A federal judge has ruled that the holder of a variable annuity has standing to bring a claim under § 36(b) of the 1940 Act for allegedly excessive compensation paid to the investment adviser of the underlying mutual funds. John Baker of Stradley Ronon provides a nice summary of the ruling, along with a copy of the court’s order, in his FundLaw blog. The defendants had moved to dismiss the case by arguing that the plaintiff was not a “security holder” of the funds and therefore had no standing. Under this theory, the only permissible private plaintiff would be the insurance company that is the record holder of the fund shares. It is interesting to note that the court distinguished this variable annuity case from a fund-of-funds situation, in which the plaintiffs do not enjoy the incidents of ownership in the underlying funds.