A jumbo Fidelity
] 401(k) client, ABB
, just lost a lawsuit over 401(k) fees and has been ordered to shell out $35.2 million. The Boston-based mutual fund giant must pay $1.7 million, too. And $21.8 million of those damages stems solely from ABB swapping out the Vanguard Wellington Fund
and pouring the assets into the Fidelity Freedom
target date funds.
Our sister publication The 401kWire reported
on the news yesterday. Bloomberg
, Dow Jones
also covered the ruling.
"Instead of getting lower fees for ABB employees in their 401(k) plan, ABB and Fidelity used employees' retirement assets to benefit themselves," stated Jerry Schlicter
, the lead trial lawyer for the plaintiffs.
Yet a Fidelity spokesman noted that the court tossed out "the vast majority of the claims against Fidelity."
"While the court is suspicious that the relationship between ABB and Fidelity Trust infected more than the specific instances identified in this order, the court cannot rely on suspicion and therefore rejects plaintiffs' global damage theory," the judge said.
And an ABB spokesman told Bloomberg
and Dow Jones
that the Swiss technology company is "looking at the ruling and will decide soon whether to appeal."
The 81 page ruling came out on March 30 after a four week trial. #
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