ow liable is a fund firm in the case of a fund shareholder gone missing? A ruling in a Massachusetts Appeals Court provided a mixed signal. The court ruled Wednesday that Fidelity Investments
must pay the legal expenses of a shareholder who the firm lost track of in 1969, but it added Fidelity had no liability for the account itself.
The case started in 1965 when the father of Sean Barron opened an account for his newly born son in the Fidelity Fund
. The Barron family moved in 1969 and stopped receiving statements on the account, although the family continued to receive statements on other accounts at Fidelity. After 12 years of no contact, Fidelity deemed the account abandoned in 1981 and sent the money to the state treasurer's office.
Barron next contacted Fidelity in 1994 seeking to reclaim the account. Fidelity refused to reinstate the account for Barron. Unable to settle, the two sides ended up in court with Barron seeking more than $750,000 in compensation (the lost account was valued at $257,000).
Yesterday the matter was resolved with the judge ruling that Fidelity had calculated the account's value correctly and had properly turned the assets over to the state. However, the judge also ruled that Fidelity would have to pay Barron's legal bills. The judge said he would determine the size of those bills at a later date.
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