploratorium, really a place for kids with a
scientific bent -- and that totally describes our
work force! Add some good California wine and you
have a terrific party.
Last year's
party ended with a young and quite drunk employee
getting hauled off to jail after he took a swing at
one of our company managers. Hopefully, this
year's party will be less eventful.
During the
'excesses' of the 1990's, my department
had a party that started with 7 tables of various
hot and cold appetizers and an open bar (hard
liquor, beer, wine, etc.), followed by a 5-course
meal, followed by the reopening of the open bar and
several tables of desserts. Everyone got tipsy,
drove home safely and came to work the following
day. Ahhh, the good old days.
At a former
employer, I had to stop going to the holiday
parties just to maintain my sanity. They were held
offsite and the spirits were usually flowing so
freely that everyone apparently thought I was there
as HR just to hear confessions. I heard from those
who hated their boss to reports of those who were
doing quite the opposite of hating their boss.
People confessed that they were looking for other
jobs, that they were considering changing careers,
that they were in therapy, etc. I tripped over
people making out near the coat rooms,
unfortunately noticing that they were married but
not to each other. It was an ethical
nightmare.
We learned the hard
way that off-site office parties can cost the
company less. During our last party held at the
office, several employees, after several drinks,
had gone into the copy room to scan and email
pictures of their "rear-ends" to their
co-workers... creating the game of "guess
whose?". The glass on the copy machine, not
being designed to hold the weight of a human,
shattered as the fourth person took her turn to be
scanned. Of course everyone ran and denied all but
the following year management decided to hold the
annual function in a public restaurant... and give
out tickets that the employee could exchange for a
drink (thus limiting the alcohol intake). By the
by, (1) no embarrassing trip to the emergency room
was necessary for the employee, and (2) Xerox does
not cover "rump scanning" under the
service agreement.
At my last job, our
holiday parties were at rented space in downtown
hotels near the office. Many people would get hotel
rooms to avoid drinking and driving. The holiday
party was terminated after the after parties in the
rooms got out of control. There were several people
pairing up, hookers in the rooms, smoking of the
whacky weed, etc. One person left his wife after
the holiday party and moved in with his
secretary.