Norway*s High Court has ruled against banking group DNB ASA in what represents a landmark in "closet indexing" cases.
Norway’s largest financial services group DNB ASA is to pay back the equivalent of millions of euros to investors after the Supreme Court of Norway found for 180,000 individual investors in a class action brought by the Norwegian Consumer Council.
The court found that three mutual funds had not been managed correctly to give investors the best chance of yield.
Better Finance, a consumer group, called the ruling “historic” after the Supreme Court ordered the bank to repay 350 million Norwegian kroner (€34 million), adding that DNB’s asset management group was found “guilty of closet indexing”, after the Court found the individuals had a right to a reduction in fees.
Better Finance pointed out that this case also sets a record due to the vast number of participants, and a precedent, in that the practice of closet indexing, “due to a lack of a legal and measurable definition, is particularly difficult to demonstrate”.