A federal lawsuit has been brought against Fidelity
] on behalf of participants and beneficiaries who were invested in Fidelity funds maintained through the firm's profit-sharing plan, InvestmentNews'
Darla Mercado writes. The class action alleges that Fidelity put workers in more expensive proprietary funds when cheaper options were available, Mercado writes.
Mercado reports that former Fidelity employee Lori Bilewicz
filed a first amended class action complaint against FMR LLC, MR LLC Investment Committee
and a number of John and Jane Does, that focuses on the time period from March 20, 2007 to present.
The plaintiffs also alleged that Fidelity used many of its own funds at the end of 2010, with as high as 88 percent of the plan's mutual funds made up of actively managed proprietary funds, accounting for 84 percent of the plan's assets, Mercado writes. Mercado reports that the plaintiffs are seeking disgorgement of all investment advisory fees paid to Fidelity's subsidiaries and a restoration of plan losses and restitution, to name a few.
Mercado interviewed Vincent Loporchio
, a Fidelity spokesman, who was quoted as saying, "The lawsuit is totally without merit and we intend to defend vigorously against it."
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