Washington, DC: (Jun-29-07) A derivative class action lawsuit was filed against Columbia Management Advisors, Inc. and Columbia Wanger Asset Management, alleging that the advisers to the Settling Funds engaged in four distribution practices known as "revenue sharing," "directed brokerage," "12b-1 payments," and "soft dollars." The lawsuit claimed the defendants used such practices to make improper payments to broker-dealers to promote sales of such Columbia fund shares, thereby increasing various fees that benefited the defendants to the detriment of fund shareholders. Additionally, the complaint alleged the defendants conduct created conflicts of interests that prevented them from acting in the best interests of the shareholders and that the defendant trustees breached their fiduciary duties to manage and supervise the funds.
In a settlement reached, the defendants did not admit to any wrongdoing but entered into an agreement, in which they agreed to contribute $100,000 as a "hard dollar" contribution to research expenses to benefit some or all of the Settling Funds. In general, the settlement provides the following has been instituted or will be instituted following court approval of the settlement: Columbia Management Advisors, Inc. and Columbia Wanger Asset Management, L.P., the advisers to the Settling Funds, have taken actions regarding instituting break points for many of the funds under their management; have enhanced, or will enhance, shareholder communication on their web site and in other public disclosures regarding revenue sharing. [INFO BOLSO: DISTRIBUTION PRACTICES]