Fidelity Investments is one of the largest financial services companies in the world, with over $11 trillion in assets under management. As such, it is no surprise that the company has been involved in a number of lawsuits over the years.
One of the most common types of lawsuits against Fidelity involves its retirement plans, such as 401(k)s and IRAs. These lawsuits often allege that Fidelity has breached its fiduciary duty to its plan participants by charging excessive fees, investing in risky investments, or failing to adequately monitor its investment managers.
For example, in 2023, a group of former Quanta Services employees filed a lawsuit against the company alleging that it had breached its fiduciary duty by offering inappropriate and risky target date funds in its 401(k) plan. The lawsuit is still ongoing.
In another example, in 2022, a pilot sued American Airlines and Fidelity alleging that they had violated ERISA by offering 401(k) plans that include environmental, social, and governance (ESG) factors. The lawsuit is also still ongoing.
Fidelity has also been sued over its brokerage services. For example, in 2023, a customer sued Fidelity alleging that the company had negligently allowed a hacker to gain access to his account and steal his money. The lawsuit is still ongoing.
Finally, Fidelity has also been sued over its data security practices. For example, in 2023, a customer sued Fidelity alleging that the company had failed to properly secure its data, which led to a data breach that exposed the personal information of millions of customers. The lawsuit is still ongoing.
Conclusion
Fidelity is a large and complex financial institution, and as such, it is not surprising that the company has been involved in a number of lawsuits over the years. If you are considering investing with Fidelity, it is important to be aware of the potential risks involved. You should also carefully review the company’s investment policies and procedures before opening an account.
FAQs
What is the most common type of lawsuit against Fidelity?
The most common type of lawsuit against Fidelity involves its retirement plans, such as 401(k)s and IRAs. These lawsuits often allege that Fidelity has breached its fiduciary duty to its plan participants by charging excessive fees, investing in risky investments, or failing to adequately monitor its investment managers.
What is a fiduciary duty?
A fiduciary duty is a legal obligation to act in the best interests of another person. In the context of retirement plans, Fidelity has a fiduciary duty to its plan participants to invest their money wisely and to avoid conflicts of interest.
What is a target date fund?
A target date fund is a type of mutual fund that automatically adjusts its asset allocation as the investor gets closer to their retirement date. Target date funds are often used as default investment options in 401(k) plans.
What is ESG investing?
ESG investing is a type of investing that considers environmental, social, and governance factors in addition to financial factors. ESG investors believe that these factors can have a material impact on a company’s long-term performance.
What is a data breach?
A data breach is an unauthorized access to and theft of sensitive data. Data breaches can expose a wide range of personal information, such as names, Social Security numbers, credit card numbers, and bank account numbers.
What should I do if I am considering investing with Fidelity?
If you are considering investing with Fidelity, it is important to do your research and understand the risks involved. You should also carefully review the company’s investment policies and procedures before opening an account.
References
- Bloomberg Law News: https://news.bloomberglaw.com/employee-benefits/ex-quanta-workers-advance-lawsuit-over-fidelity-401k-funds
- Forbes: https://www.forbes.com/sites/jonmcgowan/2023/06/05/american-airlines-and-fidelity-investments-sued-over-esg-in-401k/
- ThinkAdvisor: https://www.thinkadvisor.com/2023/09/14/fidelity-bofa-others-face-new-lawsuit-over-moveit-data-breach/
