A class-action lawsuit against Fidelity Investments alleging it had a conflict of interest in directing its employees into a more expensive 401(k) account has drawn the attention of asset managers and retirement law experts nationwide.
The lawsuit, filed in Fidelity's home state of Massachusetts in March by Lori Bilewicz, a former Fidelity employee, was joined this month by 26 other plaintiffs. The suit claims Fidelity Management and Research limited employees to investing in its own funds, which charged higher fees than comparable vehicles available from other firms.
"This should sound a warning to every asset manager," said Marcia Wagner, principal of the Wagner Law Group in Boston. "Name your favorite company. … They should be consulting an ERISA attorney and making sure they are doing everything right."
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