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![handle is hein.congrecreports/crptxabfm0001 and id is 1 raw text is: AUT-ENTICATED
US. GOVERNMENT
INFORMATION
GPO
115TH CONGRESS REPT. 115-662
2d Session HOUSE OF REPRESENTATIVES Part 1
MUTUAL FUND LITIGATION REFORM ACT
MAY 7, 2018.-Committed to the Committee of the Whole House on the State of the
Union and ordered to be printed
Mr. HENSARLING, from the Committee on Financial Services,
submitted the following
REPORT
together with
MINORITY VIEWS
[To accompany H.R. 4738]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred the
bill (H.R. 4738) to amend the Investment Company Act of 1940 to
provide complaint and burden of proof requirements for certain ac-
tions for breach of fiduciary duty, having considered the same, re-
port favorably thereon without amendment and recommend that
the bill do pass.
PURPOSE AND SUMMARY
On January 8, 2018, Representative Tom Emmer introduced H.R
4738, the Mutual Fund Litigation Reform Act. H.R. 4738 amends
section 36(b) of the Investment Company Act of 1940 (ICA) to pro-
vide that in a derivative action brought pursuant to the ICA a
claim for breach of fiduciary must state with particularity all the
facts that establish the breach of fiduciary duty and the breach of
fiduciary duty must be shown by clear and convincing evidence.
BACKGROUND AND NEED FOR LEGISLATION
The goal of H.R. 4738 is to reduce abusive litigation against mu-
tual fund advisers that lack merit, waste the time and resources
of an already burdened court system, and traditionally seem to op-
erate to the benefit of plaintiffs' lawyers rather than the mutual
fund shareholders on whose behalf they purport to be filed.
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