Pacific Investment Management Co. will fight a lawsuit by a shareholder of its Pimco Total Return Fund alleging the company gouges investors with excessive advisory fees to support billion-dollar bonuses for top executives.
Bloomberg News reports that Pimco was sued December 31 in Seattle federal court over claims that fees totalling $1.2bn in 2013 are unfair and excessive, bear no reasonable relationship to the services rendered and couldn’t have been the product of arms length negotiations, according to the complaint.
Pimco breached its fiduciary duties to investors and should return fees and improper compensation to shareholders, investor Robert Kenny said in the complaint.
'Pimco believes this lawsuit is without merit and intends to vigorously defend itself', Agnes Crane, a Pimco spokeswoman, said in an e-mail.
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