The complaint brought by an FMR LLC Profit Sharing Plan participant on behalf of all participants says the history of the plan’s investment offerings demonstrates rampant conflicts of interest. “FMR’s self-interest is the only plausible explanation for the plan’s one hundred percent proprietary fund investment array,” the lawsuit states.
The suit claims the proliferation of Fidelity funds in the plan caused the plan and participants to incur unusually high expenses, to the benefit of FMR. It also says the defendants maintained the plan’s investment in high-fee Fidelity target-date funds (TDFs) when FMR affiliates offered lower-fee and better-performing TDFs.
According to the complaint, the pattern of adding new Fidelity funds to the plan demonstrates severe conflicts of interest.
The case seeks a declaration that the defendants breached their fiduciary duty of loyalty under the Employee Retirement Income Security Act (ERISA); a declaration that the defendants violated ERISA § 406 and participated in prohibited transactions; an order compelling the disgorgement of all investment advisory fees paid and incurred, directly or indirectly, to FMR subsidiaries and affiliates by the plan, including disgorgement of profits thereon;an order compelling the defendants to restore all losses to the plan arising from their violations of ERISA;an order granting equitable restitution and other appropriate equitable monetary relief against defendants; and such other equitable or remedial relief as may be appropriate.The complaint in Bilewicz v. FMR LLC is here.