Lawsuit claims Fidelity cheated GM workers

Lawsuit claims Fidelity cheated GM workers
Thu, Apr 25

A Boston law firm has filed a suit seeking class-action status against Fidelity Investments, claiming the giant financial services

firm illegally skimmed tens of millions dollars from the retirement accounts of hourly workers at General Motors Corp.

The suit, filed Thursday in U.S. District Court in Massachusetts, claims Fidelity improperly kept interest generated when account holders’ cash is temporarily placed in interest-bearing accounts when deposited, withdrawn or transferred. Fidelity lost part of an earlier suit over this so-called “float income” in Missouri, which it is appealing.

“As soon as Fidelity receives the money, those contributions are plan assets,” said Thomas Shapiro, of Shapiro Haber & Urmy, the firm filing Thursday’s suit. “Using some of that money to defray its own expenses violates Fidelity’s fiduciary duty.”

Fidelity spokeswoman Jennifer Engle said the firm didn’t earn or retain any income from the float. “We believe that the practices described in the lawsuit are consistent with the law and fair to all parties,” Engle said.

Shapiro said his firm filed similar suits in March involving other Fidelity plans, and filed Thursday’s suit after being contacted by Korine Brown, a GM hourly worker covered by the General Motors Personal Savings Plan.

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