Meyer v. Oppenheimer Management Corp. case brief

Meyer v. Oppenheimer Management Corp. case brief summary
895 F.2d 861 (1990)

CASE SYNOPSIS

Appellant shareholder sought review of a judgment of the United States District Court for the Southern District of New York dismissing the complaint brought under the Investment Company Act of 1940, 15 U.S.C.S. § 80a-1 et seq.

FACTS

• The Daily Cash Accumulation Fund is a mutual fund in which Pamela Meyer (the Plaintiff) was a shareholder. 
• The fund's adviser was Centennial Capital Corporation, of which Oppenheimer Management Corp. (the Defendant) was a 30% shareholder. 
• In 1982, the directors of the fund made a proposal to change the fee structure of the fund, issuing a proxy statement which notified the shareholders of the change. 
• At the same time, Oppenheimer was negotiating with another firm to sell its shares of Centennial. 
• These negotiations were not disclosed to the fund directors or to the shareholders of the fund until after the transaction was complete. 
• Meyer then brought suit against Oppenheimer and the directors of the fund, alleging that the sale of Centennial stock by Oppenheimer constituted a material omission from the proxy statement in violation of Rule 20a-1 under the Investment Company Act of 1940, applying § 14(a) of the Exchange Act to the Investment Company Act. 
• The district court ruled in Oppenheimer's favor. 
• As a result, Meyer appealed to the Second Circuit Court of Appeals.

ISSUE
Appellant sought review of judgment dismissing complaint brought under the Investment Company Act of 1940, 15 U.S.C.S. § 80a-1 et seq.

DISCUSSION
The court held that the potential sale of investment interest was not material to proxy statements regarding the decision to adopt the plan, under 17 C.F.R. § 270.12b-1 (1989), which permitted use of investment fund assets to cover sale and distribution expenses. The court also held that adoption of the plan was not an unfair burden on the investment fund under the Act, 15 U.S.C.S. § 80a-15(f), because adoption of the plan was a matter of economic necessity. The court determined that it was not clearly erroneous to decide that advisory fees paid by the investment fund were not excessive under the Act, 15 U.S.C.S. § 80a-35(b), because fees were not atypical but rather were a matter of economic necessity.

CONCLUSION
The court affirmed.

Suggested Study Aids For Securities Regulation Law
Securities Regulation in a Nutshell, 10th (Nutshell Series)
Securities Regulation: Examples & Explanations, 5th Edition
Securities Regulations: The Essentials