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NEWS - Fidelity Faces Lawsuit over Revenue Sharing

January 10, 2014 – Another participant in Fidelity Investments’ own retirement plan has brought a lawsuit saying participants paid excessive fees.

The latest lawsuit focuses on Fidelity’s treatment of revenue sharing payments, saying “Defendants caused the Plan to forego tens of millions of dollars in revenue-sharing rebates that Fidelity kept for itself.” According to the complaint, in 2012, the Fidelity plan had approximately 71% of its investment assets in actively-managed Fidelity mutual funds. All the funds are managed by an affiliate of the recordkeeper. Instead of negotiating a revenue-sharing recapture arrangement favorable towards participants, plan fiduciaries arranged with Fidelity Operations and Fidelity Management to keep all revenue-sharing for Fidelity, the complaint contends, saying this arrangement cost the Fidelity Plan and its participants approximately $15 million a year for the years 2008-2013.

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