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Investment Branch of Fidelity Sued for Fiduciary Breach

Investment Branch of Fidelity Sued for Fiduciary Breach

Individuals that contribute to a Delta Air Lines Inc. 401(k) plan have sued sections of Fidelity Investments, on the claim of wrongdoing in the firm’s record keeping role. According to its latest Form 5500, the Delta Family-Care Savings Plan had approximately $7.8 billion in assets. The participants in this investment fund are seeking a class-action status and allege that Fidelity hired Financial Engines to provide investment advice and to collect a piece of the action. The complaint stated, “In order to be included as the investment advice service provider on Fidelity’s (record-keeping) platform, Financial Engines agreed to pay – and is paying – Fidelity a significant percentage of the fees it collects from 401(k) plan investors.”

Faulty Investment Arrangement

According to the complaint, this occurrence of events contributed to inflating the price of the investment advice services, therefore violating (Fidelity’s) fiduciary responsibility. Contributing participants also maintain that Fidelity’s management of a self-directed brokerage account called BrokerageLink , acquire classes that have higher expense ratios, which disperse out more revenue sharing payments and uses the plans’ assets for its own benefit and growth.

Fidelity spokesman Vincent Loporchio, explained in an email “the allegations in this complaint are without merit, and we intend to defend against them vigorously.”

The case is Fleming et al. vs. Fidelity Management Trust Co. et al.

Have You Been Victimized in an Investment Breach? Starr Austen Can Help

Investing your money should help have you feeling confident about your future, not worried. Our team of investment fraud lawyers have experience in representing clients who have purchased unsuitable annuities and will fight for the protection of investors and handle cases involving unsuitability, securities arbitration misrepresentation, overconcentration, broker fraud , negligence and breach of trust