Fidelity Defeats Claims of Illegal 401(k) Kickback Scheme

The parent company of Fidelity Investments defeated a proposed class action challenging the “infrastructure fees” it charges to mutual funds on its 401(k) menu, after a federal judge in Boston declined to hold the company liable under federal benefits law.

FMR LLC and several of its subsidiaries don’t act as fiduciaries under the Employee Retirement Income Security Act when they collect these infrastructure fees, Judge Leo T. Sorokin of the U.S. District Court for the District of Massachusetts held. The fees are negotiated with mutual fund providers, which can then determine whether to pass the fees on to individual 401(k) ...