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Directors Sued Over Sec Lending Fees

BlackRock and the independent directors of the iShares funds are being sued over allegedly excessive securities lending fees being paid to a Blackrock affiliate.  The funds used a Blackrock affiliate as agent for their securities lending program.  The complaint alleges that the affiliate received a substantially higher fee than what an independent agent would have received for providing the same services.  The fund directors are being sued for breaching their fiduciary duties by approving the excessive compensation arrangements.  According to the complaint:

Given the time demands on Defendant Directors’ schedules, combined with the number of funds they oversee, as well as the substantial compensation the Defendant Directors receive from iShares and related entities, iShares Directors are either unable or unwilling to competently oversee the activities of iShares’s service providers and thus fulfill their fiduciary duties.”

A copy of the complaint is attached to this post.